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The Company’s operations are based in Edison, New Jersey.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Basis of Presentation-Unaudited Interim Financial Information</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2019. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2018 and notes thereto contained in the Annual Report on Form 10-K of the Company as filed with the SEC on April 15, 2019.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The consolidated financial statements include the accounts of the Company and its controlled subsidiary, BlockSafe Technologies, Inc. (“BlockSafe”). BlockSafe is owned 49% by the Company and 31% by three executive officers of the Company, which combined represents an 80% controlling interest in BlockSafe. Accordingly, BlockSafe is consolidated by the Company. Intercompany balances and transactions have been eliminated in consolidation. At September 30, 2019, noncontrolling interests represents 51% of BlockSafe that the Company does not directly own. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Going Concern</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the nine months ended September 30, 2019, the Company incurred a net loss of $4,052,661 and used cash in operating activities of $987,078 and at September 30, 2019, the Company had a stockholders’ deficit of $16,364,740. Also, at September 30, 2019, the Company is in default on notes payable and convertible notes payable in the aggregate amount of $3,551,924. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that these financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2018 financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At September 30, 2019, the Company had cash on hand in the amount of $7,050. Subsequent to September 30, 2019, the Company issued two unsecured promissory note for proceeds of $188,600 and one unsecured convertible promissory note for proceeds of $125,000. Management estimates that the current funds on hand will be sufficient to continue operations through the next six months. The Company’s ability to continue as a going concern is dependent upon its ability to continue to implement its business plan. Currently, management is attempting to increase revenues by selling through a channel of distributors, value added resellers, strategic partners and original equipment manufacturers. While the Company believes in the viability of its strategy to increase revenues, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to increase its customer base and realize increased revenues. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Use of Estimates</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to accounting for financing obligations, assumptions used in valuing stock instruments issued for services, assumptions used in valuing derivative liabilities, the valuation allowance for deferred tax assets, and the accrual of potential liabilities. Actual results could differ from those estimates.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Revenue Recognition</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company follows the guidance of Accounting Standards Codification (ASC) 606, <i>Revenue from Contracts with Customers</i>. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company’s revenue consists of revenue from sales and support of our software products. Revenue primarily consists of sales of software licenses of our ProtectID®, GuardedID® and MobileTrust® products. We recognize revenue from these arrangements ratably over the contractual service period. For service contracts, the Company’s performance obligations are satisfied, and the related revenue is recognized, as services are rendered. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Cost of revenue includes direct costs and fees related to the sale of our products. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The following tables present our revenue disaggregated by major product and service lines:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="6"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Three Months Ended</b></p></td><td valign="bottom"></td></tr><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30, </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Software</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">123,023</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">58,925</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Service</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">48,261</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">61,906</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total revenue</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">171,284</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">120,831</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="6"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months ended</b></p></td><td valign="bottom"></td></tr><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Software</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">513,813</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">169,310</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Service</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">96,896</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">187,165</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total revenue</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">610,709</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">356,475</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Leases</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Prior to January 1, 2019, the Company accounted for leases under ASC 840, <i>Accounting for Leases</i>. Effective January 1, 2019, the Company adopted the guidance of ASC 842, <i>Leases,</i> which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective basis method under which prior comparative periods are not restated. The Company elected to exclude from its balance sheets recognition of leases having a term of 12 months or less (“short-term leases”) and elected to not separate lease components and non-lease components for its long-term leases. Lease expense is recognized on a straight-line basis over the lease term. At January 1, 2019, the Company had no leases that required recognition of operating lease right-of-use assets or liabilities for operating leases upon adoption of ASC 842. On January 31, 2019, the Company commenced a lease that resulted in the recognition of operating lease right-of-use assets of $214,272, and liabilities for operating leases of $214,272.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Fair Value of Financial Instruments</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company follows the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) for fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Level 1—Quoted prices in active markets for identical assets or liabilities.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Level 3—Unobservable inputs based on the Company's assumptions.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company is required to use of observable market data if such data is available without undue cost and effort.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company believes the carrying amounts reported in the balance sheet for accounts receivable, accounts payable, accrued expenses, convertible notes, and notes payables approximate fair values because of the short-term nature of these financial instruments.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">As of September 30, 2019 and December 31, 2018, the Company’s balance sheet includes Level 3 liabilities comprised of the fair value of embedded derivative liabilities of $2,751,209 and $1,313,904, respectively (see Note 5). These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. The following table sets forth a summary of the changes in the estimated fair value of our embedded derivative during the nine month periods ended September 30, 2019 and 2018:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>ended </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019 </b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>ended </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Fair value at beginning of period </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,313,904</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">623,195</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Recognition of derivative liabilities upon initial valuation </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,369,518</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">903,851</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Extinguishment of derivative liabilities </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(1,002,790</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(58,317</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Net change in the fair value of derivative liabilities </p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,302,374</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(628,769</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Fair value at end of period </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,983,006</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">839,960</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Derivative Financial Instruments</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the September 30, 2019, reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Stock-Based Compensation</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company issues stock options, warrants, and shares of common stock as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with FASB ASC 718, <i>Compensation – Stock Compensation </i>(Topic 718). Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">In periods through December 31, 2018, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50<i>, Equity - Based Payments to Non-Employees</i>. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The final fair value of the share-based payment transaction is determined at the performance completion date. For interim periods, the fair value is estimated, and the percentage of completion is applied to that estimate to determine the cumulative expense recorded.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">On January 1, 2019, the Company adopted ASU 2018-07, <i>Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting</i>. ASU 2018-07 simplifies the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions are measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial statements for the three months and nine months ended September 30, 2019 or the previously reported financial statements.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Loss per Share</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that outstanding options, warrants, and convertible preferred stock are exercised and the proceeds are used to purchase common stock at the average market price during the period. Options, warrants, and convertible preferred stock may have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">For the nine months ended September 30, 2019 and 2018, the dilutive impact of stock options exercisable into 259,500,002 and 259,000,002 shares of common stock, respectively, convertible Series B Preferred stock that can convert into 24,036,508 and 2,743,297 shares of common stock, respectively, and convertible notes payable that can convert into 233,091,594 and 40,858,491 shares of common stock, respectively, have been excluded because their impact on the loss per share is anti-dilutive.