10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

or

¨ TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 000-54817

 

DIGITAL LOCATIONS, INC.

 (Exact name of registrant as specified in its charter)

 

Nevada	20-5451302
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3700 State Street, Suite 350, Santa Barbara, California 93105

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (805) 456-7000

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

 The number of shares of registrant’s common stock outstanding, as of August 13, 2019 was 80,605,748. 

DIGITAL LOCATIONS, INC.

INDEX

PART I: FINANCIAL INFORMATION
ITEM 1	FINANCIAL STATEMENTS (Unaudited)	3
	Condensed ConsolidatedBalance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Stockholders’ Deficit	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to CondensedConsolidated Financial Statements	8
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	37
ITEM 4	CONTROLS AND PROCEDURES	37
PART II: OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS	39
ITEM 1A	RISK FACTORS	39
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	39
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	39
ITEM 4	MINE SAFETY DISCLOSURES	39
ITEM 5	OTHER INFORMATION	39
ITEM 6	EXHIBITS	40
SIGNATURES		41

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DIGITAL LOCATIONS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
	June 30, 2019			December 31, 2018
ASSETS	(Unaudited)
Current assets:
Cash	$	37,360		$	56,414
Accounts receivable		17,151			3,434
Prepaid expenses		22,331			5,635
Total current assets		76,842			65,483
Property and equipment, net		3,663			5,193
Intangible assets, net		110,417			122,917
Operating lease right to use		13,163			-
Total assets	$	204,085		$	193,593
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	209,448		$	191,312
Accrued expenses and other current liabilities		6,694			19,132
Accrued interest, notes payable		457,057			342,752
Deferred revenue		27,514			25,718
Operating lease liability, current portion		11,187			-
Derivative liabilities		7,069,101			10,363,105
Convertible note payable, in default		29,500			29,500
Convertible notes payable – related parties ($25,980 in default)		58,600			58,600
Convertible notes payable, net of discount of $388,440 and $341,206, respectively		2,127,020			1,836,964
Total current liabilities		9,996,121			12,867,083
Operating lease liability, long-term portion		1,976			-
Total liabilities		9,998,097			12,867,083
Stockholders’ deficit:
Preferred stock, $0.001 par value; 20,000,000 shares authorized:
Series B, 16,155 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		16			16
Series C, 36,000 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		36			36
Common stock, $0.001 par value; 2,000,000,000 shares authorized, 73,456,860 and 40,750,040 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		73,457			40,750
Additional paid-in capital		25,619,339			25,492,975
Accumulated deficit		(35,486,860	)		(38,207,267	)
Total stockholders’ deficit		(9,794,012	)		(12,673,490	)
Total liabilities and stockholders’ deficit	$	204,085		$	193,593

 See notes to condensed consolidated financial statements

3

DIGITAL LOCATIONS, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Operations

(Unaudited)

 

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenues:
Services income	$	47,566		$	-		$	178,765		$	-
Commissions and fees		39,915			-			39,915			-
Software sales		1,531			-			2,856			-
Total revenues		89,012			-			221,536			-
Operating expenses:
General and administrative		261,580			154,332			605,961			377,391
Depreciation and amortization		7,118			337			14,030			674
Total operating expenses		268,698			154,669			619,991			378,065
Loss from operations		(179,686	)		(154,669	)		(398,455	)		(378,065	)
Other income (expense):
Interest expense		(260,784	)		(261,192	)		(484,510	)		(512,101	)
Gain on change in derivative liabilities		378,026			118,565			3,603,372			2,264,923
Total other income (expense)		117,242			(142,627	)		3,118,862			1,752,822
Income (loss) before income taxes		(62,444	)		(297,296	)		2,720,407			1,374,757
Provision for income taxes		-			-			-			-
Net income (loss)	$	(62,444	)	$	(297,296	)	$	2,720,407		$	1,374,757
Net income (loss) per common share:
Basic	$	(0.00	)	$	(0.01	)	$	0.06		$	0.04
Diluted	$	(0.00	)	$	(0.01	)	$	0.00		$	0.00
Weighted average number of shares outstanding:
Basic		50,774,989			38,776,436			46,084,995			38,776,436
Diluted		50,774,989			38,776,436			3,445,038,856			1,224,872,364

See notes to condensed consolidated financial statements

4

DIGITAL LOCATIONS, INC. AND SUBSIDIARY

Condensed Consolidated Statement of Stockholders’ Deficit

Six Months Ended June 30, 2019 (Unaudited)

	Series A Preferred Stock				Series B Preferred Stock				Series C Preferred Stock				Common Stock				Additional Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, December 31, 2018		-	$	-		16,155	$	16		36,000	$	36		40,750,040	$	40,750	$	25,492,975	$	(38,207,267	)	$	(12,673,490	)
Issuance of common stock for conversion of notes payable and accrued interest payable		-		-		-		-		-		-		32,706,820		32,707		126,364		-			159,071
Net income		-		-		-		-		-		-		-		-		-		2,720,407			2,720,407
Balance, June 30, 2019		-	$	-		16,155	$	16		36,000	$	36		73,456,860	$	73,457	$	25,619,339	$	(35,486,860	)	$	(9,794,012	)

See accompanying notes to condensed consolidated financial statements.

5

DIGITAL LOCATIONS, INC. AND SUBSIDIARY

Condensed Consolidated Statement of Stockholders’ Deficit

Six Months Ended June 30, 2018 (Unaudited)

	Series A Preferred Stock						Series B Preferred Stock				Series C Preferred Stock				Common Stock				Additional Paid-in		Accumulated
	Shares			Amount			Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, December 31, 2017		1,000		$	1			16,155	$	16		-	$	-		38,776,436	$	38,776	$	20,537,950	$	(30,038,453	)	$	(9,461,710	)
Redeem Series A preferred shares		(1,000	)		(1	)		-		-		-		-		-		-		1		-			-
Net income		-			-			-		-		-		-		-		-		-		1,374,757			1,374,757
Balance, June 30, 2018		-		$	-			16,155	$	16		-	$	-		38,776,436	$	38,776	$	20,537,951	$	(28,663,696	)	$	(8,086,953	)

See accompanying notes to condensed consolidated financial statements.

