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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 1 – NATURE OF OPERATIONS,
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Company Overview</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Premier Holding Corporation
(“we”, “us”, “our”, or the “Company”) is an energy services holding company. The
Company provides an array of energy services through its subsidiary companies, E3 and TPC. We provide solutions that enable customers
to reduce their energy consumption, lower their operating and maintenance costs, and realize environmental benefits. The Company’s
comprehensive set of services includes competitive electricity plans and upgrades to a facility’s energy infrastructure.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company was incorporated
in Nevada on October 18, 1971 under the name of Mr. Nevada, Inc., and following the completion of a limited public offering in
April 1972, it commenced limited operations which were discontinued in 1990. Thereafter and through 2012, the Company reorganized
as a holding company that provides financial and management expertise, which includes access to capital, financing, legal, insurance,
mergers, acquisitions, joint ventures and management strategies to our subsidiaries. Its common stock is quoted on the OTC Markets
Group Inc., QB tier (“OTCQB”), under the symbol “PRHL”.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In August of 2012,
the Company acquired a unique marquee technology for energy efficient lighting, the E-Series controller developed by Active ES.
This patented technology provides an upgrade for existing HID lamps for high-bay indoor and outdoor applications. In the fourth
quarter of 2012, the Company performed additional research and development to the products from Active ES adding two new products
for mass production, the 480-volt version of the controller, suitable for ports and other large facilities, and a 240-volt version
of the LiteOwl for Streetlights, vastly increasing the applicable market.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the first quarter
of 2013, we acquired an 80% stake in TPC, a deregulated power broker in Illinois. The clients of TPC have commercial/industrial
facilities such as small businesses, warehouses and distribution centers, which are candidates for E3’s products and services.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the period covered
by this report and prior to the transaction described below under the Share Exchange Agreement, we provided an array of energy
services through E3 and TPC. The Company provides solutions that enable customers to reduce their energy consumption, lower their
operating and maintenance costs, and realize environmental benefits. Our comprehensive set of services includes competitive electricity
plans and upgrades to a facility’s energy infrastructure.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to organic
growth, we expect that strategic acquisitions of complementary businesses and assets will remain an important part of our growth
plan to enable us to broaden our service offerings and expand our geographical reach.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 6, 2016, the
Company entered into a definitive agreement with WWCD, LLC, a company incorporated in the State of Illinois (“WWCD”),
to acquire for $125,000 all membership units, including all licenses and contracts held, of American Illuminating Company, LLC,
a Connecticut limited liability company (“AIC”), a company owned by WWCD. AIC is a FERC-licensed supplier of deregulated
energy. Consummation of the acquisition of AIC is subject to FERC approval, which was granted in February 2017. After final notifications
and filings with regulatory agencies are complete, AIC is expected to begin supplying power immediately to the Company’s
customers, will recruit additional resellers of deregulated power and provide them with its sales tools to streamline sales efforts,
enforce compliance, and increase productivity. The Company has reflected the $125,000 payment as an intangible asset on the balance
sheet as of March 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 12, 2018,
the Company’s Board of Directors (the “Board”) approved a Membership Interest Exchange and Contribution Agreement,
as amended, (the “Share Exchange Agreement”) by and among the Company, the Company’s wholly-owned subsidiaries
The Power Company, an Illinois limited liability corporation (“TPC”) and American Illuminating Company, a Connecticut
limited liability corporation (“AIC”), and AOTS 42 (“AOTS”), a Delaware corporation. The Share Exchange
Agreement was subsequently executed on March 23, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the terms of
the Share Exchange Agreement, among other things, the Company will contribute all of its membership interests of its wholly-owned
subsidiaries TPC and AIC to AOTS, in exchange for 19,250,000 AOTS common stock shares, $0.0001 par value per share, representing
approximately 39.65% of the 48,550,000 issued and outstanding common shares of AOTS on a fully-diluted basis, after giving effect
to such issuance (the “Purchased Shares”). Performance of the Share Exchange Agreement is subject to customary regulatory
approvals for a transaction of this type, as well as certain other closing conditions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will not
be retaining ownership of any of the 19,250,000 AOTS shares it receives as a result of the Share Exchange Agreement. Instead, the
Company’s Board of Directors has approved the distribution of these AOTS shares to the Company’s common shareholders
upon consummation of the Share Exchange Agreement. Accordingly, on March 27th, 2018, the Board authorized the Company to make a
pro rata stock distribution to its common shareholders of the 19,250,000 AOTS common shares received by the Company pursuant to
the AOTS Share Exchange Agreement (the “AOTS Share Distribution”). Pursuant to the AOTS Share Distribution, holders
of Company common stock will receive a certain amount of shares of AOTS common stock for each share of Company Common Stock held
at the close of business on a record date to be determined by the Board as the record date for the AOTS Stock Dividend (the “Distribution
Record Date”), at a ratio to be determined by the Board (the “AOTS Share Distribution Ratio”). Consummation of
the AOTS Share Exchange Agreement, including the consummation of the contribution of the TPC membership interests to AOTS, is a
condition to the AOTS Share Distribution. Any such distribution of AOTS shares to Premier shareholders will result in Premier shareholders
holding restricted stock in a private company, and such shares will accordingly not be freely transferrable absent, among others,
registration with the SEC, or an exemption from registration.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Share Exchange
Agreement the Company entered into with AOTS is part of a series of recent transactions by AOTS involving the acquisition of certain
assets from various entities in exchange for AOTS common stock (the “AOTS Transactions”). The AOTS Transactions consist
of : (1) The Company’s contribution of its wholly-owned TPC and AIC subsidiaries pursuant to the Share Exchange Agreement,
(2) A Membership Interest Exchange and Contribution Agreement dated March 16, 2018 between AOTS and Rescom Energy, L.L.C., a Connecticut
limited liability company (“Rescom”), as amended, (the “Rescom Agreement”), whereby 100% of Rescom’s
membership interests were contributed to AOTS in exchange for 10,000,000 AOTS common shares; (3) A Share Exchange Agreement dated
March 23, 2018 between AOTS and Advanced E Lighting, L.L.C., a Connecticut limited liability company (“Advanced”),
as amended, (the “Advanced Agreement”) whereby 100% of Advanced’s membership interests were contributed to AOTS
in exchange for 6,000,000 AOTS common shares; and (4) A Membership Interest Exchange and Contribution Agreement dated March 23,
2018 between AOTS and TPC Management Co., L.L.C., an Illinois limited company (TPCM”), as amended, (the “TPCM Agreement”)
whereby TPCM contributed certain intellectual property relating to an online client energy portal (the “Intellectual Property”)
to AOTS in exchange for 6,000,000 common shares of AOTS.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Basis of Presentation</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The condensed consolidated
financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management,
all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial
position and results of operations for the periods presented have been made. The results for interim periods are not necessarily
indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with
the financial statements of the Company for the year ended December 31, 2017 (including the notes thereto) set forth on Form 10-K.