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Concentrations</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">For the nine months ended September 30, 2019, sales to three customers comprised 57%, 20% and 16% of revenues, respectively. For the nine months ended September 30, 2018, sales to two customers comprised 63% and 23% of revenues, respectively. At September 30, 2019, three customers comprised 43%, 29% and 12% of accounts receivable, respectively. At December 31, 2018, two customers comprised 68% and 12% of accounts receivable, respectively.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits. At September 30, 2019, the Company did not have cash deposits that exceeded the federally insured limit of $250,000. The Company believes that no significant concentration of credit risk exists with respect to its cash balances because of its assessment of the creditworthiness and financial viability of the financial institution. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Recent Accounting Pronouncements</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">In June 2016, the FASB issued ASU No. 2016-13, <i>Credit Losses - Measurement of Credit Losses on Financial Instruments</i> ("ASC 326"). The standard significantly changes how entities will measure credit losses for most financial assets , including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model , under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2021. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. </p></div></div></div></div></div></div></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Convertible notes payable consisted of the following:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>December 31,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Secured </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(a) DART, in default </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">542,588</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">542,588</p></td><td valign="bottom" width="1%"></td></tr><tr bgcolor="#ffffff"><td></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><u>Unsecured </u></p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(b) Convertible notes with fixed conversion features, in default</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">895,512</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">895,512</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(c) Convertible notes with adjustable conversion features</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">812,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">695,000</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total convertible notes principal outstanding</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">2,250,100</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">2,133,100</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Debt discount</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">(466,076</p></td><td valign="bottom" width="1%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">(521,763</p></td><td valign="bottom" width="1%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Convertible notes, net of discount</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">1,784,024</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="right">1,611,337</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="top" width="3%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="top" width="3%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">(a)</p></td><td valign="top"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">At September 30, 2019 and December 31, 2018, $542,588 of notes payables are due to DART/Citco Global. The notes are convertible into shares of the Company’s common stock based on adjustable conversion prices, are secured by all of the Company’s assets, were due in 2010, and are currently in default. Beginning in 2009, the note holder agreed to the forbearance of any further interest on the notes payable to DART/Citco Global.</p></td></tr><tr><td></td><td></td><td> </td></tr><tr><td valign="top" width="3%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="top" width="3%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">(b)</p></td><td valign="top"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">At September 30, 2019 and December 31, 2018, convertible notes payable with fixed conversion features (“fixed convertible notes”) consisted of 13 unsecured convertible notes convertible at a fixed amount into 13 shares of the Company’s common stock, at fixed conversion prices ranging from $1,950,000 to $9,750,000,000 per share, as defined in the agreements and adjusted for applicable reverse stock splits. The notes are unsecured, bear interest at 8% to 18% per annum, were due on various dates from March 2008 to March 2015, and are currently in default. At December 31, 2018, the balance of the accrued interest on the fixed convertible notes was $1,079,764. During the nine months ended September 30, 2019, interest of $56,195 was accrued. At September 30, 2019, the balance of accrued interest on the fixed convertible notes was $1,135,959.</p></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="top" width="3%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="top" width="3%"><p style="margin:0px 0px 0px 0in;Font:10pt Times New Roman;padding:0px" align="justify">(c)</p></td><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At December 31, 2018, there were $695,000 of convertible notes with adjustable conversion features outstanding. During the nine months ended September 30, 2019, convertible notes for $792,000 were issued (see below), and convertible notes for $675,000 were converted into shares of the Company’s common stock. At September 30, 2019, the balance of the convertible notes with adjustable conversion features was $812,000.</p></td></tr><tr><td></td><td></td><td> </td></tr><tr><td></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">During the nine months ended September 30, 2019, the Company issued eleven convertible notes payable with adjustable conversion features to three lenders for aggregate proceeds of $792,000, bearing interest at 8% to 10% per annum, and maturing through September 2020. At the option of the holder, the notes are convertible into shares of common stock of the Company at a price per share discount of 58% to 61% of the average market price of the Company’s common stock, as defined, for 15 to 20 days preceding a conversion notice. As a result, the Company determined that the conversion option of the convertible notes were not considered indexed to the Company’s own stock and characterized the fair value of the conversion features as derivative liabilities upon issuance. The Company determined that upon issuance of the convertible notes between January 2019 and September 2019, the initial fair value of the embedded conversion feature totaled $1,369,518 (see Note 8), of which $792,000 was recorded as debt discount offsetting the face amount of the convertible notes, and the remainder of $577,518 was recorded as private placement costs. During the nine months ended September 30, 2019, one note holder elected to convert six notes totaling $675,000 plus interest of $44,470 (total of $719,470) into 392,380,265 shares of the Company’s common stock at conversion prices ranging from $0.00099 to $0.0087 per share. On the dates of conversion, the closing price of the Company’s common stock ranged from $0.0019 to $0.0178 per share, or total fair value of shares of $1,488,296. The Company followed the general extinguishment model to record the settlement of the debt. The debt and accrued interest totaled $719,470, the related unamortized discount totaled ($255,736), and the shares issued were measured at their fair value of $1,488,296. The difference of $1,024,563 was recorded as loss on extinguishment of debt. In addition, the bifurcated conversion option derivatives, after a final mark-up to $1,002,790, were removed and recorded as a gain on extinguishment of derivative liabilities.</p></td></tr><tr><td></td><td></td><td> </td></tr><tr><td></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At December 31, 2018, the balance of unamortized discount on convertible notes with adjustable conversion features was $521,763. During the nine months ended September 30, 2019, debt discount of $792,000 was recorded, debt discount amortization of $591,951 was recorded, and $255,736 of debt discount was removed related to debt that was converted. At September 30, 2019, the balance of the unamortized discount was $466,076.</p></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px">At September 30, 2019 and December 31, 2018, accrued interest due for all convertible notes was $1,168,327 and $1,099,005, respectively, and is included in accrued interest in the accompanying balance sheets. Interest expense for all convertible notes payable for the nine months ended September 30, 2019 and 2018 was $112,171 and $44,107, respectively.</p></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At September 30, 2019 and December 31, 2018, convertible notes payable - related parties consist of 12 convertible notes payable in the aggregate of $355,500. The notes are unsecured and have extended due dates of December 31, 2019. Six notes totaling $268,000 are due to the Company’s Chief Executive Officer, at a compounded interest rate of 8% per annum; two notes totaling $57,000 are due to the Company’s VP of Technology, interest at prime plus 2% and prime plus 4% per annum; and four notes totaling $30,000 are due to the spouse of the Company’s Chief Technology Officer at a compounded interest rate of 8% per annum. $33,000 of the notes are convertible at a fixed conversion price of $7,312,500 per share and $322,500 of the notes are convertible at a fixed conversion price of $9,750,000,000 per share, as defined in the note agreements and adjusted for applicable reverse stock splits. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At December 31, 2018, accrued interest due for the convertible notes – related parties was $563,805. During the nine months ended September 30, 2019, interest of $53,854 was accrued. At September 30, 2019, accrued interest due for the convertible notes – related parties was $617,659. </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Notes payable consisted of the following:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>December 31,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Unsecured</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(a) Promissory notes-in default </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">413,824</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">413,824</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(b) Promissory notes – StrikeForce Investor Group-in default</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,225,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,225,000</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(c) Promissory notes issued by BlockSafe ($475,000 and zero in default at September 30, 2019 and December 31, 2018, respectively) </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">475,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">775,500</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total notes payable principal outstanding</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,113,824</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,414,324</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Debt discount</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(- </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(195,654</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Notes payable, net of discount</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,113,824</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,218,670</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="top" width="3%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="top" width="3%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(a)</p></td><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Notes payable, with interest from 8% to 14% per annum, due on various dates from December 2011 to July 2017 and are currently in default. At December 31, 2018, the balance of the accrued interest on the notes payable-various was $505,454. During the nine months ended September 30, 2019, $34,073 of interest was accrued. At September 30, 2019, accrued interest on the notes payable-various was $539,527.