6

DIGITAL LOCATIONS, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income	$	2,720,407		$	1,374,757
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		14,030			674
Amortization of debt discount to interest expense		362,766			425,959
Gain on change in derivative liabilities		(3,603,372	)		(2,264,923	)
Changes in assets and liabilities:
Increase in accounts receivable		(13,717	)		-
Increase in prepaid expenses		(16,696	)		(13,394	)
Increase (decrease) in:
Accounts payable		18,136			11,118
Accrued expenses		(12,438	)		(262	)
Accrued interest, notes payable		118,034			86,141
Deferred revenue		1,796			-
Net cash used in operating activities		(411,054	)		(379,930	)
Cash flows from investing activities		-			-
Cash flows from financing activities:
Proceeds from convertible notes payable		392,000			380,500
Net cash provided by financing activities		392,000			380,500
Net increase (decrease) in cash		(19,054	)		570
Cash, beginning of period		56,414			23,461
Cash, end of period	$	37,360		$	24,031

Supplemental Disclosure:
Cash paid for income taxes	$	-	$	-
Cash paid for interest	$	1,876	$	-

Non-cash financing and investing activities:
Debt discount for derivative liabilities	$	392,000	$	380,500
Common shares issued in conversion of debt	$	159,071	$	-
Redemption of Series A preferred stock	$	-	$	1
Increase in other assets and operating lease liability	$	18,352	$	-

See notes to condensed consolidated financial statements

7

DIGITAL LOCATIONS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

Six Months Ended June 30, 2019

(Unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

Digital Locations, Inc. (the “Company”) was incorporated in the State of Nevada on August 25, 2006 as Zingerang, Inc. On April 2, 2007, the Company changed its name to Carbon Sciences, Inc. and on November 14, 2017, the Company changed its name to Digital Locations, Inc.

On November 30, 2018, the Company entered into an Agreement and Plan of Merger ( the “Merger”) pursuant to which EllisLab, Inc., an S Corporation owned 100% by Rick Ellis that builds software for web professionals and provides related support services, merged with and into EllisLab Corp., a newly-formed subsidiary of the Company.

Basis of Presentation

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three months and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. For further information refer to the financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2018.

Going Concern

The accompanying financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. As of June 30, 2019, our current liabilities exceeded our current assets by $9,919,279 and we had a total stockholders’ deficit of $9,794,012. In addition, prior to the Merger in November 2018, the Company did not generate any revenue, and has reported negative cash flows from operations since inception. The Company currently does not have the cash resources to meet its operating commitments for the next twelve months and expects to have ongoing requirements for capital investment to implement its business plan. These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern for a reasonable period of time.

The ability of the Company to continue as a going concern is dependent upon, among other things, raising additional capital. The Company has obtained operating funds primarily from the issuance of convertible debt. Management believes this funding will continue and will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the development of the recently acquired EllisLab business. There can be no assurance, however, that the Company will be successful in accomplishing its objectives. Without such additional capital we may be required to cease operations. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

8

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of the Company are disclosed in Note 2 to the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2019. The following summary of significant accounting policies of the Company is presented to assist in understanding the Company’s interim financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment and intangible assets, operating lease obligations, impairment of assets, the deferred tax valuation allowance, the fair value of stock options and derivative liabilities. Actual results could differ from those estimates.

Consolidation

The accompanying consolidated financial statements include the accounts of the Company and, effective December 1, 2018, the accounts of EllisLab Corp., its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Property and Equipment

The Company’s property and equipment is stated at cost, and is depreciated using the straight-line method over the estimated useful life of the related asset as follows:

Computer equipment	3-5 years
Office furniture and equipment	7 years

Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

The Company assesses the recoverability of property and equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

Intangible Assets

Intangible assets consist primarily of intellectual property, customer base, trade-names/marks and non-compete agreements acquired in the Merger, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value may not be recoverable.

9

Derivative Liabilities

We have identified the conversion features of our convertible notes payable and Series B preferred stock and certain stock options as derivatives. Where the number of warrants or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional warrants and convertible debt and equity are included in the value of the derivatives. We estimate the fair value of the derivatives using the Black-Scholes pricing model and a multinomial lattice model based on projections of various potential future outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments, require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of June 30, 2019, and December 31, 2018, the Company believes the amounts reported for cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable, deferred revenue, and convertible notes payable approximate fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

· Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

· Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

· Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

10

We measure certain financial instruments at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis are as follows at June 30, 2019 and December 31, 2018:

	Total		Level 1		Level 2		Level 3
June 30, 2019:
Derivative liabilities	$	7,069,101	$	-	$	-	$	7,069,101
Total liabilities measured at fair value	$	7,069,101	$	-	$	-	$	7,069,101
December 31, 2018:
Derivative liabilities	$	10,363,105	$	-	$	-	$	10,363,105
Total liabilities measured at fair value	$	10,363,105	$	-	$	-	$	10,363,105

During the six months ended June 30, 2019, the Company had the following activity in its derivative liabilities account:

	Convertible Notes Payable			Series B Preferred Stock		Stock Options			Total
Derivative liabilities at December 31, 2018	$	7,809,054		$	2,339,898	$	214,153		$	10,363,105
Addition to liabilities for new debt/shares issued		392,000			-		-			392,000
Elimination of liabilities for debt conversions		(82,632	)		-		-			(82,632	)
Change in fair value		(3,614,742	)		107,315		(95,945	)		(3,603,372	)
Derivative liabilities at June 30, 2019	$	4,503,680		$	2,447,213	$	118,208		$	7,069,101

Revenue Recognition

On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition” (Topic 605). The Company had no operating revenues prior to the Merger. Effective December 1, 2018, the Company’s revenues are derived primarily from the sale of monthly and annual tech support subscriptions and partnership fees, and from software applications that customers purchase via the Company’s online store. Sales are processed using a real-time payment processing company. Revenue from product sales is recorded net of processing costs.

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

· identification of the contract, or contracts, with a customer;

· identification of the performance obligations in the contract;

· determination of the transaction price;

· allocation of the transaction price to the performance obligations in the contract; and

· recognition of revenue when, or as, we satisfy a performance obligation.

 

Amounts collected from customers for support subscriptions and partnership fees with a contract life of one month or greater are recorded as deferred revenue and recognized over the life of the contract.

