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<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Convertible promissory notes consisted of the following:</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 54%"><font style="font-size: 10pt">Secured convertible promissory notes</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">5,308,115</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">3,182,972</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Debt discount liability</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(1,708,498</font></td>
<td><font style="font-size: 10pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(216,069</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Debt discount original issue discount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(146,338</font></td>
<td><font style="font-size: 10pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(12,229</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Debt discount deferred financing</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(44,139</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(2,424</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Secured convertible promissory notes– net</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,409,140</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,952,250</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table presents a reconciliation
of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from December
31, 2016 to September 30, 2018:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Conversion feature</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">derivative liability</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 79%"><font style="font-size: 10pt">Balance at December 31, 2016</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">4,956,637</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Initial fair value of derivative liability recorded as debt discount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">336,094</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Initial fair value of derivative liability charged to other expense</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">537,541</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Reclass of derivative liability to additional paid in capital due to conversions</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(390,996</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Gain on change in fair value included in earnings</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(1,485,907</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Balance at December 31, 2017</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">3,953,369</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Initial fair value of derivative liability recorded as debt discount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,455,368</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Initial fair value of derivative liability charged to other expense</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,468,667</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Reclass of derivative liability to additional paid in capital due to conversions</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(1,881,036</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Loss on change in fair value included in earnings</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">9,370,276</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Balance at September 30, 2018</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">16,366,644</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
Q3
1971208
1787749
1923896
1088611
950000
1062934
321563
499438
89832
1062934
403245
152
152
0001441769
230721
1898975
2018
51
51
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 1 – BASIS OF PRESENTATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Organization</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">DirectView Holdings, Inc., (the “Company”),
was incorporated in the State of Delaware on October 2, 2006. On July 6, 2012 the Company changed its domicile from Delaware and
incorporated in the State of Nevada.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has the following six subsidiaries:
DirectView Video Technologies Inc. (“DVVT”), DirectView Security Systems Inc. (“DVSS”), Ralston Communication
Services Inc. (“RCI”), Meeting Technologies Inc (“MT”), Virtual Surveillance (“VS”), and Apex
CCTV, LLC (“APEX”).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is a full-service provider of teleconferencing
services to businesses and organizations. The Company’s conferencing services enable its clients to cost-effectively conduct
remote meetings by linking participants in geographically dispersed locations. The Company’s focus is to provide high value-added
conferencing services to organizations such as professional service firms, investment banks, high tech companies, law firms, investor
relations firms, and other domestic and multinational companies. The Company is also a provider of the latest technologies in surveillance
systems, digital video recording and services. The systems provide onsite and remote video and audio surveillance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Basis of Presentation</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The unaudited consolidated financial statements
include the accounts of the Company, three wholly-owned subsidiaries, and a subsidiary with which the Company has a majority voting
interest of approximately 58% (the other 42% is owned by non-controlling interests, including 12% which is owned by the Company’s
CEO) as of September 30, 2018. In the preparation of the unaudited consolidated financial statements of the Company, intercompany
transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable
to non-controlling interests.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The accompanying unaudited
consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United
States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article
8-03 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and
footnotes required by US GAAP for complete financial statements. The unaudited consolidated financial statements and notes included
herein should be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31,
2017 included in our Annual Report on Form 10-K filed with the SEC on April 17, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In the opinion of
management, all adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position
as of September 30, 2018, the results of operations for the three and nine months ending September 30, 2018, and the cash flows
for the nine months ending September 30, 2018 have been included. The results of operations for the nine months ended September
30, 2018 are not necessarily indicative of the results to be expected for the full year.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Use of Estimates</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In preparing the unaudited consolidated financial
statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities
as of the dates of the statements of financial condition, and revenues and expenses during the reporting period. Actual results
may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the allowance
for doubtful accounts, deferred tax asset valuation allowance, valuation of stock-based compensation, the useful life of property
and equipment, valuation of beneficial conversion features on convertible debt, valuation of intangible assets and the assumptions
used to calculate fair value of derivative liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Non-controlling Interests in Consolidated
Financial Statements</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows ASC 810-10-65, “Non-controlling
Interests in Consolidated Financial Statements.” This statement clarifies that a non-controlling (minority) interest in a
subsidiary is an ownership interest in the entity that should be reported as equity in the unaudited consolidated financial statements.
It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with
disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling
interest. In accordance with ASC 810-10-45-21, the losses attributable to the parent and the non-controlling interest in subsidiary
may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the
non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest
balance. As of September 30, 2018 and December 31, 2017, the Company reflected a non-controlling interest of ($8,544) and $2,941
in connection with our majority-owned subsidiary, DirectView Security Systems Inc. as reflected in the accompanying September 30,
2018 unaudited consolidated balance sheet and December 31, 2017 consolidated balance sheet, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cash and Cash Equivalents</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid investments
purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with a high credit
quality financial institution. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation
(“FDIC”) up to $250,000. As of September 30, 2018 and December 31, 2017 the Company had no bank balances exceeding
the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates at
least annually the rating of the financial institution in which it holds deposits.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows FASB ASC 820, “Fair
Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring
basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles
that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such
fair value measurements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 820 defines fair value as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and
minimize the use of unobservable inputs. These inputs are prioritized below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 58px"><font style="font-size: 10pt">Level 1:</font></td>
<td><font style="font-size: 10pt">Observable inputs such as quoted market prices in active markets for identical assets or liabilities</font></td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 10pt">Level 2:</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">Observable market-based inputs or unobservable inputs that are corroborated by market data</font></td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 10pt">Level 3:</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cash and cash equivalents include money market
securities that are considered to be highly liquid and easily tradable as of September 30, 2018 and December 31, 2017. These securities
are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our
fair value hierarchy. As of September 30, 2018 and December 31, 2017 there were not any cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition, FASB ASC 825-10-25 Fair Value
Option expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many
financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying
financial instruments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reported in the balance
sheet for cash, accounts receivable, accounts payable, accrued expenses, notes payable and due to related parties approximate their
estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes and convertible
promissory notes approximates the estimated fair value for these financial instruments as management believes that such notes constitute
substantially all of the Company’s debt and the interest payable on the notes approximates the Company’s incremental
borrowing rate.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Accounts Receivable </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has a policy of reserving for questionable
accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company uses
specific identification of accounts to reserve possible uncollectible receivables. The Company periodically reviews its accounts
receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may
indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad
debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At September
30, 2018 and December 31, 2017, management determined that an allowance was necessary which amounted to approximately $160,000
for both dates. During the nine months ended September 30, 2018 and 2017 the Company recognized $0 for both dates of write-offs
related to uncollectible accounts receivable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Capitalized Job Costs</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records capitalized jobs costs
on the balance sheet and expenses the costs upon completion of related jobs based on when revenue is earned per ASC 606 “Revenue
Recognition.” As of September 30, 2018 and December 31, 2017, the Company had $53,856 and $141,267, respectively included
on their balance sheets under Capitalized Job Costs.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Advertising</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Advertising is expensed as incurred. Advertising
expense for the nine months ended September 30, 2018 and 2017 was $1,016,261 and $48,673, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Shipping costs</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Shipping costs are included in cost of sales
for VS and Apex and shipping costs are included in other selling, general and administrative expenses for DVVS and were deemed
to be not material for the nine months ended September 30, 2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Inventory</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory, consisting of finished goods related
to our products is stated at the lower of cost or net realizable value utilizing the first-in, first-out method. The Company acquires
inventory for specific installation jobs. As a result, the Company generally orders inventory only as needed for installations.
Due to the anticipation of customers’ needs the Company purchased inventory items and had $87,756 and $73,499 in inventory
as of September 30, 2018 and December 31, 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Property and Equipment</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment is carried at cost.
The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are
retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses
are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets
when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Depreciation is calculated
on a straight-line basis over the estimated useful life of the assets. Leasehold improvements are amortized on a straight-line
basis over the shorter of the estimated useful life or the term of the lease.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Impairment of Long-Lived Assets</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Long-Lived Assets of the Company are reviewed
for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to
guidance established in ASC 360-10-35-15, <i>“Impairment or Disposal of Long-Lived Assets”</i>. The Company recognizes
an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount
of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did
not consider it necessary to record any impairment charges during the nine months ended September 30, 2018 and 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Intangible Assets</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company amortizes the below identifiable
intangible assets over their useful lives on a straight line basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap; width: 50%"><font style="font-size: 10pt">Customer Relationships</font></td>
<td style="white-space: nowrap; width: 50%; text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><font style="font-size: 10pt">Brand</font></td>
<td style="white-space: nowrap; text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><font style="font-size: 10pt">Technology</font></td>
<td style="white-space: nowrap; text-align: center"><font style="font-size: 10pt">3 years</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Income Taxes</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Income taxes are accounted for under the asset
and liability method as prescribed by ASC Topic 740: Income Taxes (“ASC 740”). Deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities, and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance, when in the Company’s
opinion it is likely that some portion or the entire deferred tax asset will not be realized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASC Topic 740-10: Income Taxes
related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step
is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution
of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position
that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements.