</p></td></tr><tr><td></td><td></td><td> </td></tr><tr><td valign="top" width="3%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="top" width="3%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(b)</p></td><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Notes payable to StrikeForce Investor Group (SIG), made up of various investors with unsecured notes, interest at 10% per annum, originally due in 2011, and currently in default. At December 31, 2018, the balance of the accrued interest on the notes payable-SIG was $1,509,844. During the nine months ended September 30, 2019, $91,623 of interest was accrued. At September 30, 2019, accrued interest on the notes payable-SIG was $1,601,467.</p></td></tr><tr><td></td><td></td><td> </td></tr><tr><td valign="top" width="3%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="top" width="3%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(c)</p></td><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At December 31, 2018, BlockSafe (see Note 1) had $775,500 of outstanding unsecured promissory notes, bearing interest at 8% per annum, and maturing through September 2019. During the nine months ended September 30, 2019, $5,000 of unsecured promissory notes were paid, and note holders agreed to exchange $295,500 of principal into a financing obligation (see Note 4). At September 30, 2019, the balance of the unsecured promissory notes was $475,000, and currently in default.</p></td></tr><tr><td></td><td></td><td> </td></tr><tr><td></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At December 31, 2018, the balance of the unamortized discount on the unsecured promissory notes was $195,653. During the nine months ended September 30, 2019, debt discount amortization of $195,653 was recorded and the balance of the unamortized discount at September 30, 2019 was $0. </p></td></tr><tr><td></td><td></td><td> </td></tr><tr><td></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At December 31, 2018, the balance of the accrued interest on the unsecured promissory notes was $46,388. During the nine months ended September 30, 2019, $34,681 of interest was accrued and $19,700 of accrued interest was converted into a financing obligation (See Note 6). At September 30, 2019, accrued interest on the unsecured promissory notes was $61,369.</p></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At September 30, 2019 and December 31, 2018, accrued interest due for all notes payable above was $2,202,363 and $2,061,686, respectively, and is included in accrued interest in the accompanying balance sheets. Interest expense for notes payable for the nine months ended September 30, 2019 and 2018 was $140,677 and $99,478, respectively.</p></div></div></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Notes payable-related parties notes represent eighteen unsecured notes payable to the Company’s Chief Executive Officer ranging in interest rates of 0% per annum to 10% per annum. The notes are unsecured and have extended due dates of December 31, 2019. At September 30, 2019 and December 31, 2018, the balance due under these notes was $742,513.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At December 31, 2018, accrued interest due for the notes was $703,944. During the nine months ended September 30, 2019, interest of $41,945 was accrued. At September 30, 2019, accrued interest due for the notes was $745,802. </p></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">In 2018, BlockSafe issued promissory notes to nineteen unrelated parties aggregating $775,500 (see Note 4). As part of each promissory note agreement BlockSafe agreed to pay a financing obligation to the note holders equal to the note principal in tokens, as defined, to be issued by BlockSafe. In addition, in December 2018, BlockSafe agreed to issue tokens to an unrelated party for receipt of $50,000. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At December 31, 2018, the total of the financing obligation for BlockSafe was $825,500. During the nine months ended September 30, 2019, BlockSafe agreed to issue tokens to four unrelated parties for receipt of $122,500. In addition, holders of unsecured promissory notes issued by BlockSafe agreed to exchange $295,500 principal and $19,700 of accrued interest into the financing obligation to be paid by tokens to be issued by BlockSafe. At September 30, 2019, the financing obligation was $1,263,200. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At September 30, 2019 and through the date of filing, BlockSafe has not developed or issued any tokens and there is no assurance as to whether, or at what amount, or on what terms, tokens will be available to be issued, if ever. At September 30, 2019, as the tokens do not exist yet, and were not considered equity, management determined that 100% of the obligation of $1,263,200 is probable of being a liability to be settled by BlockSafe, through the issuance of tokens, or through other means if tokens are never issued, and therefore recorded the financing obligation. </p></div></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">On September 6, 2017, the Company entered into a litigation funding agreement with Therium Inc. (subsequently Therium Luxembourg) and VGL Capital, LLC (collectively the “Funders”). Under the agreement, the Company received $1,500,000 from the Funders to allow the Company to pursue patent enforcement actions against infringements of its patents (see Note 11). In exchange, the Funders are entitled to receive, after the payment of legal fees, the first $1,500,000 from the gross proceeds of any claims awarded, 10% of any additional claim proceeds until the Funders have received an additional $7,500,000, and 2.5% of any claim proceeds thereafter. The Funders shall be paid only in the event that the Company achieves recoveries of claim proceeds. At September 30, 2019 and December 31, 2018, the Company has reflected the $1,500,000 received from the Funders as a contingent payment obligation to be paid only if claim proceeds are recovered</p></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At September 30, 2019, the Company had convertible promissory notes outstanding that are convertible into shares of common stock of the Company at the option of the holders at price per share discounts ranging from 20% to 61% of the Company’s common stock market price, as defined in the note agreements. As the ultimate determination of shares to be issued upon conversion of these notes could exceed the current number of available authorized shares, the Company determined that the conversion features of the convertible notes were not considered indexed to the Company’s own stock and characterized the fair value of the conversion features as derivative liabilities. Accordingly, the conversion features of the notes were separated from the host contracts (i.e. the notes) and characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At December 31, 2018, the balance of the derivative liabilities was $1,313,904. During the nine months ended September 30, 2019, the Company recorded additions of $1,369,518 related to the conversion features of notes issued during the period (see Note 2), and an increase in fair value of derivatives of $1,302,374. In addition, the Company recorded a decrease in derivative liability of $1,002,790 related to derivative liabilities that were extinguished. At September 30, 2019, the balance of the derivative liabilities was $2,983,006. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The derivative liability was valued at the following dates using a probability weighted Black-Scholes-Merton model with the following assumptions:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>January 2019 to September 2019</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>(dates of inception)</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>December 31, </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Conversion feature:</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Risk-free interest rate</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.23</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.18%-0.25</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.25</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Expected volatility</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">170</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">118%-163</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">129</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Expected life (in years)</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1 year</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1 year</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1 year</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Expected dividend yield</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td></tr><tr bgcolor="#cceeff"><td></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Fair Value:</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Conversion feature</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,983,006</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,369,518</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,313,904</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The risk-free interest rate was based on rates established by the Federal Reserve Bank. The expected volatility is based on the historical volatility of the Company’s stock. The expected life of the conversion feature of the notes was based on the remaining terms of the related notes. The expected dividend yield was based on the fact that the Company has not customarily paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future.</p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">In January 2019, the Company entered into a noncancelable operating lease for its headquarters office requiring payments of $4,409 per month, payments increasing 3% each year, and ending on January 31, 2024. At September 30, 2019, the remaining lease term was 4.33 years. The Company does not have any other leases. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The operating lease ROU asset includes any lease payments made and excludes lease incentives.