11

Income (Loss) per Share

Basic net income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding. Diluted net income or loss per common share is computed by dividing net income or loss by the sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents then outstanding. Potential dilutive common share equivalents consist of shares issuable upon the exercise of outstanding stock options and warrants to acquire common stock, using the treasury stock method and the average market price per share during the period, and shares issuable upon exercise of convertible notes payable and convertible preferred stock.

Basic weighted average number common shares outstanding are reconciled to diluted weighted average number of common shares outstanding as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Basic weighted average number of shares		50,774,989		38,776,436		46,084,995		38,776,436
Dilutive effect of:
Stock options		-		-		-		-
Series B preferred stock		-		-		576,964,286		359,000,000
Series C preferred stock		-		-		720,000,000		-
Convertible notes payable		-		-		2,101,989,575		827,095,928
Diluted weighted average number of shares		50,774,989		38,776,436		3,445,038,856		1,224,872,364

Operating Lease

On September 5, 2017, we entered into an operating sublease for office space. The base rent for the sublease is $1,000 per month for a period of one year and month-to-month thereafter.

On January 1, 2019, we adopted Financial Accounting Standards Board (“FASB”) ASC 842, “Leases.” ASC 842 requires recognition of assets and liabilities for the rights and obligations created by leases and new disclosures about leases. We adopted ASC 842 using the optional modified retrospective transition method. Under this transition method, we did not recast the prior period financial statements presented.

The adoption of ASC 842 resulted in the measurement and recognition of an operating lease liability and corresponding right-of use asset (included in other assets) in the amount of $18,352 as of January 1, 2019. The operating lease liability was measured as the present value of assumed remaining lease payments using an estimated incremental borrowing rate. We amortize the right-of-use asset over the term of the lease.

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued by the FASB during the six months ended June 30, 2019 and through the date of filing of this report that the Company believes will have a material impact on its financial statements.

Reclassifications

Certain amounts in the condensed financial statements for the three months and six months ended June 30, 2018 have been reclassified to conform to the presentation for the three months and six months ended June 30, 2019.

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NOTE 3 – MERGER

On November 30, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with the EllisLab, Inc., Rick Ellis (“Ellis”), and EllisLab Corp., a newly formed Nevada corporation and wholly owned subsidiary of the Company, pursuant to which EllisLab, Inc. merged with and into EllisLab Corp. (the “Merger”). Pursuant to the terms of the Merger Agreement, Ellis received 36,000 shares of the Company’s newly designated Series C Convertible Preferred, with a stated value of $100 per share, in exchange for the cancellation of all common shares of EllisLab, Inc. owned by Ellis, which shares represented 100% of the issued and outstanding capital stock of EllisLab, Inc. The separate legal existence of EllisLab, Inc. ceased, and EllisLab Corp. became the surviving company.

Pursuant to the Merger Agreement, Ellis has agreed to a covenant not to compete for a period of 2 years following the effective date of the Merger (the “Non-Competition Period”). Ellis further agreed that during the Non-Competition Period, he will not directly or indirectly solicit or agree to service for his benefit or the benefit of any third-party, any of the Company’s, Digital Locations, or EllisLab Corp. customers.

Pursuant to the Merger Agreement, during the period beginning on the effective date and ending on the 24 month anniversary thereof, Ellis will not directly or indirectly, (i) offer, sell, offer to sell, contract to sell, hedge, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or sell, or otherwise transfer or dispose of, any portion of the Series C preferred shares, or any shares of the Company’s common stock underlying the preferred shares, beneficially owned, within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934.

Each of the parties to the Merger Agreement has made customary representations and warranties in the Merger Agreement.

On November 30, 2018, in connection with and pursuant to the Merger Agreement, the Company entered into a Nonstatutory Stock Option Agreement (the “Option Agreement”) with Derek Jones (“Jones”), whereby the Company issued to Jones an option to purchase 100,000,000 shares of the Common stock of the Company, at an exercise price of $0.005, in exchange for his surrender of an option to purchase 10% of the shares of outstanding common stock of EllisLab, Inc. The option is vested but may not be exercised for 2 years from the date of the Merger. The option contains a blocker that prevents Jones from exercising the Option if such exercise would result in beneficial ownership of more than 4.99% of the outstanding shares of the Company’s stock, without at least 61 days of prior notice. Under the Option, Jones is also subject to the Rule 144 restrictions of an affiliate.

The acquisition of EllisLab, Inc. in the Merger has been accounted for as a purchase, and the accounts of EllisLab Corp. are consolidated with those of the Company as of December 1, 2018. The Company engaged an independent valuation firm to estimate the value of the consideration paid by the Company in the Merger, consisting of the issuance of 36,000 shares of the Company’s $0.001 par value Series C Preferred Stock to Ellis, valued at $4,345,866, and 100,000,000 stock options to purchase common shares of the Company to Jones, valued at $599,998.

13

Based on the report of the independent valuation firm, the total value of the consideration paid of $4,945,864 has been allocated as follows:

Cash	$	35,822
Accounts receivable		22,235
Property and equipment, net		4,271
Accounts payable		(74,680	)
Accrued expenses		(14,176	)
Deferred revenue		(27,037	)
Loans payable		(60,000	)
Net liabilities		(113,565	)
Intangible assets:
Intellectual property		37,000
Customer base		79,000
Trade-name/marks		8,000
Non-compete agreements		1,000
Goodwill		4,934,429
Total	$	4,945,864

At December 31, 2018, the Company reviewed the goodwill recorded in the Merger and determined that an impairment expense of $4,934,429 was required.

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	June 30, 2019			December 31, 2018
Computer equipment	$	49,605		$	49,605
Office furniture and equipment		8,751			8,751
Total		58,356			58,356
Less accumulated depreciation		(54,693	)		(53,163	)
Net	$	3,663		$	5,193

Depreciation expense was $868 and $337 for the three months ended June 30, 2019 and 2018, respectively and $1,530 and $674 for the six months ended June 30, 2019 and 2018, respectively.