A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate
settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in
the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not
criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The
accounting standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods,
disclosures, and transition. The adoption had no effect on the Company’s consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock Based Compensation</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Stock-based compensation is accounted for based
on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements
of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee
or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires
measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value
of the award.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASC Topic 505-50, for share-based
payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The
expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation
expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting
date. The Company recorded stock based compensation of $72,000 and $25,000 for employees during the nine months ended September
30, 2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Loan Costs</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has early adopted ASU 2015-3 “Interest
– Imputation of Interest” - Simplifying the Presentation of Debt Issuance Costs. The loan costs are recorded as a debt
discount and amortized to interest expense over the terms of the note payable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue recognition</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued Accounting Standards
Update (“ASU”) 2014-09 (ASC 606) and related amendments, which superseded all prior revenue recognition methods and
industry-specific guidance. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of
control for 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. In applying the revenue principles, an entity is required to identify the
contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price
to the performance obligations and recognize revenue when the performance obligation is satisfied (i.e., either over time or point
in time). ASC 606 further requires that companies disclose sufficient information to enable users of financial statements to understand
the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 606 provides companies an option of two
transition methods, the full retrospective method, in which case the standard would be applied to each prior reporting period presented
and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective
method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The
ASU is effective for annual reporting periods beginning after December 15, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective January 1, 2018 (beginning of fiscal
year 2018), the Company adopted the requirements of ASC 606 using the modified retrospective method. The guidance was not applied
to contracts that were complete at December 31, 2017, and the comparative information for the prior fiscal year has not been retrospectively
adjusted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The adoption of ASC 606 did not have any impact
on the Company’s consolidated financial statements. The adoption of ASC 606 did not have a significant impact on the Company’s
revenue recognition policy as revenues on the substantial majority of the Company’s contracts continue to be recognized over
time.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In adopting ASC 606, the Company elected to
use certain practical expedients permitted by the standard including electing to adopt the right-to-invoice practical expedient
on certain time and material contracts where the Company recognizes revenues as it is contractually able to invoice the customer
based on the control transferred to the customer.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following policies reflect specific criteria
for the various revenue streams of the Company:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue is recognized upon transfer of control
of conferencing services. The Company generally does not charge up-front fees and bills its customers based on usage. The Company
has elected the practical expedient to recognized revenue “as-billed”.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue for video equipment sales and security
surveillance equipment sales is recognized upon delivery and installation which the Company has determined is the point in time
that control is transferred to the customer. Due to the nature of the Company’s business it is not practicable to return
products therefore the Company has determined that it is not necessary to estimate for sales returns and allowances. The Company’s
manufacturers provide the highest quality products available. If there is a defect in a product related to materials or workmanship
the Company extends the manufacturer’s warranty to its customers. To date this process has never occurred. Therefore no warranty
liability is recorded.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue from periodic maintenance agreements
is generally recognized ratably over the respective maintenance periods provided no significant obligations remain and collectability
of the related receivable is probable. Maintenance agreements are considered stand ready arrangements for which control is transferred
to the customer ratably over time.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Disaggregation of Revenue</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company operates in two different geographic
locations and both locations have two sources of revenue; sales of product and sales of service. Service sales mainly include installation
of products related to security systems. The sales of products are generally contract based and short term in nature.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table illustrates our revenue
by type related to the nine months ended September 30, 2018:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Texas</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">New York</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 43%"><font style="font-size: 10pt">Sale of Products</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">2,640,089</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">81,457</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">2,721,546</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Service</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">500,973</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">96,675</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">597,648</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt; padding-left: 10pt"><font style="font-size: 10pt">Total Revenue from Customers</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,141,062</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">178,132</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,319,194</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Contract Balances</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table provides information about
receivables, contract assets and contract liabilities from contracts with customers.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 50%"><font style="font-size: 10pt">Capitalized Job Costs</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 22%; text-align: right"><font style="font-size: 10pt">53,856</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 22%; text-align: right"><font style="font-size: 10pt">141,267</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Deferred Revenue</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">369,769</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">479,426</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Contract receivables are recognized when the
receipt of consideration is unconditional. The decrease in contract assets was primarily due to timing of billings and revenue
recognized on performance of services rendered.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The increase in contract liabilities was primarily
due to revenue deferred on jobs where services are being rendered.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2018, the Company recognized revenue of $442,436 relating to amounts that were included as a contract liability at December 31,
2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a practical expedient, the Company expenses
the costs of sales commissions that are paid to its sales force associated with obtaining contracts less than one year in length
in the period incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Remaining Performance Obligations</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company typically enters into contracts
that are one year or less in length. As such, the remaining performance obligations at September 30, 2018 are equal to the deferred
revenue disclosed above. The Company expects to recognize the full balance of the deferred revenue at September 30, 2018 within
the next year.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cost of Sales</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cost of sales includes cost of products and
cost of service. Product cost includes the cost of products and delivery costs. Cost of services includes labor and fuel expenses.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Concentrations of Credit Risk and Major
Customers</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Financial instruments which potentially subject
the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its
cash with high credit quality financial institutions. Almost all of the Company’s sales are credit sales which are primarily
to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The Company also performs
ongoing credit evaluations of its customers to help further reduce credit risk.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2018 and 2017, one customer accounted for 27% and 43%, respectively of revenues.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2018, two customers accounted
for 70% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the two customers:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 71%"><font style="font-size: 10pt">Customer 1</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 26%; text-align: right"><font style="font-size: 10pt">45</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Customer 2</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">25</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">70</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">%</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2017, three customers accounted
for 56% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the three customers:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 71%"><font style="font-size: 10pt">Customer 1</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 26%; text-align: right"><font style="font-size: 10pt">30</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Customer 2</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">15</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Customer 3</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">11</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">56</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">%</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Research and Development</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Research is planned search or critical investigation
aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (hereinafter
“product”) or a new process or technique (hereinafter “process”) or in bringing about a significant improvement
to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design
for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use.
It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation
of pilot plants. It does not include routine or periodic alterations to existing products, production lines, manufacturing processes,
and other on-going operations even though those alterations may represent improvements and it does not include market research
or market testing activities. Per FASB ASC 730, the Company expenses research and development cost as incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Related Parties </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Parties are considered to be related to the
Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under
common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate
families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties
might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions
shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the
cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution
to related party.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Net Income per Common Share </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Net income per common share is calculated in
accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic income per share is computed by dividing net income
by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net earnings
per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive.
At September 30, 2018 the Company had 2,327,551,357 share equivalents issuable pursuant to embedded conversion features. At December
31, 2017 the Company had 442,601,456 share equivalents issuable pursuant to embedded conversion features.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recently Adopted Accounting Standards</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2015, the FASB issued ASU 2015-14,
Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09
for all entities by one year. This update is effective for public business entities for annual reporting periods beginning after
December 15, 2017, including interim periods within those reporting periods. Earlier application was permitted only as of annual
reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. ASU 2014-09
was to become effective for us beginning January 2017; however, ASU 2015-14 deferred our effective date until January 2018, which
is when we plan to adopt this standard. The ASU permits two methods of adoption: retrospectively to each prior reporting period
presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized
at the date of initial application (the modified retrospective method). The ASU also requires expanded disclosures relating to
the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative
and quantitative disclosures are required for customer contracts, significant judgments and changes in judgments, and assets recognized
from the costs to obtain or fulfill a contract. We have completed the process of evaluating the effect of the adoption and determined
that our contracts for which customers purchase both surveillance products and installation services from us may result in a change
to our reported revenues as a result of the adoption.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Based on our evaluation process and review
of our contracts with customers, the timing and amount of revenue recognized based on ASU 2015-14 will be recognized when our performance
obligations are satisfied for both product sales and installation services. This differs from previous guidance in which we recognized
the sale of the products and installation services at the same time. We adopted the new standard effective January 1, 2018, using
the modified retrospective approach, and will expand our consolidated financial statement disclosures in order to comply with the
ASU. The adoption of this guidance did not have a material impact on our consolidated financial statements due to the short term
nature of our contracts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2017, the FASB issued Accounting
Standards Update 2017-01, to clarify the definition of a business. Under this updated standard, an entity will be able to more
consistently account for transactions when determining if such transactions represent acquisitions or disposals of assets or of
a business. This guidance is effective for interim and annual periods beginning after December 15, 2017. The adoption of this guidance
did not have a material impact on our consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recently Issued Accounting Standards Not
Yet Adopted</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has reviewed all recently issued,
but not yet adopted, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant
impact on our consolidated financial statements, except as described below.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued Accounting
Standards Update (ASU), Leases (Topic 842), intended to improve financial reporting about leasing transactions. The ASU affects
all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. Under the
new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months.