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The components of lease expense and supplemental cash flow information related to leases for the period are as follows:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>ended</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><u>Lease Cost</u></p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Operating lease cost (included in general and administration in the Company’s unaudited condensed statement of operations)</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">37,456</p></td><td valign="bottom" width="1%"></td></tr><tr bgcolor="#ffffff"><td></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><u>Other Information</u></p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Cash paid for amounts included in the measurement of lease liabilities for the three quarters ended September 30, 2019</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">39,685</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Weighted average remaining lease term – operating leases (in years)</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">4.3</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Average discount rate – operating leases</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.0</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The supplemental balance sheet information related to leases for the period is as follows:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>At</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><u>Operating leases</u></p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Long-term right-of-use assets</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">190,600</p></td><td valign="bottom" width="1%"></td></tr><tr bgcolor="#ffffff"><td></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Short-term operating lease liabilities</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">26,618</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Long-term operating lease liabilities</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">166,164</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total operating lease liabilities</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">192,782</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;text-indent:0.5in;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Maturities of the Company’s lease liabilities are as follows:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><b>Year Ending</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Operating Leases</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2019 (remaining 3 months)</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">13,205</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2020</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">54,371</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2021</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">56,000</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2022</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">57,676</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2023</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">59,411</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2024</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">4,963</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 10pt;Font:10pt Times New Roman;padding:0px" align="justify">Total lease payments</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">245,626</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 10pt;Font:10pt Times New Roman;padding:0px" align="justify">Less: Imputed interest/present value discount</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(52,844</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 20pt;Font:10pt Times New Roman;padding:0px" align="justify">Present value of lease liabilities</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">192,782</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Lease expenses were $37,456 and $38,384 during the nine months ended September 30, 2019 and 2018, respectively.</p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Common Stock</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">During the nine months ended September 30, 2019, the Company issued an aggregate of 37,906,356 shares of its common stock as follows:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td width="4%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="top" width="4%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><font style="font: 10pt Symbol;">·</font></p></td><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company issued 22,500 shares of its common stock for services, valued at $112.</p></td></tr><tr><td></td><td></td><td></td></tr><tr><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><font style="font: 10pt Symbol;">·</font></p></td><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">A convertible note holder converted $675,000 of principal and $44,470 of accrued interest into 392,380,265 shares of common stock at conversion prices ranging from $0.00099 to $0.0087 per share, with a total fair value of $1,488,296.</p></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">In September 2016 and December 2017, the Company issued options to purchase an aggregate of 259,000,000 shares of its common stock to management and employees. In July 2018, the Company issued options to purchase an aggregate of 500,001 shares of its common stock to a consulting firm. The options are exercisable at $0.016 to $0.00625 per share, vested in 6 to 12 months, and expire through December 2027. During the nine months ended September 30, 2019 and 2018, the Company recognized compensation costs of $2,017 and $356,143, respectively, related to the amortization of the fair value of options that vested. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The table below summarizes the Company’s stock option activities for the period January 1, 2019 to September 30, 2019:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Number of</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Options Shares</b> </p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Exercise Price Range</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Per Share</b> </p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Weighted Average Exercise Price</b> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Balance, January 1, 2019</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,500,002</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057-2,242,500</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom" width="1%"></td></tr><tr bgcolor="#ffffff"><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Granted</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Exercised</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Expired</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Balance outstanding, September 30, 2019</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,500,002</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057-2,242,500</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Balance exercisable, September 30, 2019</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,486,303</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057-2,242,500</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At September 30, 2019, the intrinsic value of outstanding options was zero. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The following table summarizes information concerning the Company’s stock options as of September 30, 2019:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="10"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Options Outstanding</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="10"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Options Exercisable</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td></tr><tr><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Range of Exercise Prices</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Number Outstanding</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Average Remaining Contractual Life (in years)</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Weighted Average Exercise Price</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Number Exercisable</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Average Remaining Contractual Life (in years)</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Weighted Average Exercise Price</b></p></td><td valign="bottom"></td></tr><tr><td colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">975,000,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1.00</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">975,000,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1.00</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">975,000,000</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">63,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">63,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.016</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">500,001</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.016</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">500,001</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.016</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.00625</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">196,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">196,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td style="BORDER-BOTTOM: 3px double"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="top"><p style="margin:0px 0px 0px 8.9pt;Font:10pt Times New Roman;padding:0px" align="right">0.00625 - 975,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,500,002</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,500,002</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Legal Proceedings</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">On June 20, 2016, the Company initiated additional patent litigation against three major competitors in the U.S. District Court for the District of New Jersey, for infringement of United States Patent No. 8,484,698. On March 14, 2017, one of the parties initiated an inter partes review (IPR) (a procedure for challenging the validity of a United States patent before the United States Patent and Trademark Office) against the Company’s second Patent No. 8,484,698. In October 2019, the litigation against the remaining two parties was dismissed. Management is currently considering its options regarding the two parties, Duo and Centrify. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">On March 14, 2017, the Company initiated additional patent litigation against two major competitors in the U.S. District Court for the District of Massachusetts, for infringement of United States Patent Nos. 7,870,599, 8,484,698 and 8,713,701. The Company’s management is currently considering its options in the Massachusetts litigation. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">On March 14, 2017, the Company initiated additional patent litigation against two major competitors in the U.S. District Court for the Eastern District of Virginia, for infringement of United States Patent Nos. 7,870,599, 8,484,698 and 8,713,701. On June 13, 2017, one of the competitors initiated a lawsuit against the Company in the U.S. District Court for the District of New Jersey for patent infringement (which the Company believe is without merit and will defend vigorously). This litigation is ongoing. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">On December 1, 2017, The United States District Court for the Central District of California issued an opinion in the <i>StrikeForce Technologies, Inc. v. SecureAuth Corp</i>. case, which invalidated claims of U.S. Patent Nos. 7,870,599, 8,484,698 and 8,713,701 under 35 U.S.C. §101. The Company strongly disagreed with the Court’s decision and an appeal was filed by its attorney in July 2019. In October 2019, the Supreme Court of the United States denied the Company’s petition for a writ of certiorari in <i>StrikeForce Technologies, Inc. v. SecureAuth Corp (19-103).