14

NOTE 5 – INTANGIBLE ASSETS

Intangible assets were acquired in the Merger and consisted of the following

	June 30, 2019			December 31, 2018
Intellectual property	$	37,000		$	37,000
Customer base		79,000			79,000
Trade-name/marks		8,000			8,000
Non-compete agreements		1,000			1,000
Total		125,000			125,000
Less accumulated amortization		(14,583	)		(2,083	)
Net	$	110,417		$	122,917

Amortization expense was $6,250 and $0 for the three months ended June 30, 2019 and 2018, respectively and $12,500 and $0 for the six months ended June 30, 2019 and 2018, respectively.

6. CONVERTIBLE NOTES PAYABLE

Convertible Promissory Note – Accounts Payable of $29,500

On March 14, 2013, we entered into an agreement to issue a 5% convertible promissory note in the principal amount of $29,500, which is convertible into shares of our common stock at a conversion price equal to the lesser of $1.50 per share or the closing price per share of common stock recorded on the trading day immediately preceding the date of conversion. The note, with a principal balance of $29,500 at June 30, 2019, matured on March 14, 2015, and is currently in default.

Convertible Promissory Notes – Related Parties of $58,600

On December 31, 2012, we issued 5% convertible promissory notes to two employees in exchange for services rendered in the aggregate amount of $58,600. The notes are convertible into shares of our common stock at a conversion price equal to the lesser of $2.00 per share or the closing price per share of common stock recorded on the trading day immediately preceding the date of conversion. We recorded a total debt discount of $57,050 related to the conversion feature of the notes, which has been fully amortized to interest expense, along with a derivative liability at inception. One of the notes with a principal balance of $25,980 at June 30, 2019, matured on December 31, 2014 and is currently in default. The maturity date of a second note with a principal balance of $32,620 at June 30, 2019 has been extended to December 31, 2019.

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March 2016 Convertible Promissory Note – $1,000,000

On March 4, 2016, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $1,000,000 (the “March 2016 $1,000,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note initially matured, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from March 4, 2016.

On March 14, 2016, we received proceeds of $27,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $27,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense. During the six months ended June 30, 2019, we issued the lender a total of 5,925,853 shares of our common stock in consideration for the conversion of principal of $6,810 and accrued interest of $2,079, resulting in a principal balance of $17,385 at June 30, 2019.

On March 17, 2016, we received proceeds of $33,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On April 11, 2016, we received proceeds of $90,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $90,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On May 20, 2016, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On June 22, 2016, we received proceeds of $50,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $50,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On July 6, 2016, we received proceeds of $87,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $87,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On August 8, 2016, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On September 13, 2016, we received proceeds of $55,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On October 17, 2016, we received proceeds of $55,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

16

On November 8, 2016, we received proceeds of $55,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On December 6, 2016, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On January 10, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On February 13, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On March 9, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On April 12, 2017, we received proceeds of $95,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $95,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On May 8, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

June 2017 Convertible Promissory Note – $500,000

On June 2, 2017, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the “June 2017 $500,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note initially matured, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from June 2, 2017.

On June 2, 2017, we received proceeds of $60,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On July 10, 2017, we received proceeds of $80,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $80,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On August 11, 2017, we received proceeds of $80,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $80,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

17

On September 12, 2017, we received proceeds of $85,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $85,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On October 13, 2017, we received proceeds of $80,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $80,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On November 8, 2017, we received proceeds of $75,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $75,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

December 2017 Convertible Promissory Note – $500,000

On December 14, 2017, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the “December 2017 $500,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note initially matured, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from December 14, 2017.

On December 14, 2017, we received proceeds of $60,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On January 11, 2018, we received proceeds of $70,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $70,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $2,110 and the debt discount has been fully amortized to interest expense.

On February 7, 2018, we received proceeds of $60,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $6,247 and the debt discount has been fully amortized to interest expense.

On March 8, 2018, we received proceeds of $55,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $10,096 and the debt discount has been fully amortized to interest expense.

On March 14, 2018, we received proceeds of $6,500 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $6,500 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $1,300 and the debt discount has been fully amortized to interest expense.

18

On April 9, 2018, we received proceeds of $77,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $77,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $20,885 and the debt discount has been fully amortized to interest expense.

On May 7, 2018, we received proceeds of $60,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $20,877 and the debt discount has been fully amortized to interest expense.

On June 7, 2018, we received proceeds of $52,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $52,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $22,500, and the debt discount has been fully amortized to interest expense.

On July 10, 2018, we received proceeds of $35,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $35,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $17,356, resulting in a remaining debt discount of $959 as of June 30, 2019.

On August 16, 2018, we received proceeds of $24,500 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $24,500 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $12,149, resulting in a remaining debt discount of $3,155 as of June 30, 2019.

August 2018 Convertible Promissory Note – $500,000

On August 17, 2018, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the “August 2018 $500,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.01; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note matures, with respect to each advance, one year from the effective date of each advance.

On August 17, 2018, we received proceeds of $10,500 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $10,500 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $5,207, resulting in a remaining debt discount of $1,381 as of June 30, 2019.

On September 13, 2018, we received proceeds of $30,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $14,877, resulting in a remaining debt discount of $6,164 as of June 30, 2019.

19

On October 8, 2018, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $12,397, resulting in a remaining debt discount of $6,850 as of June 30, 2019.

On October 26, 2018, we received proceeds of $12,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $12,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $5,951, resulting in a remaining debt discount of $3,879 as of June 30, 2019.

On November 5, 2018, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $12,397, resulting in a remaining debt discount of $8,767 as of June 30, 2019.

On November 28, 2018, we received proceeds of $30,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $14,877, resulting in a remaining debt discount of $12,411 as of June 30, 2019.

On November 30, 2018, we received proceeds of $10,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $10,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $4,959, resulting in a remaining debt discount of $4,192 as of June 30, 2019.

On December 24, 2018, we received proceeds of $50,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $50,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $24,795, resulting in a remaining debt discount of $24,246 as of June 30, 2019.

On January 17, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $11,253, resulting in a remaining debt discount of $13,767 as of June 30, 2019.

On February 25, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $8,562, resulting in a remaining debt discount of $16,438 as of June 30, 2019.

On March 22, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $6,831, resulting in a remaining debt discount of $18,169 as of June 30, 2019.

20

On March 26, 2019, we received proceeds of $15,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $15,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $3,934, resulting in a remaining debt discount of $11,066 as of June 30, 2019.

On April 11, 2019, we received proceeds of $15,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $15,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $3,279, resulting in a remaining debt discount of $11,721 as of June 30, 2019.