Consistent with current Generally Accepted Accounting Principles (GAAP), the recognition, measurement, and presentation of expenses
and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However,
unlike current GAAP—which requires only capital leases to be recognized on the statement of assets, liabilities, and members’
equity (deficit)—the new ASU will require both types of leases to be recognized on the statement of assets, liabilities,
and members’ equity (deficit). During July 2018, the FASB issued ASU 2018-10 and ASU 2018-11, to provide clarity and amend
a number of requirements, including comparative reporting requirements for initial adoption, as originally issued by Topic 842
and follows the same effective date as Topic 842. The ASU on leases will take effect for all public companies for fiscal years
beginning after December 15, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2017, the FASB issued Accounting
Standards Update 2017-04, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment
test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount
exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated
to that reporting unit. An entity also should consider income tax effects from any tax-deductible goodwill on the carrying amount
of the reporting unit when measuring the goodwill impairment loss, if any. This guidance is effective prospectively and is effective
for interim and annual periods beginning after December 15, 2019 with early adoption permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2018, the FASB issued Accounting Standards
Update 2018-07, to reduce cost and complexity and to improve financial reporting for share-based payment transactions for acquiring
goods or services from nonemployees. Under this update standard, an entity should apply the requirements to nonemployee awards
except for specific guidance on inputs to an option pricing model and the attribution of cost. Furthermore, this update standard
applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s
own operations by issuing share-based payment awards. This guidance is effective for interim and annual periods beginning after
December 15, 2018 with early adoption permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2018, the FASB issued Accounting
Standards Update 2018-13, to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement,
based on the concepts in the Concept Statement, including the consideration of costs and benefits. This guidance is effective
for interim and annual periods beginning after December 15, 2019 with early adoption permitted.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 2 – GOING CONCERN CONSIDERATIONS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited consolidated financial
statements are prepared assuming the Company will continue as a going concern. At September 30, 2018, the Company had an accumulated
deficit of approximately $44.7 million, a stockholders’ deficit of approximately $24.7 million and a working capital deficiency
of approximately $25.4 million. The net cash used in operating activities for the nine months ended September 30, 2018 totaled
$936,228. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period
of twelve months from the issue date of this report. The ability of the Company to continue as a going concern is dependent upon
increasing sales and obtaining additional capital and financing. Management intends to attempt to raise funds by way of a public
or private offering. While the Company believes in the viability of its strategy to increase sales volume and in its ability to
raise additional funds, there can be no assurances to that effect. The Company’s limited financial resources have prevented
the Company from aggressively advertising its products and services to achieve consumer recognition. The unaudited consolidated
financial statements do not include adjustments to reflect the possible effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the outcome of this uncertainty.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 3 - PROPERTY AND EQUIPMENT </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Estimated life</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 43%"><font style="font-size: 10pt">Computer Equipment</font></td>
<td style="width: 1%"> </td>
<td style="width: 14%; text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">23,438</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">13,333</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Office Equipment</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">5,866</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">5,767</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Telephone System</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">11,576</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">11,042</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">ERP Software</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">150,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">150,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Vehicles</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">22,667</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">22,667</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Furniture & Fixtures</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">2-3 years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Less: Accumulated depreciation</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(200,854</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(140,559</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt; text-align: center"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">14,693</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">64,250</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the nine months ended September 30, 2018
and 2017, depreciation expense amounted to $60,295 and $92,811, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 7 – NOTES PAYABLE </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2012, the
Company entered into demand notes with Regal Capital (formerly a related party) totaling $116,792 bearing interest at 12% per annum.
At September 30, 2018 and December 31, 2017 the notes amounted to $116,792 and $116,792 respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 6, 2017, the Company issued a 10%
original issue discount (OID) promissory note with a principal balance of $66,667 due August 6, 2017 with an interest rate of 10%.
In connection with the original issue discount promissory note the Company recorded OID of $6,667 and deferred financing of $1,000
which are to be amortized over the term of the note. On October 3, 2017, the Company executed an agreement with a Note Holder to
extend the maturity date of a promissory note an additional five months beyond the original maturity date of August 6, 2017. The
cost of funding is 20% over a six month term prorated to a five month term. In addition, the Company agreed to issue the note holder
375,000 restricted shares of common stock upon payment of the note. It was also agreed that if the Company and the note holder
agreed the note may be repaid in the form of shares of common stock of the Company at 30% discount to market. As of December 31,
2017 the balance of the original issue discount promissory note amounted to $66,667. On March 16, 2018, the note holder assigned
the principal balance of the note along with the accrued interest to a third party and the Company issued a replacement convertible
promissory note (see Note 10).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of April 20, 2017, in connection with the
Purchase Agreement of the Acquisition Companies (see Note 1) the Company assumed a note payable with a balance of $1,923,896 that
VS and Apex were jointly and severally liable for with a maturity date of April 2025 and an interest rate of 4.35%. The note payable
was guaranteed by the Acquisition Companies’ previous managing member and his spouse and collateralized by all of the assets
of the Acquisition Companies. Per the Purchase Agreement the note was to be paid within 180 days of the Effective Date, the Company
has not complied with the payment terms. Additionally, the note has certain debt covenants that the Company is out of compliance
with. On July 27, 2018, the Company entered into a settlement with JP Morgan Chase Bank, N.A. (“Chase”) regarding payment
of the outstanding balance under this note payable, known as the Promissory Note and U.S. Small Business Administration Note dated
April 15, 2015 (the “Notes”) in the aggregate principal amount of approximately $1,900,000 including interest (the
“Loan Amount”) between Video Surveillance LLC, Apex CCTV, and Chase. According to the terms of the settlement, the
Company and Chase agreed to a full and final settlement of the Loan Amount and the related transactions thereunder in exchange
for payment by the Company in the amount of $475,000 on August 3, 2018 (the “Initial Payment”) and three additional
payments of $475,000 each month thereafter (the “Additional Payment”). As of the date hereof, the Company has timely
made the Initial and two Additional Payments to Chase and intends to deliver the final Additional Payment in full satisfaction
of the Loan Amount by November 30, 2018. In the event the Company fails to timely deliver an Additional Payment, Chase may call
an event of default under the terms of the Notes and accelerate the Loan Amount, amongst other remedies available to Chase. At
September 30, 2018 and December 31, 2017 the total balance owed on the note payable was $950,000 and $1,787,749, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At September 30, 2018 and December 31, 2017,
notes payable amounted to $1,088,611 and $1,971,208, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accrued interest on the notes payable amounted
to approximately $59,000 and $92,000 as of September 30, 2018 and December 31, 2017, respectively and is included in accrued expenses.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 8 – SHORT TERM ADVANCES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the years ended December 31, 2013,
2012 and 2011 an unrelated party advanced funds to the Company used for operating expenses. The advances are payable in cash and
are non interest bearing and due on demand. The balance of these short term advances was $146,015 and $146,015 as of September
30, 2018 and December 31, 2017, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 9 – ACCRUED EXPENSES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2018 and December 31, 2017,
the Company had accrued expenses of $4,093,449 and $3,607,100, respectively. The following table displays the accrued expenses
by category.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 54%"><font style="font-size: 10pt">Operating Expenses</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">159,279</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">17,260</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Employee Commissions</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">18,633</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Interest</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,891,681</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,611,924</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Salaries</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,973,579</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,770,027</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Sales Tax Payable</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">53,610</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">54,532</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Payroll Liabilities</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">15,300</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">134,724</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">4,093,449</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,607,100</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 10 – CONVERTIBLE PROMISSORY NOTES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Convertible promissory notes consisted of the following:</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 54%"><font style="font-size: 10pt">Secured convertible promissory notes</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">5,308,115</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">3,182,972</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Debt discount liability</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(1,708,498</font></td>
<td><font style="font-size: 10pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(216,069</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Debt discount original issue discount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(146,338</font></td>
<td><font style="font-size: 10pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(12,229</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Debt discount deferred financing</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(44,139</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(2,424</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Secured convertible promissory notes– net</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,409,140</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">2,952,250</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 5, 2018, the Company issued a 5%
original issue discount (OID) convertible promissory note with a principal balance of $8,947 with a one year maturity date. This
convertible debenture converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet
provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability.
In connection herewith, the Company recorded a derivative liability of $13,098, OID of $447, debt discount of $8,053 and derivative
expense of $5,045. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory
note was $8,947 at September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September
30, 2018 was $6,822.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 19, 2018, the Company issued a 5%
OID convertible promissory note with a principal balance of $7,895 with a one year maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $11,557, OID of $395, debt discount of $7,105 and derivative expense of $4,452. The OID and
debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $7,895 at September
30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018 was $5,707.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 24, 2018, the Company issued a 5%
OID convertible promissory note with a principal balance of $52,632 with a one year maturity date. This convertible debenture converts
at 55% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $84,591, OID of $2,632, debt discount of $47,368 and derivative expense of $37,223. The OID
and debt discount are being amortized over the term of the note. During June 2018, this promissory note was paid in full.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 30, 2018, the Company issued a convertible
promissory note with a principal balance of $58,000 with a one year maturity date. This note holder has the right to convert the
principal balance of the debenture beginning on the date which is one hundred eighty (180) days following the date of this note
and ending on the later of the maturity date and the date of the default amount. The convertible promissory note has terms to convert
at a 37% discount of the lowest trading price during the 10 days prior to conversion. The Company recorded $3,000 in deferred financing
associated with this note. The deferred financing is being amortized on a straight line basis over the term of the note. During
August 2018, this promissory note was paid in full.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 9, 2018, the Company issued a 5%
OID convertible promissory note with a principal balance of $15,789 with a one year maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $23,434, OID of $789, debt discount of $8,434 and derivative expense of $15,000. The OID and
debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $15,789 at September
30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018 was $12,331.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 15, 2018, the Company issued a
5% OID convertible promissory note with a principal balance of $12,632 with a one year maturity date. This convertible debenture
converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained
in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith,
the Company recorded a derivative liability of $18,747, OID of $632, debt discount of $6,747 and derivative expense of $12,000.