</i> Thus, the claims asserted against SecureAuth in the Central District of California, case no. 2:17-cv-04314-JAK-SK, remain invalid under 35 U.S.C. 101. The Company’s three patents contain a total of 108 claims, 43 claims were deemed invalid, however, 65 claims are still valid. Despite the Supreme Court’s decision, the Company’s Protect ID® products still retain patent protection and the Company’s management intends to further expand those protections with new patents in the coming months. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">On December 4, 2017, <i>StrikeForce Technologies, Inc. v. Trustwave Holdings, Inc.,</i> Civil Action No. 2:16-cv-03573-JMV-MF which was pending in the United States District Court for the District of New Jersey, was settled. Trustwave’s infringing sales were made as an OEM of Duo Security Incorporated. The Company agreed to dismiss its claims against Trustwave because they were essentially duplicative of its claims against Duo Security Incorporated pursuant to <i>StrikeForce Technologies, Inc</i>. <i>v. Duo Security Incorporated</i>, Civil Action No. 2:16-cv-03571.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><i><u>Asset Sale and Licensing Agreement</u></i></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">On August 24, 2015, the Company entered into an agreement with Cyber Safety, Inc., a New York corporation (“Cyber Safety”) for Cyber Safety to license, and retain an option to purchase, the patents and intellectual property related to the GuardedID® and MobileTrust® software. Cyber Safety had the option to buy the Company’s GuardedID® patent for $9,000,000 that expires on September 30, 2020. In March 2019, the option to purchase agreement was modified to increase the purchase price to $10,000,000 and extend the expiration date to September 30, 2021. If the purchase price is not paid by September 30, 2021, it will increase to $11,000,000 and be due September 30, 2022. The Company anticipates, but cannot guarantee, Cyber Safety will complete the purchase by September 30, 2021. Cyber Safety will also resell the Company’s GuardedID® and MobileTrust® products, for which the Company will receive a royalty, while the Company retains an unlimited license to resell those products. Cyber Safety also licensed the Malware Suite until September 30, 2020 and agreed to pay the Company 15% to 20% of the net amount Cyber Safety receives from this product. During the nine months ended September 30, 2019 and 2018, the Company recorded revenue of $350,628 and $162, respectively, from Cyber Safety.</p></div></div></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Subsequent to September 30, 2019, the Company issued one unsecured convertible promissory note aggregating $125,000, bearing interest at 10% per annum, and maturing in nine months through August 2020. The note is convertible at a 62% discount to the price of the Company’s common stock, as defined. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Subsequent to September 30, 2019, the Company issued two unsecured promissory notes aggregating $188,600, bearing interest at 15% to 31% per annum, and maturing in twelve to eighteen months through April 2021. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Subsequent to September 30, 2019, a convertible note holder converted $70,000 of principal and $5,672 of accrued interest into 79,828,798 shares of common stock at conversion prices ranging from $0.0009 to $0.001 per share. </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2019. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2018 and notes thereto contained in the Annual Report on Form 10-K of the Company as filed with the SEC on April 15, 2019.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The consolidated financial statements include the accounts of the Company and its controlled subsidiary, BlockSafe Technologies, Inc. (“BlockSafe”). BlockSafe is owned 49% by the Company and 31% by three executive officers of the Company, which combined represents an 80% controlling interest in BlockSafe. Accordingly, BlockSafe is consolidated by the Company. Intercompany balances and transactions have been eliminated in consolidation. At September 30, 2019, noncontrolling interests represents 51% of BlockSafe that the Company does not directly own. </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the nine months ended September 30, 2019, the Company incurred a net loss of $4,052,661 and used cash in operating activities of $987,078 and at September 30, 2019, the Company had a stockholders’ deficit of $16,364,740. Also, at September 30, 2019, the Company is in default on notes payable and convertible notes payable in the aggregate amount of $3,551,924. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that these financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2018 financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">At September 30, 2019, the Company had cash on hand in the amount of $7,050. Subsequent to September 30, 2019, the Company issued two unsecured promissory note for proceeds of $188,600 and one unsecured convertible promissory note for proceeds of $125,000. Management estimates that the current funds on hand will be sufficient to continue operations through the next six months. The Company’s ability to continue as a going concern is dependent upon its ability to continue to implement its business plan. Currently, management is attempting to increase revenues by selling through a channel of distributors, value added resellers, strategic partners and original equipment manufacturers. While the Company believes in the viability of its strategy to increase revenues, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to increase its customer base and realize increased revenues. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.</p></div></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to accounting for financing obligations, assumptions used in valuing stock instruments issued for services, assumptions used in valuing derivative liabilities, the valuation allowance for deferred tax assets, and the accrual of potential liabilities. Actual results could differ from those estimates.</p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company follows the guidance of Accounting Standards Codification (ASC) 606, <i>Revenue from Contracts with Customers</i>. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company’s revenue consists of revenue from sales and support of our software products. Revenue primarily consists of sales of software licenses of our ProtectID®, GuardedID® and MobileTrust® products. We recognize revenue from these arrangements ratably over the contractual service period. For service contracts, the Company’s performance obligations are satisfied, and the related revenue is recognized, as services are rendered. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Cost of revenue includes direct costs and fees related to the sale of our products. </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The following tables present our revenue disaggregated by major product and service lines:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="6"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Three Months Ended</b></p></td><td valign="bottom"></td></tr><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30, </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Software</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">123,023</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">58,925</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Service</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">48,261</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">61,906</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total revenue</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">171,284</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">120,831</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="6"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months ended</b></p></td><td valign="bottom"></td></tr><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Software</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">513,813</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">169,310</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Service</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">96,896</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">187,165</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total revenue</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">610,709</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">356,475</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Prior to January 1, 2019, the Company accounted for leases under ASC 840, <i>Accounting for Leases</i>. Effective January 1, 2019, the Company adopted the guidance of ASC 842, <i>Leases,</i> which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective basis method under which prior comparative periods are not restated. The Company elected to exclude from its balance sheets recognition of leases having a term of 12 months or less (“short-term leases”) and elected to not separate lease components and non-lease components for its long-term leases. Lease expense is recognized on a straight-line basis over the lease term. At January 1, 2019, the Company had no leases that required recognition of operating lease right-of-use assets or liabilities for operating leases upon adoption of ASC 842. On January 31, 2019, the Company commenced a lease that resulted in the recognition of operating lease right-of-use assets of $214,272, and liabilities for operating leases of $214,272.</p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company follows the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) for fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Level 1—Quoted prices in active markets for identical assets or liabilities.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Level 3—Unobservable inputs based on the Company's assumptions.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company is required to use of observable market data if such data is available without undue cost and effort.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company believes the carrying amounts reported in the balance sheet for accounts receivable, accounts payable, accrued expenses, convertible notes, and notes payables approximate fair values because of the short-term nature of these financial instruments.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">As of September 30, 2019 and December 31, 2018, the Company’s balance sheet includes Level 3 liabilities comprised of the fair value of embedded derivative liabilities of $2,751,209 and $1,313,904, respectively (see Note 5). These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. The following table sets forth a summary of the changes in the estimated fair value of our embedded derivative during the nine month periods ended September 30, 2019 and 2018:</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>ended </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019 </b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>ended </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Fair value at beginning of period </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,313,904</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">623,195</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Recognition of derivative liabilities upon initial valuation </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,369,518</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">903,851</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Extinguishment of derivative liabilities </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(1,002,790</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(58,317</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Net change in the fair value of derivative liabilities </p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,302,374</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(628,769</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Fair value at end of period </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,983,006</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">839,960</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the September 30, 2019, reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.