On April 19, 2019, we received proceeds of $65,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $65,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $12,787, resulting in a remaining debt discount of $52,213 as of June 30, 2019.

On June 28, 2019, we received proceeds of $30,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $164, resulting in a remaining debt discount of $29,836 as of June 30, 2019.

November 23, 2018 Convertible Promissory Note – $33,000

Effective November 23, 2018, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures November 23, 2019. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $29,564, and the debt discount has been fully amortized to interest expense. During the six months ended June 30, 2019, we issued the lender a total of 10,690,179 shares of our common stock in consideration for the conversion of principal of $33,000 and accrued interest of $1,650, extinguishing the note in full.

December 5, 2018 Convertible Promissory Note – $33,000

Effective December 5, 2018, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures December 5, 2019. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $30,612, resulting in a remaining debt discount of $37 as of June 30, 2019. During the six months ended June 30, 2019, we issued the lender a total of 16,090,758 shares of our common stock in consideration for the conversion of principal of $32,900, resulting in a principal balance of $100 as of June 30, 2019.

21

January 25, 2019 Convertible Promissory Note – $38,000

Effective January 25, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $38,000. The note matures January 25, 2020. The Company received proceeds of $35,000 after an original issue discount of $1,500 and payment of $1,500 in legal fees. The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $38,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $16,241, resulting in a remaining debt discount of $21,759 as of June 30, 2019.

February 13, 2019 Convertible Promissory Note – $38,000

Effective February 13, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $38,000. The note matures February 13, 2020. The Company received proceeds of $35,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $38,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $14,263, resulting in a remaining debt discount of $23,737 as of June 30, 2019.

March 25, 2019 Convertible Promissory Note – $35,000

Effective March 25, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $35,000. The note matures March 25, 2020. The Company received proceeds of $32,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $35,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $9,276, resulting in a remaining debt discount of $25,724 as of June 30, 2019.

22

May 23, 2019 Convertible Promissory Note – $33,000

Effective May 23, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures May 23, 2020. The Company received proceeds of $30,000 after an original issue discount of $1,750 and payment of $1,250 in legal fees. The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $3,426, resulting in a remaining debt discount of $29,574 as of June 30, 2019.

May 24, 2019 Convertible Promissory Note – $33,000

Effective May 24, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures May 24, 2020. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $3,336, resulting in a remaining debt discount of $29,664 as of June 30, 2019.

June 27, 2019 Convertible Promissory Note – $33,000

Effective June 27, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures June 27, 2020. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $270, resulting in a remaining debt discount of $32,730 as of June 30, 2019.

Total accrued interest payable on notes payable was $457,057 and $342,752 as of June 30, 2019 and December 31, 2018, respectively.

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7. CAPITAL STOCK

At June 30, 2019, the Company’s authorized stock consisted of 2,000,000,000 shares of common stock, with a par value of $0.001 per share. The Company is also authorized to issue 20,000,000 shares of preferred stock, with a par value of $0.001 per share. The rights, preferences and privileges of the holders of the preferred stock will be determined by the Board of Directors prior to issuance of such shares.

Series B Preferred Stock

On March 2, 2016, the Company filed a Certificate of Designation for its Series B Preferred Stock (the “Series B Certificate”) with the Secretary of State of Nevada designating 30,000 shares of its authorized preferred stock as Series B Preferred Stock. The shares of Series B Preferred Stock have a par value of $0.001 per share.

The total face value of this entire series is three million dollars ($3,000,000). Each share of Series B Preferred Stock has a stated face value of One Hundred Dollars ($100) (“Share Value”) and is convertible into shares of fully paid and non-assessable shares of common stock of the Company.

As of June 30, 2019, and December 31, 2018, the Company had 16,155 shares of Series B Preferred Stock outstanding, with a face value of $1,615,500. These shares were issued in March 2016 for the redemption and cancellation of $1,615,362 of convertible promissory notes and $264,530 of accrued interest payable.

The holders of outstanding shares of the Series B Preferred Stock (the “Series B Holders”) are entitled to receive dividends pari passu with the holders of Common Stock, except upon a liquidation, dissolution and winding up of the Company, in which case the Series B Preferred Stock has a preference. Such dividends will be paid equally to all outstanding shares of Series B Preferred Stock and Common Stock, on an as-if-converted basis with respect to the Series B Preferred Stock. The Series B Holders may elect to use the most favorable conversion price for the purpose of determining the as-if-converted number of shares.

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Series B Holder shall be entitled to receive, out of the assets of the Company available for distribution to its shareholders upon such liquidation, whether such assets are capital or surplus of any nature, an amount equal to one hundred dollars ($100) for each such share of the Series B Preferred Stock (as adjusted for any combinations, consolidations, stock distributions, stock splits or stock dividends with respect to such shares), plus all dividends, if any, declared and unpaid thereon as of the date of such distribution, before any payment is made or any assets distributed to the holders of the Common Stock. After such payment, the remaining assets of the Company will be distributed to the holders of Common Stock.

If the assets to be distributed to the Series B Holders are insufficient to permit the receipt by such Holders of the full preferential amounts, then all of such assets will be distributed among such Holders ratably in accordance with the number of such shares then held by each such Holder.

The sale of all or substantially all of the Company’s assets, any consolidation or merger of the Company with or into any other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than fifty percent (50%) of the Company’s voting power immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred, excluding any consolidation or merger effected exclusively to change the domicile of the Company, is deemed to be a liquidation, dissolution or winding up.

The Series B Preferred Stock is convertible into Common Stock.

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The Series B Holder has the right, at any time, at its election, to convert all or part of the Share Value into shares of Common Stock. The conversion price is the lesser of (1) Fifty Percent (50%) of the lowest trade price of Common Stock recorded on any trade day after December 12, 2012 or (2) the lowest effective price per share granted to any person or entity, including the Series B Holder but excluding officers and directors of the Company, to acquire Common Stock, or adjusted, whether by operation of purchase price adjustment, settlement agreements, exchange agreements, reset provision, floating conversion or otherwise, any outstanding warrant, option or other right to acquire Common Stock or outstanding Common Stock equivalents (the “Conversion Price”).