The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $12,632
at September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018 was $9,865.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 26, 2018, the Company issued a
5% OID convertible promissory note with a principal balance of $26,316 with a one year maturity date. This convertible debenture
converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained
in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith,
the Company recorded a derivative liability of $39,056, OID of $1,316, debt discount of $14,056 and derivative expense of $25,000.
The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $26,316
at September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018 was $19,911.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 6, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $31,579 with a one year maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $50,755, OID of $1,579, debt discount of $28,421 and derivative expense of $22,334. The OID
and debt discount are being amortized over the term of the note. During June 2018, this promissory note was paid in full.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 9, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $31,579 with a one year maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $46,868, OID of $1,579, debt discount of $16,868 and derivative expense of $30,000. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $31,579 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018 was $23,124.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 16, 2018, the Company issued a replacement
convertible promissory note with a principal balance of $124,689 with a one year maturity date that was recorded under note payable
on the company’s balance sheet as of December 31, 2017 in the amount of $66,667 and accrued interest of $8,811. This convertible
debenture converts at 55% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions
contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection
herewith, the Company recorded a derivative liability of $200,404 and derivative expense of $202,404. During the six months ended
June 30, 2018, the note holder converted $84,150 of the principal balance of the convertible promissory note into 29,493,911 common
shares at contractual rates of $.00176, $.002475, and $.0055 per share. During June 2018, this promissory note was paid in full.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 21, 2018, the Company issued a 5%
OID convertible promissory note with a principal balance of $52,632 with a nine month maturity date. This convertible debenture
converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained
in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith,
the Company recorded a derivative liability of $74,001, OID of $2,632, debt discount of $24,000 and derivative expense of $50,001.
The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $52,632
at September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018 was $43,701.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 23, 2018, the Company issued a 5%
OID convertible promissory note with a principal balance of $26,316 with a one year maturity date. This convertible debenture converts
at 55% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $42,848, OID of $1,316, debt discount of $17,848 and derivative expense of $25,000. The OID
and debt discount are being amortized over the term of the note. During June 2018, this promissory note was paid in full.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 31, 2018, the Company issued a replacement
convertible promissory note assigning two outstanding convertible promissory notes to a third party note holder with a principal
balance of $74,754 and a one year maturity date. This convertible debenture converts at 55% of the lowest trading price during
the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted
for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $121,717,
OID of $439, debt discount of $54,858 and derivative expense of $74,754. The OID and debt discount are being amortized over the
term of the note. During June 2018, this promissory note was paid in full.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 5, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $105,263 with a one year maturity date. This convertible debenture converts
at 55% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $145,905, OID of $5,263, debt discount of $94,737 and derivative expense of $51,168. The OID
and debt discount are being amortized over the term of the note. During June 2018, this promissory note was paid in full.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 5, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $55,368 with a nine month maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $64,472, OID of $2,368, debt discount of $50,632 and derivative expense of $13,841. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $55,368 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $36,702.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 18, 2018, the Company issued a 5%
OID convertible promissory note with a principal balance of $113,250 with a nine month maturity date. This convertible debenture
converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained
in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith,
the Company recorded a derivative liability of $131,876, OID of $5,250, debt discount of $108,000 and derivative expense of $23,876.
The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $113,250
at September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $68,042.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 27, 2018, the Company issued a 5%
OID convertible promissory note with a principal balance of $18,947 with a one year maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $23,695, OID of $947, debt discount of $17,053 and derivative expense of $6,642. The OID and
debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $18,947 at September
30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018 was $8,447.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 2, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $129,000 with a nine month maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $150,229, OID of $6,000, debt discount of $123,000 and derivative expense of $27,229. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $129,000 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $70,333.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 16, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $113,250 with a nine month maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $131,904, OID of $5,250, debt discount of $108,000 and derivative expense of $23,904. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $113,250 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $55,125.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 30, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $118,500 with a nine month maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $138,006, OID of $5,500, debt discount of $113,000 and derivative expense of $25,006. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $118,500 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $51,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 13, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $122,273 with a nine month maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $142,418, OID of $5,750, debt discount of $116,523 and derivative expense of $25,894. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $122,273 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $46,620.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 15, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $279,102 with a nine month maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $325,078, OID of $13,125, debt discount of $265,477 and derivative expense of $59,601. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $279,102 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $106,720.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 27, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $118,500 with a nine month maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $138,022, OID of $5,500, debt discount of $113,000 and derivative expense of $25,022. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $118,500 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $37,500.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 12, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $81,750 with a nine month maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $95,159, OID of $3,750, debt discount of $78,000 and derivative expense of $17,159. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $81,750 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $20,542.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 26, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $57,500 with a nine month maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $66,932, OID of $4,500, debt discount of $53,000 and derivative expense of $13,932. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $57,500 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $10,444.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 27, 2018, the Company issued a 5% OID
convertible promissory note with a principal balance of $52,632 with a one year maturity date. This convertible debenture converts
at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible
promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company
recorded a derivative liability of $65,775, OID of $2,362, debt discount of $47,368 and derivative expense of $18,406. The OID
and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $52,632 at
September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $10,965.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 3, 2018, the Company issued a 10%
OID convertible promissory note with a principal balance of $527,778 with a two year maturity date. This convertible debenture
converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained
in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith,
the Company recorded a derivative liability of $1,311,420, OID of $52,778, debt discount of $422,222 and derivative expense of
$889,198. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note
was $505,556 at September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30,
2018, was $70,139.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 5, 2018, the Company issued a
10% OID convertible promissory note with a principal balance of $527,778 with a two year maturity date. This convertible debenture
converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained
in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith,
the Company recorded a derivative liability of $1,015,365, OID of $52,778, debt discount of $412,222 and derivative expense of
$603,143. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note
was $527,778 at September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30,
2018, was $72,569.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 6, 2018, the Company issued a
convertible promissory note for future services with a principal balance of $100,000 with a one year maturity date. This convertible
debenture converts at 85% of the lowest trading price during the 10 days prior to conversion. Due to certain ratchet provisions
contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection
herewith, the Company recorded a debt discount of $100,000. The balance of the convertible promissory note was $0 at September
30, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 10, 2018, the Company issued a
5% OID convertible promissory note with a principal balance of $136,842 with a one year maturity date. This convertible debenture
converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained
in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith,
the Company recorded a derivative liability of $322,204, OID of $6,842, debt discount of $103,158 and derivative expense of $219,046.
The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note was $136,842
at September 30, 2018. The balance of the convertible promissory note net of OID and debt discount at September 30, 2018, was $17,675.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2018 and the year ended December 31, 2017 amortization of debt discount amounted to $1,062,934 and $403,245, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 11 – DERIVATIVE LIABILITY </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates its convertible instruments,
options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives
to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment
is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event
that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operation as other income
(expense). Upon conversion or exercise of a derivative instruments, the instrument is marked to fair value at the conversion date
then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject
to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification
date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table presents a reconciliation
of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from December
31, 2016 to September 30, 2018:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Conversion feature</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">derivative liability</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 79%"><font style="font-size: 10pt">Balance at December 31, 2016</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">4,956,637</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Initial fair value of derivative liability recorded as debt discount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">336,094</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Initial fair value of derivative liability charged to other expense</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">537,541</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Reclass of derivative liability to additional paid in capital due to conversions</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(390,996</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Gain on change in fair value included in earnings</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(1,485,907</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Balance at December 31, 2017</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">3,953,369</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Initial fair value of derivative liability recorded as debt discount</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,455,368</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Initial fair value of derivative liability charged to other expense</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,468,667</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Reclass of derivative liability to additional paid in capital due to conversions</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">(1,881,036</font></td>
<td><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Loss on change in fair value included in earnings</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">9,370,276</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Balance at September 30, 2018</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">16,366,644</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Total derivative liability at September 30,
2018 and December 31, 2017 amounted to $16,366,644 and $3,953,369, respectively. The change in fair value included in earnings
of $9,370,276 is due to substantially decreased conversion prices due to the effect of “Ratchet” provisions incorporated
in convertible notes payable (see Note 10) coupled with an increase in the risk-free interest rate.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company used the following assumptions
for determining the fair value of the convertible instruments granted under the Black-Scholes option pricing model:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">From January 1, 2018 </font><br />
<font style="font-size: 10pt">to September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 67%"><font style="font-size: 10pt">Expected volatility</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 30%; text-align: right"><font style="font-size: 10pt">194% - 293</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Expected term</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">3 – 24 months</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1.28%-2.25</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Expected dividend yield</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 12 - STOCKHOLDERS’ DEFICIT </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Series A Preferred Stock has no dividend
rights, no liquidation rights and no redemption rights, and was created primarily to be able to obtain a quorum and conduct business
at shareholder meetings. All shares of the Series A Preferred Stock shall rank (i) senior to the Company’s common stock and
any other class or series of capital stock of the Company hereafter created, (ii) <i>pari passu</i> with any class or series of
capital stock of the Company hereafter created and specifically ranking, by its terms, on par with the Series A Preferred Stock
and (iii) junior to any class or series of capital stock of the Company hereafter created specifically ranking, by its terms, senior
to the Series A Preferred Stock, in each case as to distribution of assets upon liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 12, 2018, the Company issued 5,000,000
shares of common stock at the fair market value rate of $0.009 totaling $45,000 to the Company’s CEO for services rendered.