The Company uses as guidance Accounting Standard Codification (ASC) as established by the Financial Accounting Standards Board
(FASB).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Significant Accounting Policies</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For reference to a
complete list of significant accounting policies, these financial statements should be read in conjunction with the financial statements
of the Company for the year ended December 31, 2017 (including the notes thereto) set forth on Form 10-K.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">In
January 2017, the FASB issued Accounting Standards Update No. 2017-04, “Intangibles—Goodwill and Other (Topic 350):
Simplifying the Test for Goodwill Impairment”. Under the amendments, an entity should perform its annual or interim goodwill
impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment
charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should
not exceed the total amount of goodwill allocated to that reporting unit. The FASB also eliminated the requirements for any reporting
unit with a zero or negative carrying amount to perform a qualitative assessment, and if it fails that qualitative test, to perform
Step 2 of the goodwill impairment test. The same impairment test will therefore apply to all reporting units, and an entity will
be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net
assets. SEC filers are required to adopt the new standard for annual or any interim goodwill impairment tests in fiscal years beginning
after Dec. 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates on
or after Jan. 1, 2017. The Company elected to early adopt this new standard effective September 30, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended March 31, 2018, there were several other new accounting pronouncements issued by the Financial Accounting Standards Board.
Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption
of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial
statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Company Overview</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Premier Holding Corporation
(“we”, “us”, “our”, or the “Company”) is an energy services holding company. The
Company provides an array of energy services through its subsidiary companies, E3 and TPC. We provide solutions that enable customers
to reduce their energy consumption, lower their operating and maintenance costs, and realize environmental benefits. The Company’s
comprehensive set of services includes competitive electricity plans and upgrades to a facility’s energy infrastructure.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company was incorporated
in Nevada on October 18, 1971 under the name of Mr. Nevada, Inc., and following the completion of a limited public offering in
April 1972, it commenced limited operations which were discontinued in 1990. Thereafter and through 2012, the Company reorganized
as a holding company that provides financial and management expertise, which includes access to capital, financing, legal, insurance,
mergers, acquisitions, joint ventures and management strategies to our subsidiaries. Its common stock is quoted on the OTC Markets
Group Inc., QB tier (“OTCQB”), under the symbol “PRHL”.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In August of 2012,
the Company acquired a unique marquee technology for energy efficient lighting, the E-Series controller developed by Active ES.