The conversion formula is as follows: The number of shares receivable upon conversion equals the Share Value divided by the Conversion Price. A conversion notice (the “Conversion Notice”) may be delivered to Company by any method of the Series B Holder’s choice (including but not limited to email, facsimile, mail, overnight courier, or personal delivery), and all conversions will be cashless and not require further payment from the Holder. If no objection is delivered from the Company to the Series B Holder, with respect to any variable or calculation reflected in the Conversion Notice, within 24 hours of delivery of the Conversion Notice, the Company will thereafter be deemed to have irrevocably confirmed and ratified such notice of conversion and waived any objection. The Company will deliver the shares of Common Stock from any conversion to the Series B Holder (in any name directed by the Series B Holder) within three (3) business days of Conversion Notice delivery. If the Company is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, then upon request of the Holder and provided that the shares to be issued are eligible for transfer under Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), or are effectively registered under the Securities Act, the Company will cause its transfer agent to electronically issue the Common Stock issuable upon conversion to the Holder through the DTC Direct Registration System (“DRS”). If the Company is not participating in the DTC FAST program, then the Company agrees in good faith to apply and cause the approval for participation in the DTC FAST program.

The Conversion Price is subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events. No fractional shares of the Common Stock shall be issuable upon the conversion of shares of the Series B Preferred Stock and the Company shall pay the cash equivalent of any fractional share upon such conversion.

If the Company fails to deliver shares in accordance with the required time frame, then for each conversion, a penalty of $1,500 per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery is made. Such penalty may be converted into Common Stock at the Conversion Price or payable in cash, at the sole option of the Series B Holder (under the Holder’s and the Company’s expectations that any penalty amounts shall tack back to the original date of the issuance of Series B Preferred Stock, consistent with applicable securities laws).

In no event will the Series B Holder be entitled to convert any Series B Preferred Stock, such that upon conversion the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of this Series B Preferred Stock or the unexercised or unconverted portion of any other security of the Company subject to a limitation on conversion or exercise analogous to these limitations), and (2) the number of shares of Common Stock issuable upon the conversion of Series B Preferred Stock, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. The limitations on conversion may be waived by the Holder upon, at the election of the Series B Holder, not less than 61 days prior notice to the Company, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Series B Holder, as may be specified in such notice of waiver).

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Except as required by law, the Series B Holders are not entitled to vote, as a separate class or otherwise, on any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting). Each Holder of outstanding shares of Series B Preferred Stock will be entitled, on the same basis as holders of Common Stock, to receive notice of such action or meeting.

So long as any shares of the Series B Preferred Stock remain outstanding, the Company will not, without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock voting together as one class: (a) alter or change the rights, preferences or privileges of the shares of the Series B Preferred Stock so as to affect materially and adversely such shares; or (b) create any new class of shares having preference over the Series B Preferred Stock.

The Series B Holder has the right, at its sole discretion, to elect a fixed conversion price for the Series B Preferred Stock. The Fixed Conversion Price may not be lower than the Conversion Price. The Company will not, by amendment of its Certificate of Incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the Series B Certificate, and will at all times carry out all the provisions of the Series B Certificate.

Series C Preferred Stock

In November 2018, the Company filed a Certificate of Designation for its Series C Preferred Stock (the “Series C Certificate”) with the Secretary of State of Nevada designating 36,000 shares of its authorized preferred stock as Series C Preferred Stock. The shares of Series C Preferred Stock have a par value of $0.001 per share. The total face value of this entire series is three million dollars ($3,600,000). Each share of Series C Preferred Stock has a stated face value of One Hundred Dollars ($100) (“Share Value”) and is convertible into shares of fully paid and non-assessable shares of common stock of the Company.

As discussed in Note 3, the Company issued 36,000 shares of Series C Preferred Stock to the owner of the common stock of EllisLab, Inc. in the Merger, which shares were outstanding at June 30, 2019 and December 31, 2018.

The holders of outstanding shares of the Series C Preferred Stock (the “Series C Holders”) shall be entitled to receive dividends pari passu (on a pro rata basis) with the holders of Series B Preferred Stock and Common Stock, except upon a liquidation, dissolution and winding up of the Company. Such dividends shall be paid equally to all outstanding shares of Series C Preferred Stock, Series B Preferred Stock and Common Stock, on an as-if-converted basis with respect to the Series C Preferred Stock and Series B Preferred Stock.

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Holder of each outstanding share of the Series C Preferred Stock shall be entitled to receive, on a pro rata basis with the outstanding Series B Preferred Stock, out of the assets of the Company available for distribution to its shareholders upon such liquidation, whether such assets are capital or surplus of any nature, an amount equal to one hundred dollars ($100.00) for each such share of the Series C Preferred Stock (as adjusted for any combinations. consolidations, stock distributions, stock splits or stock dividends with respect to such shares), plus all dividends, if any, declared and unpaid thereon as of the date of such distribution, before any payment shall be made or any assets distributed to the holders of the Common Stock, and, after such payment, the remaining assets of the Company shall be distributed to the holders of Common Stock.

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Each share of Series C Preferred Stock is convertible into twenty thousand (20,000) shares of the Company’s fully paid and nonassessable shares of Common Stock, as adjusted. The Series C Preferred Stock shall contain the respective rights, privileges and designations as are set forth in the Certificate of Designations, Preferences, Rights and Limitations of Series C Preferred Stock appended hereto as Exhibit 4.1. The Series C contains a blocker that prevents the Holder from converting the Series C Preferred if such exercise would result in beneficial ownership of more than 4.99% of the outstanding shares of the Company’s stock, without at least 61 days of prior notice. Under the Series C Preferred Stock, the Holder is also subject to the Rule 144 restrictions of an affiliate.

Except as required by law or as specifically provided in the Certificate of Designation, the Series C Holders shall not be entitled to vote, as a separate class or otherwise, on any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting); provided, however, that each Series C Holder shall be entitled, on the same basis as holders of Common Stock, to receive notice of such action or meeting.

Common Stock

On April 20, 2016, the Company amended its articles of incorporation to reduce the number of authorized shares of common stock from 1,000,000,000 to 100,000,000 and to affect a one-for-ten reverse stock split of its authorized, issued and outstanding shares of common stock. The Company has given retroactive affect for the reverse stock split in all periods presented in the accompanying financial statements.