</p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">The Company issues stock options, warrants, and shares of common stock as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with FASB ASC 718, <i>Compensation – Stock Compensation </i>(Topic 718). Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">In periods through December 31, 2018, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50<i>, Equity - Based Payments to Non-Employees</i>. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The final fair value of the share-based payment transaction is determined at the performance completion date. For interim periods, the fair value is estimated, and the percentage of completion is applied to that estimate to determine the cumulative expense recorded.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">On January 1, 2019, the Company adopted ASU 2018-07, <i>Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting</i>. ASU 2018-07 simplifies the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions are measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial statements for the three months and nine months ended September 30, 2019 or the previously reported financial statements.</p></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that outstanding options, warrants, and convertible preferred stock are exercised and the proceeds are used to purchase common stock at the average market price during the period. Options, warrants, and convertible preferred stock may have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">For the nine months ended September 30, 2019 and 2018, the dilutive impact of stock options exercisable into 259,500,002 and 259,000,002 shares of common stock, respectively, convertible Series B Preferred stock that can convert into 24,036,508 and 2,743,297 shares of common stock, respectively, and convertible notes payable that can convert into 233,091,594 and 40,858,491 shares of common stock, respectively, have been excluded because their impact on the loss per share is anti-dilutive.</p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">For the nine months ended September 30, 2019, sales to three customers comprised 57%, 20% and 16% of revenues, respectively. For the nine months ended September 30, 2018, sales to two customers comprised 63% and 23% of revenues, respectively. At September 30, 2019, three customers comprised 43%, 29% and 12% of accounts receivable, respectively. At December 31, 2018, two customers comprised 68% and 12% of accounts receivable, respectively.</p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px">The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits. At September 30, 2019, the Company did not have cash deposits that exceeded the federally insured limit of $250,000. The Company believes that no significant concentration of credit risk exists with respect to its cash balances because of its assessment of the creditworthiness and financial viability of the financial institution.</p></div>
<div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"> <p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">In June 2016, the FASB issued ASU No. 2016-13, <i>Credit Losses - Measurement of Credit Losses on Financial Instruments</i> ("ASC 326"). The standard significantly changes how entities will measure credit losses for most financial assets , including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model , under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2021. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures.</p> <p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p> <p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements. </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="6"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Three Months Ended</b></p></td><td valign="bottom"></td></tr><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30, </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Software</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">123,023</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">58,925</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Service</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">48,261</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">61,906</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total revenue</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">171,284</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">120,831</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><div style="MARGIN: 0px"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="6"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months ended</b></p></td><td valign="bottom"></td></tr><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Software</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">513,813</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">169,310</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Service</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">96,896</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">187,165</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total revenue</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">610,709</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">356,475</p></td><td valign="bottom" width="1%"></td></tr></table></div><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>ended </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019 </b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>ended </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Fair value at beginning of period </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,313,904</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">623,195</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Recognition of derivative liabilities upon initial valuation </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,369,518</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">903,851</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Extinguishment of derivative liabilities </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(1,002,790</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(58,317</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Net change in the fair value of derivative liabilities </p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,302,374</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(628,769</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Fair value at end of period </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,983,006</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">839,960</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>December 31,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Secured </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(a) DART, in default </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">542,588</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">542,588</p></td><td valign="bottom" width="1%"></td></tr><tr bgcolor="#ffffff"><td></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><u>Unsecured </u></p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(b) Convertible notes with fixed conversion features, in default</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">895,512</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">895,512</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(c) Convertible notes with adjustable conversion features</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">812,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">695,000</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total convertible notes principal outstanding</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,250,100</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,133,100</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Debt discount</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(466,076</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(521,763</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Convertible notes, net of discount</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,784,024</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,611,337</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>December 31,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Unsecured</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(a) Promissory notes-in default </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">413,824</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">413,824</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(b) Promissory notes – StrikeForce Investor Group-in default</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,225,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,225,000</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">(c) Promissory notes issued by BlockSafe ($475,000 and zero in default at September 30, 2019 and December 31, 2018, respectively) </p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">475,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">775,500</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total notes payable principal outstanding</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,113,824</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,414,324</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Debt discount</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(- </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(195,654</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Notes payable, net of discount</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,113,824</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,218,670</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>January 2019 to September 2019</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>(dates of inception)</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>December 31, </b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2018</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Conversion feature:</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Risk-free interest rate</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.23</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.18%-0.25</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.25</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Expected volatility</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">170</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">118%-163</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">129</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Expected life (in years)</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1 year</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1 year</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1 year</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Expected dividend yield</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td></tr><tr bgcolor="#cceeff"><td></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Fair Value:</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 11.25pt;Font:10pt Times