The Company also issued 3,000,000 shares of common stock at the fair market value rate of $0.009 totaling $27,000 to an employee
for services rendered.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2018, the Company issued 268,717,965 shares of common stock at contractual rates ranging from $.00176 to $.005915 for the conversion
of $693,102 in principal and $112,896 in accrued interest of convertible notes payable (See Note 10).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective July 31, 2018, the Company’s
Registration Statement on Form S-1 (“S-1”) was approved by the U.S. Securities and Exchange Commission, providing
the Company the ability to sell up to 60,000,000 shares of its common stock to GHS Investments LLC. During the nine months ended
September 30, 2018, the Company issued 26,700,000 shares of common stock at rates ranging from $.00296 to $.00376 for the sale
of shares under the provisions of the S-1, generating $85,192 in proceeds to the Company.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 13 - RELATED PARTY TRANSACTIONS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Due to Related Parties</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Chief Executive Officer of the Company
advanced funds for operating expenses in 2016. As of September 30, 2018 and December 31, 2017 the Company has a balance of $1,814
in Due to Related Parties included on the balance sheet. These advances are short-term in nature and non-interest bearing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Note Payable – related party</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following related party transactions have
been presented on the balance sheet in Note Payable – related party. In connection with the Purchase Agreement of the Acquisition
Companies (see Note 1) the Company executed a non-interest bearing note payable in the amount of $830,000 due to the former CEO
of the Acquisition Companies. During the nine months ended September 30, 2018, the Company paid $38,000 related to this note payable.
At September 30, 2018 and December 31, 2017 the balance of the note payable – related party amounted to $792,000 and $830,000,
respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 14 – BARTER REVENUE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company provides security systems and
associated installation labor in exchange for business services. The Company recognizes revenue from these barter transactions
when security systems are installed and recognizes deferred barter costs as other current assets until the barter transaction
is completed and then recognizes the appropriate expense. The barter revenue is valued at the fair market value which is the selling
price we sell to other third parties. The barter revenue for the nine months ended September 30, 2018 and 2017 totaled $0 and
$27,721, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 15 - ACCRUED PAYROLL TAXES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At September 30, 2018 the Company recorded
a liability related to current and certain unpaid payroll taxes of approximately $15,300, of which approximately $300 relates
to current payroll taxes and $15,000 relates to certain unpaid payroll taxes and includes interest and penalties. Although the
Company has not received any notices from the IRS related to the unpaid payroll taxes, the Company confirmed the outstanding balances
with the IRS. At December 31, 2017 the Company had $135,000 recorded as a liability related to this matter. Such amounts are included
in accrued expenses in the accompanying unaudited consolidated financial statements.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><b>NOTE 16 - SEGMENT
REPORTING</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Although the Company
has a number of operating divisions, separate segment data has not been presented as they meet the criteria for aggregation as
permitted by ASC Topic 280, “Segment Reporting” (formerly Statement of Financial Accounting Standards (SFAS) No. 131,
“Disclosures About Segments of an Enterprise and Related Information”).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">Our chief operating
decision-maker is considered to be our Chief Executive Officer (CEO). The CEO reviews financial information presented on a consolidated
basis for purposes of making operating decisions and assessing financial performance. The financial information reviewed by the
CEO is identical to the information presented in the accompanying unaudited consolidated statements of operations. Therefore,
the Company has determined that it operates in a single operating segment, specifically, security systems and related services.
For the nine months ended September 30, 2018 and 2017 all material assets and revenues of the Company were in the United States.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 18 – SUBSEQUENT EVENTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Subsequent to September 30, 2018, the Company
issued 5% OID convertible promissory notes with principal balances totaling approximately $1,095,000 with maturity dates of one
year. These convertible debentures convert at 40% of the lowest trading price during the 30 days prior to conversions. Due to certain
ratchet provisions contained in the convertible promissory notes the Company will account for these conversion features as derivative
liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Subsequent to September 30, 2018, the Company
issued 72,466,081 shares of common stock upon conversion of $106,900 of convertible promissory notes and $78,627 of accrued interest.
These notes were converted at contractual rates ranging from $.00209 to $.00288.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Subsequent to September 30, 2018, the Company
issued 23,500,000 shares of common stock at rates ranging from $.00592 to $.0088 for the sale of shares under the effective S-1.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Subsequent to September 30, 2018, the Company
successfully restructured all outstanding debt with an existing lending partner (“Agreement’). The Agreement satisfies
approximately $1,456,000 of convertible notes payable and accrued interest for $1,200,000 of cash over three equal installments
of $400,000. As part of the Agreement, the lending partner also agreed to an immediate lock up on all of its convertible notes
and no further conversions. As of the filing date of this quarterly report, the first installment of $400,000 has been paid in
accordance with the terms of the Agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Subsequent to September 30, 2018, the Company
made the third Additional Payment in the amount of $475,000 to Chase in accordance with the full and final settlement as more
fully described in Note 7.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Organization</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">DirectView Holdings, Inc., (the “Company”),
was incorporated in the State of Delaware on October 2, 2006. On July 6, 2012 the Company changed its domicile from Delaware and
incorporated in the State of Nevada.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has the following six subsidiaries:
DirectView Video Technologies Inc. (“DVVT”), DirectView Security Systems Inc. (“DVSS”), Ralston Communication
Services Inc. (“RCI”), Meeting Technologies Inc (“MT”), Virtual Surveillance (“VS”), and Apex
CCTV, LLC (“APEX”).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is a full-service provider of
teleconferencing services to businesses and organizations. The Company’s conferencing services enable its clients to cost-effectively
conduct remote meetings by linking participants in geographically dispersed locations. The Company’s focus is to provide
high value-added conferencing services to organizations such as professional service firms, investment banks, high tech companies,
law firms, investor relations firms, and other domestic and multinational companies. The Company is also a provider of the latest
technologies in surveillance systems, digital video recording and services. The systems provide onsite and remote video and audio
surveillance.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2018, two customers accounted
for 70% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the two customers:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 71%"><font style="font-size: 10pt">Customer 1</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 26%; text-align: right"><font style="font-size: 10pt">45</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Customer 2</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">25</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">70</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">%</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2017, three customers accounted
for 56% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the three customers:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 71%"><font style="font-size: 10pt">Customer 1</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 26%; text-align: right"><font style="font-size: 10pt">30</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Customer 2</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">15</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Customer 3</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">11</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">56</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">%</font></td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Estimated life</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 43%"><font style="font-size: 10pt">Computer Equipment</font></td>
<td style="width: 1%"> </td>
<td style="width: 14%; text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">23,438</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 18%; text-align: right"><font style="font-size: 10pt">13,333</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Office Equipment</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">5,866</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">5,767</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Telephone System</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">11,576</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">11,042</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">ERP Software</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">150,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">150,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Vehicles</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">1 year</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">22,667</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">22,667</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Furniture & Fixtures</font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">2-3 years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Less: Accumulated depreciation</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(200,854</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(140,559</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt; text-align: center"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">14,693</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">64,250</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table displays the accrued expenses
by category.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 54%"><font style="font-size: 10pt">Operating Expenses</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">159,279</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 20%; text-align: right"><font style="font-size: 10pt">17,260</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Employee Commissions</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">18,633</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Interest</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,891,681</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,611,924</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Salaries</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,973,579</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,770,027</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Sales Tax Payable</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">53,610</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">54,532</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Payroll Liabilities</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">15,300</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">134,724</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">4,093,449</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,607,100</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company used the following assumptions
for determining the fair value of the convertible instruments granted under the Black-Scholes option pricing model:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">From January 1, 2018 </font><br />
<font style="font-size: 10pt">to September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 67%"><font style="font-size: 10pt">Expected volatility</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 30%; text-align: right"><font style="font-size: 10pt">194% - 293</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Expected term</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">3 – 24 months</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1.28%-2.25</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Expected dividend yield</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
682682
1477512
527757
1322587
52000
52000
830000
792000
830000
830000
60295
92811
931
50625
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 4 – INTANGIBLE ASSETS </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the Purchase Agreement of
the Acquisition Companies (see Note 1) goodwill and other intangible assets were acquired. An independent valuation of the intangible
assets was completed as of December 31, 2017. The intangible assets other than goodwill are being amortized on a straight line
basis over their useful lives.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets consist of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>September 30, 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>December 31, 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Useful Lives</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 36%"><font style="font-size: 10pt">Intangible assets:</font></td>
<td style="width: 1%"> </td>
<td style="width: 5%"> </td>
<td style="width: 17%; text-align: right"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 21%; text-align: right"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 15%; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Goodwill</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">794,830</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">794,830</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Customer Relationships</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">95,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">95,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Brand</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">204,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">204,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Technology</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">530,000</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">530,000</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"><font style="font-size: 10pt">3 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Total</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,623,830</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,623,830</font></td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Less: Accumulated amortization</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(301,243</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(146,318</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">1,322,587</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">1,477,512</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Amortization expense related to the intangible
assets for the nine months ended September 30, 2018 and 2017 was $154,925 and $146,980, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 5 – LINE OF CREDIT </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the Purchase Agreement
of the Acquisition Companies (see Note 1) the Co<font style="background-color: white">mpany assumed a $350,000 revolving line
of credit (“Line of Credit”) that VS and Apex are jointly and severally liable for </font>that expired on April 7,
2018. The Line of Credit was guaranteed by VS, Apex and the Acquisition Companies’ previous managing member and collateralized
by all of the assets of VS and Apex. The line of credit had an interest rate of prime plus 1 and was 6.49% at the time the outstanding
balance of $260,658 was repaid in full during September 2018.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 6 – NOTE PAYABLE - RELATED PARTY
</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the Purchase Agreement
of the Acquisition Companies (see Note 1) the Company executed a non-interest bearing Note Payable – related party in the
amount of $830,000. The Note Payable principal amount will be reduced by the calculated cash payout of $2,000 related to the terms
in the Purchase Agreement and payments owed in accordance with the Employment Agreement with the Seller in the amount of $150,000.