On April 29, 2016, our Board of Directors and the holder of a majority of the total issued and outstanding voting stock of the Company authorized and approved an amendment to the Company’s articles of incorporation to increase the number of authorized shares of common stock from 100,000,000 to 2,000,000,000.

As of June 30, 2019, and December 31, 2018, the Company had 73,456,860 and 40,750,040 shares of common stock issued and outstanding, respectively.

During the six months ended June 30, 2019, the Company issued a total of 32,706,820 shares of common stock at fair value in consideration for the conversion of $72,710 of convertible promissory notes and accrued interest payable of $3,729. In connection with the debt conversions, the Company reduced derivative liabilities by $82,632. There was no gain or loss on settlement of debt due to the conversions occurring within the terms of the convertible note.

During the six months ended June 30, 2018, the Company did not issue any shares of common stock.

8. STOCK OPTIONS AND WARRANTS

As of June 30, 2019, the Board of Directors of the Company had granted non-qualified stock options and warrants exercisable for a total of 141,405,000 shares of common stock to its employees, officers, and consultants.

As further discussed in Note 3, on November 30, 2018 in connection with the Merger, the Company issued a ten-year option to purchase 100,000,000 shares of common stock of the Company, at an exercise price of $0.005. The option vested upon grant but may not be exercised for 2 years from the date of the Merger. Stock-based compensation of $599,998, measured at the grant date using a multinomial lattice model, was included in the purchase price recorded in the Merger and recorded to additional paid-in capital.

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On November 30, 2018, the Company also issued ten-year warrants to two consultants to purchase a total of 40,000,000 shares of common stock of the Company, at an exercise price of $0.005. The warrants vested upon grant but may not be exercised for 2 years from the date of issuance. Stock-based compensation of $188,127, measured at the grant date using a multinomial lattice model, was included in general and administrative expenses and recorded to derivative liabilities due to the existence of a tainted equity environment.

We recognized no stock-based compensation expense for the three months and six months ended June 30, 2019 and 2018.

As of June 30, 2019, we had no unrecognized stock-based compensation expense.

A summary of the Company’s stock options and warrants as of June 30, 2019, and changes during the six months then ended is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018		141,406,250		$	0.006		9.84
Granted		-		$	-
Exercised		-		$	-
Forfeited or expired		(1,250	)	$	14.80
Outstanding at June 30, 2019		141,405,000		$	0.006		9.35	$	-

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the closing price of our common stock of $0.0028 as of June 30, 2019, which would have been received by the holders of in-the-money options and warrants had the holders exercised their options and warrants as of that date.

9. DERIVATIVE LIABILITIES

The fair value of the Company’s derivative liabilities is estimated at the issuance date and is revalued at each subsequent reporting date. We estimate the fair value of derivative liabilities associated with our convertible notes payable, Series B preferred stock and warrants using a multinomial lattice model based on projections of various potential future outcomes. Where the number of warrants or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional warrants and convertible debt and equity are included in the value of the derivatives.

The significant assumptions used in the valuation of the derivative liabilities at June 30, 2019 are as follows:

Conversion to stock	Monthly
Stock price on the valuation date	$	0.0028
Conversion price	$	2.00 - $0.0015
Risk free interest rates		0.91% - 2.71	%
Years to maturity		15.0
Expected volatility		111% - 392	%

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The value of our derivative liabilities was estimated as follows at:

	June 30, 2019		December 31, 2018
Convertible notes payable	$	4,503,680	$	7,809,054
Series B preferred stock		2,447,213		2,339,898
Warrants		118,208		214,153
Total	$	7,069,101	$	10,363,105

The calculation input assumptions are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liability will fluctuate from period to period, and the fluctuation may be material.

10. OPERATING LEASE

On September 5, 2017, we entered into an operating sublease for office space. The base rent for the sublease is $1,000 per month for a period of one year and month-to-month thereafter. Management has assumed a three-year life for the sublease arrangement. On January 1, 2019, we adopted ASC 842, “Leases,” which resulted in the recognition of an operating lease liability and corresponding right-of use asset (“ROU”) (included in other assets) in the amount of $18,352.

As of June 30, 2019, the operating lease liability and ROU asset had a balance of $13,163. The current portion of the operating lease liability as of June 30, 2019 was $11,187.

For the six months ended June 30, 2019, the Company recognized operating lease cost of $6,000,

The table below reconciles the Company’s future cash obligations for the operating lease liability recorded on the consolidated balance sheet as June 30, 2019:

2019	$	6,000
2020		8,000
Total minimum lease payments		14,000
Less amount representing interest		(837	)
Present value of operating lease obligation	$	13,163

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11. RELATED PARTY TRANSACTIONS

Pursuant to a written consulting agreement, dated May 31, 2013 and amended effective November 1, 2016, William E. Beifuss, Jr., our current President, Acting Chief Financial Officer and former Interim Chief Executive Officer , receives annual consulting fees of $120,000, of which $30,000 and $60,000 were paid in each of the three months and six months ended June 30, 2019 and 2018, respectively.

Effective December 1, 2018, Rick Ellis, Chief Executive Officer of the Company and Chief Executive Officer of EllisLab Corp., receives a monthly salary of $10,000, or $30,000 and $60,000 for the three months and six months ended June 30, 2019, respectively.

See Note 6 for discussion of convertible notes payable with related parties.

12. SUBSEQUENT EVENTS

Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has reported the following:

Subsequent Borrowings

We received an advance under the August 2018 $500,000 CPN of $40,000 on July 29, 2019.

Convertible Note Conversions

On July 1, 2019, a lender converted $100 principal and $1,650 accrued interest payable into 1,029,412 common shares of the Company.

On July 15, 2019, a lender converted $2,000 principal and $667 accrued interest payable into 2,319,476 common shares of the Company.

On August 8, 2019, a lender converted $4,386 principal and $250 in fees into 3,800,000 common shares of the Company.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below, and elsewhere in this report, are not related to historical results, and are forward-looking statements. Forward-looking statements present our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements frequently are accompanied by such words such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms or other words and terms of similar meaning. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or timeliness of such results. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements contained herein after the date of this report. Subsequent written and oral forward looking statements attributable to us or to persons acting in our behalf are expressly qualified in their entirety by the cautionary statements and risk factors set forth in our annual report on Form 10-K for the year ended December 31, 2018 filed with the SEC on April 1, 2019, and in other reports filed by us with the SEC

You should read the following description of our financial condition and results of operations in conjunction with the condensed financial statements and accompanying notes included in this report.