This patented technology provides an upgrade for existing HID lamps for high-bay indoor and outdoor applications. In the fourth
quarter of 2012, the Company performed additional research and development to the products from Active ES adding two new products
for mass production, the 480-volt version of the controller, suitable for ports and other large facilities, and a 240-volt version
of the LiteOwl for Streetlights, vastly increasing the applicable market.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the first quarter
of 2013, we acquired an 80% stake in TPC, a deregulated power broker in Illinois. The clients of TPC have commercial/industrial
facilities such as small businesses, warehouses and distribution centers, which are candidates for E3’s products and services.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the period covered
by this report and prior to the transaction described below under the Share Exchange Agreement, we provided an array of energy
services through E3 and TPC. The Company provides solutions that enable customers to reduce their energy consumption, lower their
operating and maintenance costs, and realize environmental benefits. Our comprehensive set of services includes competitive electricity
plans and upgrades to a facility’s energy infrastructure.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to organic
growth, we expect that strategic acquisitions of complementary businesses and assets will remain an important part of our growth
plan to enable us to broaden our service offerings and expand our geographical reach.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 6, 2016, the
Company entered into a definitive agreement with WWCD, LLC, a company incorporated in the State of Illinois (“WWCD”),
to acquire for $125,000 all membership units, including all licenses and contracts held, of American Illuminating Company, LLC,
a Connecticut limited liability company (“AIC”), a company owned by WWCD. AIC is a FERC-licensed supplier of deregulated
energy. Consummation of the acquisition of AIC is subject to FERC approval, which was granted in February 2017. After final notifications
and filings with regulatory agencies are complete, AIC is expected to begin supplying power immediately to the Company’s
customers, will recruit additional resellers of deregulated power and provide them with its sales tools to streamline sales efforts,
enforce compliance, and increase productivity. The Company has reflected the $125,000 payment as an intangible asset on the balance
sheet as of March 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 12, 2018,
the Company’s Board of Directors (the “Board”) approved a Membership Interest Exchange and Contribution Agreement,
as amended, (the “Share Exchange Agreement”) by and among the Company, the Company’s wholly-owned subsidiaries
The Power Company, an Illinois limited liability corporation (“TPC”) and American Illuminating Company, a Connecticut
limited liability corporation (“AIC”), and AOTS 42 (“AOTS”), a Delaware corporation. The Share Exchange
Agreement was subsequently executed on March 23, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the terms of
the Share Exchange Agreement, among other things, the Company will contribute all of its membership interests of its wholly-owned
subsidiaries TPC and AIC to AOTS, in exchange for 19,250,000 AOTS common stock shares, $0.0001 par value per share, representing
approximately 39.65% of the 48,550,000 issued and outstanding common shares of AOTS on a fully-diluted basis, after giving effect
to such issuance (the “Purchased Shares”). Performance of the Share Exchange Agreement is subject to customary regulatory
approvals for a transaction of this type, as well as certain other closing conditions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will not
be retaining ownership of any of the 19,250,000 AOTS shares it receives as a result of the Share Exchange Agreement. Instead, the
Company’s Board of Directors has approved the distribution of these AOTS shares to the Company’s common shareholders
upon consummation of the Share Exchange Agreement. Accordingly, on March 27th, 2018, the Board authorized the Company to make a
pro rata stock distribution to its common shareholders of the 19,250,000 AOTS common shares received by the Company pursuant to
the AOTS Share Exchange Agreement (the “AOTS Share Distribution”). Pursuant to the AOTS Share Distribution, holders
of Company common stock will receive a certain amount of shares of AOTS common stock for each share of Company Common Stock held
at the close of business on a record date to be determined by the Board as the record date for the AOTS Stock Dividend (the “Distribution
Record Date”), at a ratio to be determined by the Board (the “AOTS Share Distribution Ratio”). Consummation of
the AOTS Share Exchange Agreement, including the consummation of the contribution of the TPC membership interests to AOTS, is a
condition to the AOTS Share Distribution. Any such distribution of AOTS shares to Premier shareholders will result in Premier shareholders
holding restricted stock in a private company, and such shares will accordingly not be freely transferrable absent, among others,
registration with the SEC, or an exemption from registration.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Share Exchange
Agreement the Company entered into with AOTS is part of a series of recent transactions by AOTS involving the acquisition of certain
assets from various entities in exchange for AOTS common stock (the “AOTS Transactions”). The AOTS Transactions consist
of : (1) The Company’s contribution of its wholly-owned TPC and AIC subsidiaries pursuant to the Share Exchange Agreement,
(2) A Membership Interest Exchange and Contribution Agreement dated March 16, 2018 between AOTS and Rescom Energy, L.L.C., a Connecticut
limited liability company (“Rescom”), as amended, (the “Rescom Agreement”), whereby 100% of Rescom’s
membership interests were contributed to AOTS in exchange for 10,000,000 AOTS common shares; (3) A Share Exchange Agreement dated
March 23, 2018 between AOTS and Advanced E Lighting, L.L.C., a Connecticut limited liability company (“Advanced”),
as amended, (the “Advanced Agreement”) whereby 100% of Advanced’s membership interests were contributed to AOTS
in exchange for 6,000,000 AOTS common shares; and (4) A Membership Interest Exchange and Contribution Agreement dated March 23,
2018 between AOTS and TPC Management Co., L.L.C., an Illinois limited company (TPCM”), as amended, (the “TPCM Agreement”)
whereby TPCM contributed certain intellectual property relating to an online client energy portal (the “Intellectual Property”)
to AOTS in exchange for 6,000,000 common shares of AOTS.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2 – GOING CONCERN AND MANAGEMENT’S
LIQUIDITY PLANS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2018,
the Company had an accumulated deficit of approximately $42 million. For the three months ended March 31, 2018 and 2017, the Company
incurred operating losses of $1,448,714 and $3,656,530, respectively, and used cash in operating activities of $691,044 and $1,127,290,
respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company
recognizes it will need to raise additional capital in order to fund operations, meet its payment obligations and execute its business
plan. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing
on terms acceptable to the Company and whether the Company will generate revenues, become profitable and generate positive operating
cash flow. If the Company is unable to raise sufficient additional funds on favorable terms, it will have to develop and implement
a plan to further extend payables and to raise capital through the issuance of debt or equity which may be on less favorable terms,
until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be
successful. If the Company is unable to obtain financing on a timely basis, the Company could be forced to sell its assets, discontinue
its operations and/or pursue other strategic avenues to commercialize its technology.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accordingly, the accompanying
condensed consolidated financial statements have been prepared in conformity with U.S. GAAP for interim financial statements, which
contemplates continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in
the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements
do not necessarily represent realizable or settlement values. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 3 – ACQUISITIONS & GOODWILL</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table presents details of
the Company’s goodwill as of March 31, 2018 and December 31, 2017:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">The Power Company <br />USA, LLC</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 63%">Balances at January 1, 2017:</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">4,000,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Aggregate goodwill acquired</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 1pt">Impairment losses</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(4,000,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Balances at December 31, 2017:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left">Aggregate goodwill acquired</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Impairment losses</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt">Balances at March 31, 2018:</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>The Power Company USA, LLC Share Exchange</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 28, 2013,
the Company acquired 80% of the outstanding membership units of TPC, a deregulated power broker in Illinois for thirty million
30,000,000 shares of Premier’s common stock valued at $4,500,000. The total purchase price for TPC was allocated as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 63%; padding-bottom: 1pt">Goodwill</td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 13%; border-bottom: Black 1pt solid; text-align: right">4,500,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt">Total assets acquired</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">4,500,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left">The purchase price consists of the following:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Common Stock</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,500,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt">Total purchase price</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,500,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The total amount of
goodwill that is expected to be deductible for tax purposes is $4,500,000 and is amortized over 15 years. The total amortization
expense for tax purposes for the three months ended March 31, 2018 is $75,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">The
Company periodically reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine
whether impairment may exist. Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur,
for impairment using fair value measurement techniques. These events could include a significant change in the business climate,
legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or
other factors. Specifically, a goodwill impairment test is used to identify potential impairment by comparing the fair value of
a reporting unit with its carrying amount, including goodwill. The Company uses level 3 inputs and a discounted cash flow methodology,
along to estimate the fair value of a reporting unit. A discounted cash flow analysis requires one to make various judgmental assumptions
including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth
rates are based on the Company’s budget and long-term plans. Discount rate assumptions are based on an assessment of the
risk inherent in the respective reporting units.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">The
Company used a blend of the discounted cash flow method and the guideline company transactions method for the impairment testing
as of September 30, 2017. The Company performed discounted cash flow analysis projected over 5 years to estimate the fair value
of the reporting unit, using management’s best judgement as to revenue growth rates and expense projections. This analysis
indicated cash flows (and discounted cash flows) less than the $4 million book value of goodwill. This analysis factored the recent
reduction in residential revenue at TPC, which was due primarily to the sales agent attrition of approximately 25% of the door-to-door
sales force. The average number of agents in the field fell from 80 in September of 2016 to 60 in September 2017. The drop in the
number of agents was due primarily to an outside sales organization who recruited these agents. Since then, TPC has settled a suit
that TPC initiated against this firm in which, along with a monetary penalty, the firm agreed to not solicit TPC agents in the
future. TPC is actively recruiting to replace this sales force. Also, sales were impacted due to the transitioning of resources
to call center and online residential sales in preparation for transitioning to selling our own alternative supplier. The Company
determined these were indicators of impairment in goodwill for TPC during the year ended December 31, 2017 and impaired the goodwill
by $4,000,000.</p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">The Power Company <br />USA, LLC</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 63%">Balances at January 1, 2017:</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">4,000,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Aggregate goodwill acquired</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 1pt">Impairment losses</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(4,000,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Balances at December 31, 2017:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left">Aggregate goodwill acquired</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Impairment losses</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt">Balances at March 31, 2018:</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 63%; padding-bottom: 1pt">Goodwill</td><td style="width: 2%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 13%; border-bottom: Black 1pt solid; text-align: right">4,500,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt">Total assets acquired</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">4,500,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left">The purchase price consists of the following:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Common Stock</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,500,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt">Total purchase price</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,500,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 4 – CONVERTIBLE NOTES PAYABLE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Between July 15, 2014
and December 21, 2015, the Company entered into convertible notes with third-parties for use as operating capital for a total of
$1,358,500. The convertible notes payable agreements require the Company to repay the principal, together with 10 - 18% annual
interest by the agreements’ expiration dates ranging between July 15, 2019 and August 6, 2020. The notes are secured by assets
of the Company and mature five years from the issuance date and automatically convert into shares of common stock at a conversion
price of 80% of the closing market price on the last day of the month upon which the maturity date falls, unless an election is
made for repayment in cash one year from the contract date. In the event such an election is made, the holders may convert the
note in whole or in part into shares of common stock at a conversion price of 80% of the average closing market price over the
prior 30 days of trading. During the three months ended March 31, 2018, a total of $0 of these notes were converted into shares
of common stock, with a total of $815,000 of these notes remaining as of March 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company analyzed
the conversion option of the notes for derivative accounting consideration under ASC 815-15, Derivatives and Hedging and determined
that the instrument should be classified as a liability once the conversion option becomes effective after one year due to there
being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options for the notes issued
(see Note 5).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Between March 9, 2015
and May 11, 2016, the Company entered into convertible notes with third parties for use as operating capital for a total of $2,074,800.