The terms of the Employment Agreement include $50,000 annually to be paid over a three year period commencing on Effective Date
of the Purchase Agreement. Upon delivery by the Purchaser to the Seller of the final note payment, related to the Employment Agreement,
the Note held by the Seller shall be forfeited and cancelled and no further force or effect, and the Purchaser shall have no further
obligations on the Note. As of September 30, 2018 and December 31, 2017, $38,000 and $0, respectively has been paid related to
the Employment Agreement. No payments have been remitted pursuant to the Cash Payout as of September 30, 2018.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 17 – COMMITMENTS </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Leases:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the Purchase Agreement of
the Acquisition Companies (see Note 1) the Company assumed a lease for office space with a four year term beginning on April 1,
2015 and ending on March 31, 2019. The Company has the option to renew the lease for an additional six years after the expiration
date. The monthly rent expense is $11,371.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="18" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Payments Due by Period</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Total</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Less than 1 year</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>1-3 Years</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>4-5 Years</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>5 Years +</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Contractual Obligations:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 35%; padding-bottom: 1.5pt"><font style="font-size: 10pt">Operating Leases</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">68,226</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"> </td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">68,226</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"> </td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"> </td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"> </td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total Contractual Obligations:</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">68,226</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">68,226</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Rent expense for the nine months ended September
30, 2018 and 2017 was $102,339 and $57,501, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets consist of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>September 30, 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>December 31, 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Useful Lives</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 36%"><font style="font-size: 10pt">Intangible assets:</font></td>
<td style="width: 1%"> </td>
<td style="width: 5%"> </td>
<td style="width: 17%; text-align: right"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 21%; text-align: right"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 15%; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Goodwill</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">794,830</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">794,830</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Customer Relationships</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">95,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">95,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Brand</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">204,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">204,000</font></td>
<td> </td>
<td> </td>
<td style="text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Technology</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">530,000</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">530,000</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: center"><font style="font-size: 10pt">3 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Total</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,623,830</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,623,830</font></td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Less: Accumulated amortization</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(301,243</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(146,318</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">1,322,587</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">1,477,512</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Basis of Presentation</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The unaudited consolidated financial statements
include the accounts of the Company, three wholly-owned subsidiaries, and a subsidiary with which the Company has a majority voting
interest of approximately 58% (the other 42% is owned by non-controlling interests, including 12% which is owned by the Company’s
CEO) as of September 30, 2018. In the preparation of the unaudited consolidated financial statements of the Company, intercompany
transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable
to non-controlling interests.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">The accompanying unaudited
consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United
States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article
8-03 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and
footnotes required by US GAAP for complete financial statements. The unaudited consolidated financial statements and notes included
herein should be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31,
2017 included in our Annual Report on Form 10-K filed with the SEC on April 17, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">In the opinion of
management, all adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position
as of September 30, 2018, the results of operations for the three and nine months ending September 30, 2018, and the cash flows
for the nine months ending September 30, 2018 have been included. The results of operations for the nine months ended September
30, 2018 are not necessarily indicative of the results to be expected for the full year.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Use of Estimates</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In preparing the unaudited consolidated financial
statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities
as of the dates of the statements of financial condition, and revenues and expenses during the reporting period. Actual results
may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the allowance
for doubtful accounts, deferred tax asset valuation allowance, valuation of stock-based compensation, the useful life of property
and equipment, valuation of beneficial conversion features on convertible debt, valuation of intangible assets and the assumptions
used to calculate fair value of derivative liabilities.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Non-controlling Interests in Consolidated
Financial Statements</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows ASC 810-10-65, “Non-controlling
Interests in Consolidated Financial Statements.” This statement clarifies that a non-controlling (minority) interest in
a subsidiary is an ownership interest in the entity that should be reported as equity in the unaudited consolidated financial
statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling
interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the
non-controlling interest. In accordance with ASC 810-10-45-21, the losses attributable to the parent and the non-controlling interest
in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the
parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling
interest balance. As of September 30, 2018 and December 31, 2017, the Company reflected a non-controlling interest of ($8,544)
and $2,941 in connection with our majority-owned subsidiary, DirectView Security Systems Inc. as reflected in the accompanying
September 30, 2018 unaudited consolidated balance sheet and December 31, 2017 consolidated balance sheet, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cash and Cash Equivalents</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid investments
purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with a high credit
quality financial institution. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation
(“FDIC”) up to $250,000. As of September 30, 2018 and December 31, 2017 the Company had no bank balances exceeding
the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates
at least annually the rating of the financial institution in which it holds deposits.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows FASB ASC 820, “Fair
Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring
basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles
that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such
fair value measurements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 820 defines fair value as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and
minimize the use of unobservable inputs. These inputs are prioritized below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 58px"><font style="font-size: 10pt">Level 1:</font></td>
<td><font style="font-size: 10pt">Observable inputs such as quoted market prices in active markets for identical assets or liabilities</font></td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 10pt">Level 2:</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">Observable market-based inputs or unobservable inputs that are corroborated by market data</font></td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 10pt">Level 3:</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cash and cash equivalents include money market
securities that are considered to be highly liquid and easily tradable as of September 30, 2018 and December 31, 2017. These securities
are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our
fair value hierarchy. As of September 30, 2018 and December 31, 2017 there were not any cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition, FASB ASC 825-10-25 Fair Value
Option expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many
financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying
financial instruments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reported in the balance
sheet for cash, accounts receivable, accounts payable, accrued expenses, notes payable and due to related parties approximate
their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes and
convertible promissory notes approximates the estimated fair value for these financial instruments as management believes that
such notes constitute substantially all of the Company’s debt and the interest payable on the notes approximates the Company’s
incremental borrowing rate.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Accounts Receivable </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has a policy of reserving for
questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable.
The Company uses specific identification of accounts to reserve possible uncollectible receivables. The Company periodically reviews
its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors
that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged
to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote.
At September 30, 2018 and December 31, 2017, management determined that an allowance was necessary which amounted to approximately
$160,000 for both dates. During the nine months ended September 30, 2018 and 2017 the Company recognized $0 for both dates of
write-offs related to uncollectible accounts receivable.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Advertising</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Advertising is expensed as incurred. Advertising
expense for the nine months ended September 30, 2018 and 2017 was $1,016,261 and $48,673, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Shipping costs</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Shipping costs are included in cost of sales
for VS and Apex and shipping costs are included in other selling, general and administrative expenses for DVVS and were deemed
to be not material for the nine months ended September 30, 2018 and 2017, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Inventory</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory, consisting of finished goods related
to our products is stated at the lower of cost or net realizable value utilizing the first-in, first-out method. The Company acquires
inventory for specific installation jobs. As a result, the Company generally orders inventory only as needed for installations.
Due to the anticipation of customers’ needs the Company purchased inventory items and had $87,756 and $73,499 in inventory
as of September 30, 2018 and December 31, 2017, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Property and Equipment</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment is carried at cost.
The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets
are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses
are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets
when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Depreciation is calculated
on a straight-line basis over the estimated useful life of the assets. Leasehold improvements are amortized on a straight-line
basis over the shorter of the estimated useful life or the term of the lease.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Impairment of Long-Lived Assets</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Long-Lived Assets of the Company are reviewed
for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to
guidance established in ASC 360-10-35-15, <i>“Impairment or Disposal of Long-Lived Assets”</i>. The Company recognizes
an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The
amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company
did not consider it necessary to record any impairment charges during the nine months ended September 30, 2018 and 2017.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Intangible Assets</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company amortizes the below identifiable
intangible assets over their useful lives on a straight line basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap; width: 50%"><font style="font-size: 10pt">Customer Relationships</font></td>
<td style="white-space: nowrap; width: 50%; text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><font style="font-size: 10pt">Brand</font></td>
<td style="white-space: nowrap; text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><font style="font-size: 10pt">Technology</font></td>
<td style="white-space: nowrap; text-align: center"><font style="font-size: 10pt">3 years</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Income Taxes</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Income taxes are accounted for under the asset
and liability method as prescribed by ASC Topic 740: Income Taxes (“ASC 740”). Deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities, and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance, when in the Company’s
opinion it is likely that some portion or the entire deferred tax asset will not be realized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASC Topic 740-10: Income Taxes
related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step
is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution
of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position
that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements.