New Roman;padding:0px" align="justify">Conversion feature</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">2,983,006</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,369,518</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1,313,904</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Nine months</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>ended</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><u>Lease Cost</u></p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Operating lease cost (included in general and administration in the Company’s unaudited condensed statement of operations)</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">37,456</p></td><td valign="bottom" width="1%"></td></tr><tr bgcolor="#ffffff"><td></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><u>Other Information</u></p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Cash paid for amounts included in the measurement of lease liabilities for the three quarters ended September 30, 2019</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">39,685</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Weighted average remaining lease term – operating leases (in years)</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">4.3</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Average discount rate – operating leases</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.0</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">%</p></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>At</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>September 30,</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>2019</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><u>Operating leases</u></p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%" colspan="2"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Long-term right-of-use assets</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">190,600</p></td><td valign="bottom" width="1%"></td></tr><tr bgcolor="#ffffff"><td></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="9%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Short-term operating lease liabilities</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">26,618</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Long-term operating lease liabilities</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">166,164</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Total operating lease liabilities</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">192,782</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"><b>Year Ending</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Operating Leases</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2019 (remaining 3 months)</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">13,205</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2020</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">54,371</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2021</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">56,000</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2022</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">57,676</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2023</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">59,411</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">2024</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">4,963</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 10pt;Font:10pt Times New Roman;padding:0px" align="justify">Total lease payments</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">245,626</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px 0px 0px 10pt;Font:10pt Times New Roman;padding:0px" align="justify">Less: Imputed interest/present value discount</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">(52,844</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">)</p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px 0px 0px 20pt;Font:10pt Times New Roman;padding:0px" align="justify">Present value of lease liabilities</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">192,782</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Number of</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Options Shares</b> </p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Exercise Price Range</b></p><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Per Share</b> </p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Weighted Average Exercise Price</b> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Balance, January 1, 2019</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,500,002</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057-2,242,500</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom" width="1%"></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Granted</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Exercised</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Expired</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">-</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Balance outstanding, September 30, 2019</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,500,002</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057-2,242,500</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="top"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">Balance exercisable, September 30, 2019</p></td><td valign="bottom" width="1%"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,486,303</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057-2,242,500</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom" width="1%"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
<div style="font: 10pt TIMES NEW ROMAN; text-align: justify;"><table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"><tr><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="10"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Options Outstanding</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="10"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Options Exercisable</b></p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td></tr><tr><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Range of Exercise Prices</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Number Outstanding</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Average Remaining Contractual Life (in years)</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Weighted Average Exercise Price</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Number Exercisable</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Average Remaining Contractual Life (in years)</b></p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom" colspan="2"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="center"><b>Weighted Average Exercise Price</b></p></td><td valign="bottom"></td></tr><tr><td colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom" colspan="2"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td width="9%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">975,000,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1.00</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">975,000,000</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1.00</p></td><td valign="bottom" width="1%"></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom" width="7%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">975,000,000</p></td><td valign="bottom" width="1%"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">63,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">63,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0057</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.016</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">500,001</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.016</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">500,001</p></td><td valign="bottom"></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">1.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.016</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#ffffff"><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.00625</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">196,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">196,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 1px solid" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td></tr><tr bgcolor="#cceeff"><td style="BORDER-BOTTOM: 3px double"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="top"><p style="margin:0px 0px 0px 8.9pt;Font:10pt Times New Roman;padding:0px" align="right">0.00625 - 975,000,000</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,500,002</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">259,500,002</p></td><td valign="bottom"></td><td valign="bottom"></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">10.00</p></td><td valign="bottom"></td><td valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify"> </p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="justify">$</p></td><td style="BORDER-BOTTOM: 3px double" valign="bottom"><p style="margin:0px;Font:10pt Times New Roman;padding:0px" align="right">0.0062</p></td><td valign="bottom"></td></tr></table><p style="margin:0px;Font:10pt Times New Roman;padding:0px"> </p></div>
169310
513813
58925
123023
48261
187165
96896
61906
1313904
623195
1369518
903851
-1002790
-58317
1302374
-628769
2983006
839960
-16364740
214272
214272
259000002
259500002
3551924
250000
86000
188600
0.63
0.57
0.23
0.20
0.16
0.43
0.68
0.12
0.29
0.12
24036508
2743297
233091594
40858491
At September 30, 2019 and December 31, 2018, $542,588 of notes payables are due to DART/Citco Global. The notes are convertible into shares of the Company's common stock based on adjustable conversion prices, are secured by all of the Company's assets, were due in 2010, and are currently in default. Beginning in 2009, the note holder agreed to the forbearance of any further interest on the notes payable to DART/Citco Global.
542588
At September 30, 2019 and December 31, 2018, $542,588 of notes payables are due to DART/Citco Global. The notes are convertible into shares of the Company's common stock based on adjustable conversion prices, are secured by all of the Company's assets, were due in 2010, and are currently in default. Beginning in 2009, the note holder agreed to the forbearance of any further interest on the notes payable to DART/Citco Global.
542588
At September 30, 2019 and December 31, 2018, $542,588 of notes payables are due to DART/Citco Global. The notes are convertible into shares of the Company's common stock based on adjustable conversion prices, are secured by all of the Company's assets, were due in 2010, and are currently in default. Beginning in 2009, the note holder agreed to the forbearance of any further interest on the notes payable to DART/Citco Global.
895512
At September 30, 2019 and December 31, 2018, convertible notes payable with fixed conversion features ("fixed convertible notes") consisted of 13 unsecured convertible notes convertible at a fixed amount into 13 shares of the Company's common stock, at fixed conversion prices ranging from $1,950,000 to $9,750,000,000 per share, as defined in the agreements and adjusted for applicable reverse stock splits. The notes are unsecured, bear interest at 8% to 18% per annum, were due on various dates from March 2008 to March 2015, and are currently in default. At December 31, 2018, the balance of the accrued interest on the fixed convertible notes was $1,079,764. During the nine months ended September 30, 2019, interest of $56,195 was accrued. At September 30, 2019, the balance of accrued interest on the fixed convertible notes was $1,135,959.