The convertible notes payable agreements require the Company to repay the principal, together with 12% annual interest by the agreements’
expiration dates ranging between March 9, 2018 and May 11, 2019. The notes are secured by assets of the Company and mature three
years from the issuance date. Six months from the contract date, the holders may elect to convert the note in whole or in part
into shares of common stock at $0.15. Two warrants were issued with each note including (1) a warrant to purchase an amount of
equal to 50% of face value of the note at an exercise price $0.15 for a period of three years following the note issuance date
and (2) a warrant to purchase an amount of equal to 83.33% of face value of the note at an exercise price $0.25 for a period of
three years following the note issuance date. The Company recorded an aggregate debt discount of $686,536 for the fair value of
these warrants through March 31, 2018, which is being amortized over the term of the notes, and is included in convertible notes
on the Company’s balance sheet at an unamortized remaining balance of $32,131. The total debt discount recorded during the
three months ended March 31, 2018 and 2017 was $0 and $0, respectively. Interest expense related to the amortization of this debt
discount for the three months ended March 31, 2018 and 2017 was $61,701 and $69,357, respectively. During the three months ended
March 31, 2018, a total of $0 of these notes were converted into shares of common stock, with a total of $992,300 of these notes
remaining as of March 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended March 31, 2018, the total of all notes converted was $0. The net balance of all notes as of March 31, 2018 of $1,388,786
reflects total notes of $1,807,300, net of debt discounts of $32,131 related to the warrants and $386,383 related to the derivative
liability (see Note 5).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended March 31, 2018 and 2017, the Company recorded interest expense of $148,827 and $207,273, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 5 – DERIVATIVE LIABILITY</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The embedded conversion
feature in the convertible debt instruments (the “Notes”) that the Company issued beginning in July 2014 (See Note
4), and became convertible beginning in July 2015, qualified it as a derivative instrument since the number of shares issuable
under the note is indeterminate based on guidance under ASC 815, <i>Derivatives and Hedging</i>. The conversion feature of these
convertible promissory notes has been characterized as a derivative liability beginning in July 2015 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="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The valuation of the
derivative liability attached to the convertible debt was determined by management using a binomial pricing model that values the
derivative liability within the notes. Using the results from the model, the Company recorded a derivative liability of $301,000
for the fair value of the convertible feature included in the Company’s convertible debt instruments as of March 31, 2018.
The derivative liability recorded for the convertible feature created a debt discount of $1,438,000, which is being amortized over
the remaining term of the notes using the effective interest rate method and is included in convertible notes on the balance sheet
at March 31, 2018 with an unamortized balance of $386,383. Interest expense related to the amortization of this debt discount for
the three months ended March 31, 2018, was $50,240. Additionally, $0 of debt discount was charged to interest expense during the
three months ended March 31, 2018, representing the amount of debt discount in excess of the convertible debt. A total of $0 of
the debt discount was charged to interest expense during the three months ended March 31, 2018 related to convertible debt converted
during the year.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Key inputs and assumptions
used to value the embedded conversion feature in the month the Notes became convertible were as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 48px; text-align: justify"><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">The average value of a share of Company stock in the month the Notes became convertible, the measurement date - ranging from $0.026 - $0.077 (per the over-the-counter market quotes);</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">The average conversion price of all Notes issued in their month of issuance, with such conversion price determined based on 80% of the average over-the-counter market price for the 30 days preceding the one-year anniversary of all Notes in that month’s pool;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">The number of shares into which Notes in pool would convert - face amount of the Notes in that month’s pool divided by the average conversion price for Notes included in that month’s pool;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-family: Symbol">·</font></td>
<td>Risk free rate - 2.5%;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-family: Symbol">·</font></td>
<td>Dividend yield - 0.0%;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-family: Symbol">·</font></td>
<td>Assumed annual volatility of Company stock ranging from 109.4% – 131.7%; and</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-family: Symbol">·</font></td>
<td>The Company would be unable to repay the notes within their term.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additional key inputs
and assumptions used to value the embedded conversion feature as of March 31, 2018:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 48px; text-align: justify"><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">The value of a share of Company stock on March 31, 2018, the measurement date - $0.0259 (per the over-the-counter market quotes);</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">Conversion price - $0.0211, based on 80% of the average quoted market price for the Company’s common stock for the 30-day period ended March 31, 2018; and</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">Number of shares into which Notes would convert - face value of Notes divided by $0.0211.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
summarizes the derivative liability included in the consolidated balance sheet:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 43%">Derivative liability as of December 31, 2017</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">226,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Change in fair value of derivative liability</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">75,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left">Derivative on new loans</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Reduction due to debt conversions</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt">Derivative liability as of March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">301,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 43%">Derivative liability as of December 31, 2017</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">226,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Change in fair value of derivative liability</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">75,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left">Derivative on new loans</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Reduction due to debt conversions</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt">Derivative liability as of March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">301,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 6 – STOCKHOLDERS’ EQUITY</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Preferred Stock</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 3, 2013, the
Company filed a Certificate of Amendment of Articles of Incorporation with the State of Nevada Secretary of State giving it the
authority to issue 50,000,000 shares of preferred stock with a par value of $0.0001 per share. As of March 31, 2018, there were
200,000 Series A Non-Voting Convertible Stock shares and 250,000 Series B Voting Convertible Preferred Stock shares issued and
outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 31, 2014,
the Board of Directors of the Company approved the creation of a Series A Non-Voting Convertible Preferred Stock (the “Series
A Preferred Stock”). On April 1, 2014, the Company filed a Certificate of Designation for the Company’s Series A Preferred
Stock in Nevada of which the Company is authorized to issue up to 7,000,000 shares with a par value of $0.0001 per share. In general,
each share of Series A Preferred Stock has no voting or dividend rights, a stated value of $1.00 per share (the “Stated Value”),
and is convertible three months after issuance into common stock at the conversion price equal to one-tenth (1/10) of the Stated
Value, or at $0.10 per common share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 11, 2015,
the Board of Directors of the Company approved the creation of the Corporation’s Series B Voting Convertible Preferred Stock
(“Series B Preferred Stock”). On December 16, 2015, the Corporation filed a Certificate of Designation for the Series
B Preferred Stock in Nevada of which the Company is authorized to issue up to 250,000 shares with a par value of $0.0001 per share.