A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate
settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in
the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not
criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The
accounting standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods,
disclosures, and transition. The adoption had no effect on the Company’s consolidated financial statements.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock Based Compensation</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Stock-based compensation is accounted for based
on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements
of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee
or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires
measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value
of the award.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to ASC Topic 505-50, for share-based
payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The
expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation
expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting
date. The Company recorded stock based compensation of $72,000 and $25,000 for employees during the nine months ended September
30, 2018 and 2017, respectively.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Loan Costs</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has early adopted ASU 2015-3 “Interest
– Imputation of Interest” - Simplifying the Presentation of Debt Issuance Costs. The loan costs are recorded as a
debt discount and amortized to interest expense over the terms of the note payable.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue recognition</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued Accounting Standards
Update (“ASU”) 2014-09 (ASC 606) and related amendments, which superseded all prior revenue recognition methods and
industry-specific guidance. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of
control for 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. In applying the revenue principles, an entity is required to identify the
contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price
to the performance obligations and recognize revenue when the performance obligation is satisfied (i.e., either over time or point
in time). ASC 606 further requires that companies disclose sufficient information to enable users of financial statements to understand
the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 606 provides companies an option of two
transition methods, the full retrospective method, in which case the standard would be applied to each prior reporting period presented
and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective
method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The
ASU is effective for annual reporting periods beginning after December 15, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective January 1, 2018 (beginning of fiscal
year 2018), the Company adopted the requirements of ASC 606 using the modified retrospective method. The guidance was not applied
to contracts that were complete at December 31, 2017, and the comparative information for the prior fiscal year has not been retrospectively
adjusted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The adoption of ASC 606 did not have any impact
on the Company’s consolidated financial statements. The adoption of ASC 606 did not have a significant impact on the Company’s
revenue recognition policy as revenues on the substantial majority of the Company’s contracts continue to be recognized over
time.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In adopting ASC 606, the Company elected to
use certain practical expedients permitted by the standard including electing to adopt the right-to-invoice practical expedient
on certain time and material contracts where the Company recognizes revenues as it is contractually able to invoice the customer
based on the control transferred to the customer.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following policies reflect specific criteria
for the various revenue streams of the Company:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue is recognized upon transfer of control
of conferencing services. The Company generally does not charge up-front fees and bills its customers based on usage. The Company
has elected the practical expedient to recognized revenue “as-billed”.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue for video equipment sales and security
surveillance equipment sales is recognized upon delivery and installation which the Company has determined is the point in time
that control is transferred to the customer. Due to the nature of the Company’s business it is not practicable to return
products therefore the Company has determined that it is not necessary to estimate for sales returns and allowances. The Company’s
manufacturers provide the highest quality products available. If there is a defect in a product related to materials or workmanship
the Company extends the manufacturer’s warranty to its customers. To date this process has never occurred. Therefore no warranty
liability is recorded.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue from periodic maintenance agreements
is generally recognized ratably over the respective maintenance periods provided no significant obligations remain and collectability
of the related receivable is probable. Maintenance agreements are considered stand ready arrangements for which control is transferred
to the customer ratably over time.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Disaggregation of Revenue</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company operates in two different geographic
locations and both locations have two sources of revenue; sales of product and sales of service. Service sales mainly include installation
of products related to security systems. The sales of products are generally contract based and short term in nature.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table illustrates our revenue
by type related to the nine months ended September 30, 2018:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Texas</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">New York</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 43%"><font style="font-size: 10pt">Sale of Products</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">2,640,089</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">81,457</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">2,721,546</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Service</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">500,973</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">96,675</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">597,648</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt; padding-left: 10pt"><font style="font-size: 10pt">Total Revenue from Customers</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,141,062</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">178,132</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,319,194</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Contract Balances</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table provides information about
receivables, contract assets and contract liabilities from contracts with customers.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 50%"><font style="font-size: 10pt">Capitalized Job Costs</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 22%; text-align: right"><font style="font-size: 10pt">53,856</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 22%; text-align: right"><font style="font-size: 10pt">141,267</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Deferred Revenue</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">369,769</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">479,426</font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Contract receivables are recognized when the
receipt of consideration is unconditional. The decrease in contract assets was primarily due to timing of billings and revenue
recognized on performance of services rendered.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The increase in contract liabilities was primarily
due to revenue deferred on jobs where services are being rendered.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2018, the Company recognized revenue of $442,436 relating to amounts that were included as a contract liability at December 31,
2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a practical expedient, the Company expenses
the costs of sales commissions that are paid to its sales force associated with obtaining contracts less than one year in length
in the period incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Remaining Performance Obligations</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company typically enters into contracts
that are one year or less in length. As such, the remaining performance obligations at September 30, 2018 are equal to the deferred
revenue disclosed above. The Company expects to recognize the full balance of the deferred revenue at September 30, 2018 within
the next year.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cost of Sales</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cost of sales includes cost of products and
cost of service. Product cost includes the cost of products and delivery costs. Cost of services includes labor and fuel expenses.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Concentrations of Credit Risk and Major
Customers</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Financial instruments which potentially subject
the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its
cash with high credit quality financial institutions. Almost all of the Company’s sales are credit sales which are primarily
to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The Company also performs
ongoing credit evaluations of its customers to help further reduce credit risk.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2018 and 2017, one customer accounted for 27% and 43%, respectively of revenues.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2018, two customers accounted
for 70% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the two customers:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 71%"><font style="font-size: 10pt">Customer 1</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 26%; text-align: right"><font style="font-size: 10pt">45</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Customer 2</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">25</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">70</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">%</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2017, three customers accounted
for 56% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the three customers:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 71%"><font style="font-size: 10pt">Customer 1</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 26%; text-align: right"><font style="font-size: 10pt">30</font></td>
<td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Customer 2</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">15</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Customer 3</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">11</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">56</font></td>
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">%</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Research and Development</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Research is planned search or critical investigation
aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (hereinafter
“product”) or a new process or technique (hereinafter “process”) or in bringing about a significant improvement
to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design
for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use.
It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation
of pilot plants. It does not include routine or periodic alterations to existing products, production lines, manufacturing processes,
and other on-going operations even though those alterations may represent improvements and it does not include market research
or market testing activities. Per FASB ASC 730, the Company expenses research and development cost as incurred.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Related Parties </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Parties are considered to be related to the
Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under
common control with the Company. Related parties also include principal owners of the Company, its management, members of the
immediate families of principal owners of the Company and its management and other parties with which the Company may deal if
one party controls or can significantly influence the management or operating policies of the other to an extent that one of the
transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party
transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related
party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost
is reflected as a distribution to related party.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Net Income per Common Share </u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Net income per common share is calculated
in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic income per share is computed by dividing net
income by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net
earnings per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would
be anti-dilutive. At September 30, 2018 the Company had 2,327,551,357 share equivalents issuable pursuant to embedded conversion
features. At December 31, 2017 the Company had 442,601,456 share equivalents issuable pursuant to embedded conversion features.</p>
615639
734489
73499
87756
59938
87023
958780
1143289
794830
794830
2507212
2482204
13962940
26499942
778000
740000
14740940
27239942
1387
31729
17158926
19958747
-29396982
-44739670
-12236669
-24749194
2941
-8544
-12233728
-24757738
2507212
2482204
1347604
1260430
344320
526281
1016261
48673
236991
45199
102339
57501
34113
34114
154925
146980
51642
81156
8800
3100
909333
572339
259426
250988
865394
570630
288016
247508
3108547
1497886
871119
712842
-1760943
-237456
-526799
-186561
-9370276
-3838201
-10460458
-3810593
2468667
306517
1760885
69432
716592
341819
246289
173312
-13593230
-4674378
-12979903
-4143169
-15354173
-4911834
-13506702
-4329730
-11485
3603
10888
-27921
-15342688
-4915437
-13517590
-4301809
215220
239791
72000
25000
19785
4833
59661
31238
118850
346322
-46069
74081
-5035
-2097
247499
42036
1121115
249634
-936228
-195167
-10738
59389
2514000
275000
59000
34248
260658
2396
260658
1058694
280483
111728
144705
58449
68437
180165
203154
71146
42656
-109657
76008
2468667
306517
1881036
319995
693102
84150
160000
160000
1016261
48673
greater than 50%
0.30
0.15
0.11
0.56
0.70
0.45
0.25
0.70
0.43
0.27
0.56
2327551357
442601456
25400000
102339
57501
11371
13333
5767
11042
150000
22667
2000
23438
5866
11576
150000
22667
2000
140559
200854
64250
14693
P1Y
P1Y
P1Y
P1Y
P1Y
P2Y
P3Y
154925
146980
1623830
794830
95000
204000
530000
794830
95000
204000
530000
1623830
146318
301243
P10Y
P10Y
P3Y
P10Y
P10Y
P3Y
0.0649
66667
1900000
0.10
0.0435
2017-08-06
2025-04-30
2017-08-06
92000
59000
112896
8811
1200000
0.12
1000
66667
146015
146015
17260
159279
18633
1611924
1891681
78627
1770027
1973579
54532
53610
134724
15300
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.10
0.10
0.05
12229
146338
8053
7105
47368
8434
6747
14056
28421
16868
24000
94737
17848
50632
108000
17053
123000
108000
113000
116523
265477
113000
54858
78000
53000
47368
422222
412222
100000
103158
1095000
8947
8947
7895
7895
52632
58000
15789
15789
12632
12632
26316
26316
31579
31579
31579
124689
66667
52632
105263
26316
55368
55368
113250
113250
18947
18947
129000
129000
113250
113250
118500
118500
122273
122273
279102
279102
118500
118500
52632
74754
81750
81750
57500
57500
52632
52632
527778
505556
527778
527778
100000
0
136842
136842
2952250
3409140
6822
5707
12331
9865
19911
23124
36702
68042
8447
70333
55125
51000
46620
106720
37500
43701
20542
10444
10965
70139
72569
17675
1456000
P1Y
P1Y
P1Y
P1Y
P1Y
P1Y
P1Y
P1Y
P1Y
P1Y
P1Y
P9M
P1Y
P1Y
P9M
P9M
P1Y
P9M
P9M
P9M
P9M
P9M
P9M
P1Y
P9M
P9M
P1Y
P2Y
P2Y
P1Y
P1Y
0.40
0.60
0.60
0.55
0.37
0.60
0.60
0.60
0.60
0.60
0.55
0.60
0.55
0.55
0.60
0.60
0.60
0.60
0.60
0.60
0.60
0.60
0.60
0.55
0.60
0.60
0.60
0.60
0.60
0.85
0.60
268717965
29493911
3182972
5308115
216069
1708498
2424
44139
9370276
-1485907
2455368
336094
2468667
537541
-1881036
-390996
5000000
3000000
45000
27000
15300
135000
1
0.20
The cost of funding is 20% over a six month term prorated to a five month term.