895512
At September 30, 2019 and December 31, 2018, convertible notes payable with fixed conversion features ("fixed convertible notes") consisted of 13 unsecured convertible notes convertible at a fixed amount into 13 shares of the Company's common stock, at fixed conversion prices ranging from $1,950,000 to $9,750,000,000 per share, as defined in the agreements and adjusted for applicable reverse stock splits. The notes are unsecured, bear interest at 8% to 18% per annum, were due on various dates from March 2008 to March 2015, and are currently in default. At December 31, 2018, the balance of the accrued interest on the fixed convertible notes was $1,079,764. During the nine months ended September 30, 2019, interest of $56,195 was accrued. At September 30, 2019, the balance of accrued interest on the fixed convertible notes was $1,135,959.
695000
At December 31, 2018, there were $695,000 of convertible notes with adjustable conversion features outstanding. During the nine months ended September 30, 2019, convertible notes for $792,000 were issued (see below), and convertible notes for $675,000 were converted into shares of the Company's common stock. At September 30, 2019, the balance of the convertible notes with adjustable conversion features was $812,000.
812000
At December 31, 2018, there were $695,000 of convertible notes with adjustable conversion features outstanding. During the nine months ended September 30, 2019, convertible notes for $792,000 were issued (see below), and convertible notes for $675,000 were converted into shares of the Company's common stock. At September 30, 2019, the balance of the convertible notes with adjustable conversion features was $812,000.
2133100
2250100
1099005
1168327
69322
44107
355500
355500
563805
617659
53854
2019-12-31
57000
30000
interest at prime plus 2% and prime plus 4% per annum
compounded interest rate of 8% per annum
compounded interest rate of 8% per annum
33000
7312500
9750000000
322500
268000
Notes payable, with interest from 8% to 14% per annum, due on various dates from December 2011 to July 2017 and are currently in default. At December 31, 2018, the balance of the accrued interest on the notes payable-various was $505,454. During the nine months ended September 30, 2019, $34,073 of interest was accrued. At September 30, 2019, accrued interest on the notes payable-various was $539,527.
413824
Notes payable to StrikeForce Investor Group (SIG), made up of various investors with unsecured notes, interest at 10% per annum, originally due in 2011, and currently in default. At December 31, 2018, the balance of the accrued interest on the notes payable-SIG was $1,509,844. During the nine months ended September 30, 2019, $91,623 of interest was accrued. At September 30, 2019, accrued interest on the notes payable-SIG was $1,601,467.
413824
Notes payable to StrikeForce Investor Group (SIG), made up of various investors with unsecured notes, interest at 10% per annum, originally due in 2011, and currently in default. At December 31, 2018, the balance of the accrued interest on the notes payable-SIG was $1,509,844. During the nine months ended September 30, 2019, $91,623 of interest was accrued. At September 30, 2019, accrued interest on the notes payable-SIG was $1,601,467.
1225000
At December 31, 2018, BlockSafe (see Note 1) had $775,500 of outstanding unsecured promissory notes, bearing interest at 8% per annum, and maturing through September 2019, and currently in default. During the nine months ended September 30, 2019, $5,000 of unsecured promissory notes were paid, and note holders agreed to exchange $295,500 of principal into a financing obligation (see Note 4). At September 30, 2019, the balance of the unsecured promissory notes was $475,000.
1225000
At December 31, 2018, BlockSafe (see Note 1) had $775,500 of outstanding unsecured promissory notes, bearing interest at 8% per annum, and maturing through September 2019, and currently in default. During the nine months ended September 30, 2019, $5,000 of unsecured promissory notes were paid, and note holders agreed to exchange $295,500 of principal into a financing obligation (see Note 4). At September 30, 2019, the balance of the unsecured promissory notes was $475,000.
775500
475000
2414324
2113824
-195654
2113824
2061686
2202363
140677
99478
0.1
0
2019-12-31
742513
742513
703944
745802
41945
825500
775500
1263200
50000
295500
122500
At September 30, 2019, as the tokens do not exist yet, and were not considered equity, management determined that 100% of the obligation of $1,263,200 is probable of being a liability to be settled by BlockSafe, through the issuance of tokens, or through other means if tokens are never issued, and therefore recorded the financing obligation.
19700
1500000
1500000
1500000
In exchange, the Funders are entitled to receive, after the payment of legal fees, the first $1,500,000 from the gross proceeds of any claims awarded, 10% of any additional claim proceeds until the Funders have received an additional $7,500,000, and 2.5% of any claim proceeds thereafter. The Funders shall be paid only in the event that the Company achieves recoveries of claim proceeds
0.0023
0.0025
0.0025
0.0018
1.7
1.29
1.63
1.18
P1Y0M0D
P1Y0M0D
P1Y0M0D
1369518
1313904
2983006
The Company had convertible promissory notes outstanding that are convertible into shares of common stock of the Company at the option of the holders at price per share discounts ranging from 20% to 61% of the Company&#8217;s common stock market price, as defined in the note agreements.
2983006
1313904
1369518
37456
39685
P4Y3M19D
0.1
26618
166164
192782
13205
54371
56000
57676
59411
4963
245626
-52844
192782
4409
P4Y3M29D
37456
38384
Payments increasing 3% each year, and ending on January 31, 2024
37906356
22500
112
675000
44470
392380265
1488296
0.00099
0.0087
259500002
259500002
259486303
0.0062
0.0062
0.0062
2242500
2242500
2242500
0.0057
0.0057
0.0057
1
63000000
500001
196000000
259500002
P1Y
P10Y
P1Y
P10Y
P10Y
975000000
0.0057
0.016
0.0062
0.0062
1
63000000
500001
196000000
25900002
P1Y
P10Y
P1Y
P10Y
P10Y
0.00625
975000000
975000000
0.0057
0.016
0.0062
0.0062
500001
259000000
December 2027
356143
2017
0.016
0.00625
P6M
P12M
Sept. 30, 2020
Sept. 30, 2021
9000000
10000000
162
350628
11000000
Sept. 30, 2022
0.15
0.20
125000
125000
70000
5672
79828798
0.15
0.31
0.1
The note is convertible at a 62% discount to the price of the Company’s common stock, as defined
0.62
April 2020
August 2020
0.0009
0.001