Holders of Series B Preferred Stock shall be entitled to 1,000 votes for each share of Series B Preferred Stock. Votes of shares
of Series B Preferred Stock shall be added to votes of shares of common stock of the Company at any meeting of stockholders of
the Company at which stockholders have the right to vote. Series B Preferred Stock shall have voting rights for a period of three
years from the date of issuance. On the third anniversary of the issuance of shares of Series B Preferred Stock, each share of
Series B Preferred Stock shall be converted into four shares of common stock without further action of the Board of Directors.
Series B Preferred Stock shall have the same dividends per share and, except as provided above, the same powers, designations,
preferences and relative rights, qualifications, limitations or restrictions as those of shares of Series A Preferred Stock of
the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Common Stock</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On
June 22, 2017, the Board of Directors of the Company approved, and recommended to the holders of a majority of the total voting
power of all issued and outstanding voting capital of the Company (the “Majority Stockholders”) that they approve an
increase in the total number of authorized shares of the Company’s common stock from 450,000,000 to 1,400,000,000. On June
23, 2017, the Company received written consent in lieu of a meeting from the Majority Stockholders, amending the Company's Certificate
of Incorporation, as amended, to this increase in authorized shares. The Company filed the amendment with the State of Nevada on
August 14, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended March 31, 2018, the Company entered into a series of stock purchase agreements with accredited investors for the sale of
10,167,000 shares of its common stock in amount of $203,339. Additionally, 11,046,137 shares of common stock were issued for consulting
services valued at prices ranging from $0.028 to $0.030 per share, based upon the fair value of the common stock on the measurement
date totaling $643,619, which was recognized immediately as general and administrative expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless otherwise set
forth above, the securities described above were not registered under the Securities Act of 1933, as amended (the “Securities
Act”), or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded
by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder and corresponding provisions of state securities
laws, which exempt transactions by an issuer not involving any public offering.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Options for Common Stock</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">A summary of option activity as of March
31, 2018 is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-left: 10pt; text-indent: -10pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Number</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Outstanding</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Weighted-Average</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Exercise
Price</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Per
Share</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Weighted-Average</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Remaining</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Contractual
Life</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>(Years)</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Aggregate</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Intrinsic</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Value</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-indent: -10pt"> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 52%; padding-left: 10pt; text-indent: -10pt">Outstanding at January 1, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,650,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.04</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">4.53</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt">Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-left: 10pt; text-indent: -10pt">Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Canceled/forfeited/expired</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-left: 10pt; text-indent: -10pt">Outstanding at December 31, 2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,650,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.04</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3.52</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-left: 10pt; text-indent: -10pt">Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt">Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Canceled/forfeited/expired</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; padding-left: 10pt; text-indent: -10pt">Outstanding at March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1,650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">0.04</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">2.78</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">28,080</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt; text-indent: -10pt">Options vested and exercisable at March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1,650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.04</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">2.78</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">28,080</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 30, 2014,
the Board of Directors of the Company approved a new employment agreement with the Company’s Chief Executive Officer, Randy
Letcavage (the “Employment Agreement”). The Employment Agreement has a retroactive effective date of January 1, 2014
and replaces all prior agreements between the Company and Mr. Letcavage. The Employment Agreement provides for an annual base salary
of $240,000, a discretionary bonus of $50,000 over each 12-month period, expense reimbursement, and a grant of stock options for
5,000,000 shares vesting over 2 years at an initial exercise price per share equal to $.0025 per share. Stock options have vested
at the following rate:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 48px"><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">1,000,000 (one million) shares of common stock on the Commencement Date (January 1, 2014);</td></tr>
<tr style="vertical-align: top">
<td><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">1,000,000 (one million) shares of common stock on the sixth (6th) month anniversary of the Commencement Date;</td></tr>
<tr style="vertical-align: top">
<td><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">1,000,000 (one million) shares of common stock on the first anniversary of the Commencement Date;</td></tr>
<tr style="vertical-align: top">
<td><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">1,000,000 (one million) shares of common stock on the 18th month anniversary of the Commencement Date; and</td></tr>
<tr style="vertical-align: top">
<td><font style="font-family: Symbol">·</font></td>
<td style="text-align: justify">1,000,000 (one million) shares of common stock on the second anniversary of the Commencement Date.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the Company
agreed to indemnify Mr. Letcavage to the fullest extent permitted by law for claims related to Mr. Letcavage’s role as an
officer and director of the Company, or its subsidiaries. As of December 31, 2015, $872,316 had been recorded as his stock based
compensation related to the stock options, with $0 unrecognized cost related to the stock options remaining. On October 8, 2015,
Mr. Letcavage exercised 4,000,000 options for common stock at an aggregate price of $10,000, which was paid through the reduction
of accounts payable owed Mr. Letcavage.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 31, 2014,
the Board of Directors of the Company granted 150,000 stock options to each of its three board members with vesting immediately
at an initial exercise price per share equal to $.15 per share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company valued
the options using the Black-Scholes option pricing model with the following assumptions: dividend yield of zero, years to maturity
of between 0.5 and 5 years, risk free rates of between 1.65 and 1.73 percent, and annualized volatility of between 108% and 217%.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Warrants for Common Stock</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">A summary of warrant activity as of March
31, 2018 is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Number</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Outstanding</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Weighted-Average</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Exercise
Price</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Per
Share</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Weighted-Average</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Remaining</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Contractual
Life</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>(Years)</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Aggregate</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Intrinsic</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Value</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 52%">Outstanding at January 1, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">227,271,136</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.089</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1.44</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">78,395,012</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.080</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.76</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt">Canceled/forfeited/expired</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(158,166,661</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0.085</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left">Warrants vested and exercisable at December 31, 2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">147,499,487</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.089</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.50</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">35,184,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.070</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.07</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 1pt">Canceled/forfeited/expired</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,486,666</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0.073</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt">Outstanding at March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">181,196,821</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">0.085</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1.23</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 2.5pt">Warrants vested and exercisable at March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">181,196,821</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.085</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1.23</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended March 31, 2018, the Company issued 35,184,000 warrants included with certain stock purchases from accredited investors, with