375000
0.30
72466081
106900
2952250
3409140
361619
609118
152481
297072
3607100
4093449
260658
25000
25000
479426
369769
1814
1814
141267
53856
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Capitalized Job Costs</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company records capitalized jobs costs
on the balance sheet and expenses the costs upon completion of related jobs based on when revenue is earned per ASC 606 “Revenue
Recognition.” As of September 30, 2018 and December 31, 2017, the Company had $53,856 and $141,267, respectively included
on their balance sheets under Capitalized Job Costs.</p>
.10
68226
68226
68226
68226
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="18" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Payments Due by Period</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Total</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Less than 1 year</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>1-3 Years</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>4-5 Years</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>5 Years +</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">Contractual Obligations:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 35%; padding-bottom: 1.5pt"><font style="font-size: 10pt">Operating Leases</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">68,226</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"> </td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">68,226</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"> </td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"> </td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"> </td>
<td style="width: 10%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Total Contractual Obligations:</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">68,226</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">68,226</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company amortizes the below identifiable
intangible assets over their useful lives on a straight line basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap; width: 50%"><font style="font-size: 10pt">Customer Relationships</font></td>
<td style="white-space: nowrap; width: 50%; text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><font style="font-size: 10pt">Brand</font></td>
<td style="white-space: nowrap; text-align: center"><font style="font-size: 10pt">10 years</font></td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"><font style="font-size: 10pt">Technology</font></td>
<td style="white-space: nowrap; text-align: center"><font style="font-size: 10pt">3 years</font></td></tr>
</table>
<p style="margin: 0pt"></p>
-0.11
-1.01
-0.06
-0.61
-0.11
-1.01
-0.06
-0.61
145840798
4846118
236390299
6998972
145840798
4846118
236390299
6998972
0
38000
0.58
0.42
0.12
3319194
3141062
178132
2721546
597648
2640089
81457
500973
96675
442436
2018-04-07
2000
150000
50000
475000
475000
475000
475000
400000
400000
475000
Company assumed a lease for office space with a four year term beginning on April 1, 2015 and ending on March 31, 2019.
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table illustrates our revenue
by type related to the nine months ended September 30, 2018:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Texas</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">New York</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">Total</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 43%"><font style="font-size: 10pt">Sale of Products</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">2,640,089</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">81,457</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 16%; text-align: right"><font style="font-size: 10pt">2,721,546</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font-size: 10pt">Service</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">500,973</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">96,675</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">597,648</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 2.5pt; padding-left: 10pt"><font style="font-size: 10pt">Total Revenue from Customers</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,141,062</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">178,132</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">3,319,194</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table provides information about
receivables, contract assets and contract liabilities from contracts with customers.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">September 30, 2018</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt">December 31, 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 50%"><font style="font-size: 10pt">Capitalized Job Costs</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 22%; text-align: right"><font style="font-size: 10pt">53,856</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 22%; text-align: right"><font style="font-size: 10pt">141,267</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">Deferred Revenue</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">369,769</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">479,426</font></td>
<td> </td></tr>
</table>
<p style="margin: 0pt"></p>
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13098
11557
84591
23434
18747
39056
50755
46868
200404
74001
145905
42848
64472
131876
23695
150229
131904
138006
142418
325078
138022
121717
95159
66932
65775
1311420
1015365
322204
359243
P30D
P30D
P30D
P30D
P10D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P30D
P10D
P30D
5045
4452
37223
15000
12000
25000
22334
30000
202404
50001
51168
25000
13841
23876
6642
27229
23904
25006
25894
59601
25022
74754
17159
13932
18406
889198
603143
219046
3000
141267
53856
6670
1635
10738
250000
350000
116792
116792
116792
0.009
0.009
P3M
P24M
1.94
2.93
0.00
0.0128
0.0225
414352963
3319194
2729293
2276930
1192548
840456
452363
177337
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287546
165396
290811
674636
300
15000
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recently Issued Accounting Standards Not
Yet Adopted</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has reviewed all recently issued,
but not yet adopted, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant
impact on our consolidated financial statements, except as described below.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued Accounting
Standards Update (ASU), Leases (Topic 842), intended to improve financial reporting about leasing transactions. The ASU affects
all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. Under the
new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months.
Consistent with current Generally Accepted Accounting Principles (GAAP), the recognition, measurement, and presentation of expenses
and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However,
unlike current GAAP—which requires only capital leases to be recognized on the statement of assets, liabilities, and members’
equity (deficit)—the new ASU will require both types of leases to be recognized on the statement of assets, liabilities,
and members’ equity (deficit). During July 2018, the FASB issued ASU 2018-10 and ASU 2018-11, to provide clarity and amend
a number of requirements, including comparative reporting requirements for initial adoption, as originally issued by Topic 842
and follows the same effective date as Topic 842. The ASU on leases will take effect for all public companies for fiscal years
beginning after December 15, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2017, the FASB issued Accounting
Standards Update 2017-04, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment
test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount
exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated
to that reporting unit. An entity also should consider income tax effects from any tax-deductible goodwill on the carrying amount
of the reporting unit when measuring the goodwill impairment loss, if any. This guidance is effective prospectively and is effective
for interim and annual periods beginning after December 15, 2019 with early adoption permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2018, the FASB issued Accounting Standards
Update 2018-07, to reduce cost and complexity and to improve financial reporting for share-based payment transactions for acquiring
goods or services from nonemployees. Under this update standard, an entity should apply the requirements to nonemployee awards
except for specific guidance on inputs to an option pricing model and the attribution of cost. Furthermore, this update standard
applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s
own operations by issuing share-based payment awards. This guidance is effective for interim and annual periods beginning after
December 15, 2018 with early adoption permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2018, the FASB issued Accounting
Standards Update 2018-13, to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement,
based on the concepts in the Concept Statement, including the consideration of costs and benefits. This guidance is effective
for interim and annual periods beginning after December 15, 2019 with early adoption permitted.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recently Adopted Accounting Standards</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2015, the FASB issued ASU 2015-14,
Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09
for all entities by one year. This update is effective for public business entities for annual reporting periods beginning after
December 15, 2017, including interim periods within those reporting periods. Earlier application was permitted only as of annual
reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. ASU 2014-09
was to become effective for us beginning January 2017; however, ASU 2015-14 deferred our effective date until January 2018, which
is when we plan to adopt this standard. The ASU permits two methods of adoption: retrospectively to each prior reporting period
presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized
at the date of initial application (the modified retrospective method). The ASU also requires expanded disclosures relating to
the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative
and quantitative disclosures are required for customer contracts, significant judgments and changes in judgments, and assets recognized
from the costs to obtain or fulfill a contract. We have completed the process of evaluating the effect of the adoption and determined
that our contracts for which customers purchase both surveillance products and installation services from us may result in a change
to our reported revenues as a result of the adoption.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Based on our evaluation process and review
of our contracts with customers, the timing and amount of revenue recognized based on ASU 2015-14 will be recognized when our performance
obligations are satisfied for both product sales and installation services. This differs from previous guidance in which we recognized
the sale of the products and installation services at the same time. We adopted the new standard effective January 1, 2018, using
the modified retrospective approach, and will expand our consolidated financial statement disclosures in order to comply with the
ASU. The adoption of this guidance did not have a material impact on our consolidated financial statements due to the short term
nature of our contracts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2017, the FASB issued Accounting
Standards Update 2017-01, to clarify the definition of a business. Under this updated standard, an entity will be able to more
consistently account for transactions when determining if such transactions represent acquisitions or disposals of assets or of
a business. This guidance is effective for interim and annual periods beginning after December 15, 2017. The adoption of this
guidance did not have a material impact on our consolidated financial statements.</p>
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