exercise prices ranging from $0.07 to $0.10, and expiration dates ranging from 1 to 2 years. There was no expense resulting from
these warrants.</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center; padding-left: 10pt; text-indent: -10pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Number</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Outstanding</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Weighted-Average</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Exercise
Price</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Per
Share</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Weighted-Average</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Remaining</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Contractual
Life</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>(Years)</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Aggregate</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Intrinsic</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Value</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 10pt; text-indent: -10pt"> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 52%; padding-left: 10pt; text-indent: -10pt">Outstanding at January 1, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,650,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.04</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">4.53</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt">Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-left: 10pt; text-indent: -10pt">Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Canceled/forfeited/expired</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-left: 10pt; text-indent: -10pt">Outstanding at December 31, 2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,650,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.04</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3.52</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-left: 10pt; text-indent: -10pt">Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 10pt; text-indent: -10pt">Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Canceled/forfeited/expired</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; padding-left: 10pt; text-indent: -10pt">Outstanding at March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1,650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">0.04</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">2.78</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">28,080</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt; text-indent: -10pt">Options vested and exercisable at March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1,650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.04</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">2.78</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">28,080</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: center"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Number</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Outstanding</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Weighted-Average</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Exercise
Price</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Per
Share</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Weighted-Average</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Remaining</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Contractual
Life</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>(Years)</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Aggregate</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Intrinsic</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 9pt"><b>Value</b></font></p></td><td style="padding-bottom: 1pt"><font style="font-size: 9pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 52%">Outstanding at January 1, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">227,271,136</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.089</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1.44</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">78,395,012</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.080</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.76</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt">Canceled/forfeited/expired</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(158,166,661</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0.085</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left">Warrants vested and exercisable at December 31, 2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">147,499,487</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.089</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.50</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">35,184,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.070</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.07</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 1pt">Canceled/forfeited/expired</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,486,666</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0.073</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt">Outstanding at March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">181,196,821</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">0.085</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1.23</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 2.5pt">Warrants vested and exercisable at March 31, 2018</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">181,196,821</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.085</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">1.23</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 7 – RELATED PARTY TRANSACTIONS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended March 31, 2018 and 2017, Mr. Letcavage (directly or through related entities) earned $79,860 and $79,860, respectively as
compensation for his role as our CEO and CFO. The following tables outline the related parties associated with the Company and
amounts due or receivable for each period indicated.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 33%; border-bottom: black 1pt solid"><b>Name of Related Party</b></td>
<td style="width: 1%"> </td>
<td style="width: 66%; border-bottom: black 1pt solid"><b>Relationship with the Company</b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td>iCapital Advisory</td>
<td> </td>
<td>Consultant company owned by the CEO of the Company</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Jamp Promotion</td>
<td> </td>
<td>Company owned by Patrick Farah, a managing director of TPC</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td>Mason Ventures and Sebo Services</td>
<td> </td>
<td>Companies owned by Shadie Kalkas, a managing director of TPC</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; border-bottom: Black 1pt solid">Amounts due to related parties</td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31,</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>2018</b></p></td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31,</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>2017</b></p></td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 66%; text-align: left">iCapital Advisory – consulting fees</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">109,925</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">110,656</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Jamp Promotion – commissions</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">90,500</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">90,500</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">200,425</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">201,156</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 2.5pt">Related party receivable - Mason Ventures and Sebo Services</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">52,429</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">52,429</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended March 31, 2018, the Company received loans from Mason Ventures of approximately $0 and repaid $0. The loans are unsecured
and non-interest bearing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, we have
also reviewed the facts and circumstance of our relationship with Nexalin Technology and iCapital Advisory, both of which are affiliated
companies of our CEO, and have assessed whether these two companies are variable interest entities (VIEs). Based on the guidance
provided in <i>ASC 810, Consolidation</i>, these two companies are not considered VIEs. The Company is not the primary beneficiary
of Nexalin Technology and iCapital Advisory and, whether those two companies have any income (losses) for the three months ended
March 31, 2018, it would not be absorbed by Premier Holding Corporation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 33%; border-bottom: black 1pt solid"><b>Name of Related Party</b></td>
<td style="width: 1%"> </td>
<td style="width: 66%; border-bottom: black 1pt solid"><b>Relationship with the Company</b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td>iCapital Advisory</td>
<td> </td>
<td>Consultant company owned by the CEO of the Company</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Jamp Promotion</td>
<td> </td>
<td>Company owned by Patrick Farah, a managing director of TPC</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td>Mason Ventures and Sebo Services</td>
<td> </td>
<td>Companies owned by Shadie Kalkas, a managing director of TPC</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; border-bottom: Black 1pt solid">Amounts due to related parties</td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>March 31,</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>2018</b></p></td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31,</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>2017</b></p></td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 66%; text-align: left">iCapital Advisory – consulting fees</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">109,925</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">110,656</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Jamp Promotion – commissions</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">90,500</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">90,500</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">200,425</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">201,156</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 2.5pt">Related party receivable - Mason Ventures and Sebo Services</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">52,429</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">52,429</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 8 – COMMITMENTS AND CONTINGENCIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Operating lease</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the operations
of TPC, the Company leases 4,260 square feet of office space at 1165 N. Clark Street, Chicago, Illinois under a 65-month operating
lease through March 2019. The monthly base rent is approximately $9,415 per month and increases each year during the term of the
lease.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Legal Proceedings</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Securities and Exchange Commission v.
Premier Holding Corporation, et. al. (the “SEC Litigation”).</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SEC Litigation,
set in the U.S. District Court for the Central District of California, alleges that:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.5in"><font style="font-family: Symbol">·</font></td><td style="text-align: justify">Premier is liable for violating Section 17(a) of the Securities Act, Sections 10(b), 13(a), 13(b)(2)(A),
and 13(b)(2)(b) of the Exchange Act, and Rules 10b-5, 13a-1, 13a-11, and 13a-13 thereunder; and</td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.5in"><font style="font-family: Symbol">·</font></td><td style="text-align: justify">Letcavage (our CEO and President) is liable for: (i) violating Securities Act Section 17(a) and
Exchange Act Section 10(b) and Rule 10b-5 thereunder, Exchange Act Sections 13(a) and 13(b)(5) and Rules 13a-14 and 13b2-1 thereunder;
(ii) as a control person under Exchange Act Section 20(a) for Premier’s violations of the Exchange Act; and (iii) under Exchange
Act Section 20(e) and Securities Act Section 15(b) for aiding and abetting Premier’s violations of Securities Act Sections
17(a)(2) and 17(a)(3), Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), and Rules 13a-1, 13a-11, and 13a-13 thereunder.</td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SEC Litigation
seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest thereon, and civil monetary penalties as
to Premier and Letcavage, as well as a penny stock bar and an officer-and-director bar against Mr. Letcavage. The SEC Litigation
is currently in the discovery stage, which ends in March of 2019, and is set for trial in June of 2019. The Company and Mr. Letcavage
are currently vigorously contesting the SEC Litigation. Settlement discussions to date have not been productive. At this time,
an estimate of the outcome of this matter cannot be determined.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Shao Shu Zhang, et al. v. Premier Holding
Corporation, et al.</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 18, 2018, Shao
Shu Zhang and others filed a complaint against the Company and others in the Los Angeles Superior Court. The Company filed a general
denial to the complaint on September 26, 2018. It is currently too early in the litigation to evaluate the likelihood of an unfavorable
outcome or any estimate of the amount or range of potential loss.</p>
4500000
4500000
28080
19250000
30000000
75000
1807300
-4000000
0
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Significant Accounting Policies</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For reference to a
complete list of significant accounting policies, these financial statements should be read in conjunction with the financial statements
of the Company for the year ended December 31, 2017 (including the notes thereto) set forth on Form 10-K.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">In
January 2017, the FASB issued Accounting Standards Update No. 2017-04, “Intangibles—Goodwill and Other (Topic 350):
Simplifying the Test for Goodwill Impairment”. Under the amendments, an entity should perform its annual or interim goodwill
impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment
charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should
not exceed the total amount of goodwill allocated to that reporting unit. The FASB also eliminated the requirements for any reporting
unit with a zero or negative carrying amount to perform a qualitative assessment, and if it fails that qualitative test, to perform
Step 2 of the goodwill impairment test. The same impairment test will therefore apply to all reporting units, and an entity will
be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net
assets. SEC filers are required to adopt the new standard for annual or any interim goodwill impairment tests in fiscal years beginning
after Dec. 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates on
or after Jan. 1, 2017. The Company elected to early adopt this new standard effective September 30, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended March 31, 2018, there were several other new accounting pronouncements issued by the Financial Accounting Standards Board.
Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption
of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial
statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Basis of Presentation</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The condensed consolidated
financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management,
all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial
position and results of operations for the periods presented have been made. The results for interim periods are not necessarily
indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with
the financial statements of the Company for the year ended December 31, 2017 (including the notes thereto) set forth on Form 10-K.
The Company uses as guidance Accounting Standard Codification (ASC) as established by the Financial Accounting Standards Board
(FASB).</p>
52429
52429
40588176
41433013
4310195
1953981
1358500
2074800
147499487
181196821
false
true
665481829
000-53824
false
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 9 – SUBSEQUENT EVENTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From April 2018 through
June 2019 the Company entered into a series of stock purchase agreements with accredited investors for the sale of 72,761,983 shares
of its common stock in the aggregate amount of $997,525.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From April 2018 through
June 2019, the Company issued an aggregate of 50,995,002 shares of its common stock for services with an aggregate fair value of
$586,085.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From April 2018 through
June 2019, the Company issued an aggregate of 46,719,997 shares of its common stock for the conversion of convertible notes payable
with an aggregate fair value of $603,300.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 31, 2018,
the Company received $162,500 from a warrant holder for the exercise of warrants at $0.01 per share for 16,250,000 shares of the
Company’s common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On or about April 4, 2019, the Company’s Board of Directors set May 4, 2019 as the record date to
determine which of the Company’s stockholders are eligible to receive the pro rata stock distribution of 19,250,000 shares
of AOTS common stock which the Company received pursuant to the Share Exchange Agreement dated March 23, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p>