Current Overview

On November 30, 2018, the Company entered into an Agreement and Plan of Merger with EllisLab, Inc., Rick Ellis (“Ellis”), and EllisLab Corp., a newly formed Nevada corporation and wholly owned subsidiary of the Company, pursuant to which EllisLab, Inc. merged with and into EllisLab Corp. (the “Merger”). Pursuant to the terms of the Merger, Ellis received 36,000 shares of the Company’s newly designated Series C Convertible Preferred, with a stated value of $100 per share, in exchange for the cancellation of all common shares of EllisLab, Inc. owned by Ellis, which shares represented 100% of the issued and outstanding capital stock of EllisLab, Inc. The separate legal existence of EllisLab, Inc. ceased, and EllisLab Corp. (“EllisLab”) became the surviving company. EllisLab is the developer of an open-source CMS software, called ExpressionEngine, with an early stage development effort to use AI in the creation of highly personalized digital content and online experiences.

In November 2018, we transformed ExpressionEngine into a free and open source software platform (FOSS), following in the footsteps of RedHat, WordPress and other successful open source platforms. Doing so will allow us to quickly increase the user base of ExpressionEngine. From this community we intend to collaborate, distill, and develop our AI-based content personalization products and services.

In changing to a FOSS model, we no longer derive our revenue from software sales, but rather from complementary services and premium add-ons to the ExpressionEngine platform and community. We are currently executing a plan to achieve profitability with these new products and services.

The acquisition of EllisLab, Inc. in the Merger has been accounted for as a purchase, and the accounts of EllisLab Corp. are consolidated with those of the Company as of December 1, 2018. Therefore, the results of operations and cash flows for the six months ended June 30, 2019 are not comparable to results of operations reported for the six months ended June 30, 2018.

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The accompanying consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. As of June 30, 2019, our current liabilities exceeded our current assets by $9,919,279 and we had a total stockholders’ deficit of $9,794,012. In addition, prior to the Merger in November 2018, the Company did not generate any revenue, and has reported negative cash flows from operations since inception. The Company currently does not have the cash resources to meet its operating commitments for the next twelve months and expects to have ongoing requirements for capital investment to implement its business plan. These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern for a reasonable period of time.

The ability of the Company to continue as a going concern is dependent upon, among other things, raising additional capital. The Company has obtained operating funds primarily from the issuance of convertible debt. Management believes this funding will continue and will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the development of the recently acquired EllisLab business. There can be no assurance, however, that the Company will be successful in accomplishing its objectives. Without such additional capital we may be required to cease operations. The accompanying consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

Results of Operations

Three Months and Six Months Ended June 30, 2019 Compared to the Three Months and Six Months Ended June 30, 2018

Revenues

Revenues for the three months ended June 30, 2019 totaled $89,012, comprised of services income of $47,566, commissions and fees of $39,915 and software sales of $1,531. Revenues for the six months ended June 30, 2019 totaled $221,536, comprised of services income of $178,765, commissions and fees of $39,915 and software sales of $2,856. As discussed above, revenues are EllisLab revenues and we had no revenues prior to the Merger.

General and Administrative Expenses

General and administrative expenses increased by $107,248 to $261,580 in the three months ended June 30, 2019 from $154,332 in the three months ended June 30, 2018 and increased by $228,570 to $605,961 in the six months ended June 30, 2019 from $377,391 in the six months ended June 30, 2018. The increase in general and administrative expenses is due primarily to inclusion of EllisLab operating expenses, particularly payroll and payroll related expenses, and increased professional fees incurred with the Merger.

Depreciation and Amortization Expense

Depreciation and amortization expense totaled $7,118 and $337 for the three months ended June 30, 2019 and 2018, respectively, and totaled $14,030 and $674 for the six months ended June 30, 2019 and 2018, respectively. Our investment in property and equipment currently is not material to our operations. The increase in depreciation and amortization expense in the current year resulted from the amortization of intangible assets acquired in the Merger.

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Other Income (Expense)

Total other income was $117,242 for the three months ended June 30, 2019 and total other expense was $142,627 for the three months ended June 30, 2018. Total other income was $3,118,862 and $1,752,822 for the six months ended June 30, 2019 and 2018, respectively. The total other income for these periods resulted from a gain on change in derivative liabilities, partially offset by interest expense.

We reported a gain on change in derivative liabilities of $378,026 and $118,565 in the three months ended June 30, 2019 and 2018, respectively, and $3,603,372 and $2,264,923 in the six months ended June 30, 2019 and 2018, respectively. Our convertible debt continued to increase during the current year resulting in additional derivative liabilities. We estimate the fair value of the derivatives associated with our convertible notes, certain stock options and our Series B Preferred Stock using a multinomial lattice model based on projections of various potential future outcomes. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Our interest expense decreased $408 to $260,787 for the three months ended June 30, 2019 from $261,192 for the three months ended June 30, 2018 and decreased $27,591 to $484,510 for the six months ended June 30, 2019 from $512,101 for the six months ended June 30, 2018. The decrease in interest expense resulted primarily from the timing of amortization from lower amortization of debt discount in the current year, partially offset by additional interest expense accrued on additional convertible notes payable.

Net Income (Loss)

As a result of the activity reported above, we reported net losses of $62,444 and $297,296 in the three months ended June 30, 2019 and 2018, respectively. Primarily as a result of gains on change in derivative liabilities, we reported net income of $2,720,407 and $1,374,757 in the six months ended June 30, 2019 and 2018, respectively.

Liquidity and Capital Resources

As of June 30, 2019, we had total current assets of $76,842, including cash of $37,360, and total current liabilities of $9,996,121, resulting in a working capital deficit of $9,919,279. Included in our current liabilities at June 30 ,2019 are derivative liabilities totaling $7,069,101, which we do not anticipate will require cash payments to settle.

We have funded our operations primarily from the proceeds of convertible notes payable. During the six months ended June 30, 2019, we received proceeds of $392,000.

During the six months ended June 30, 2019, we used net cash of $411,054 in operating activities as a result of our net income of $2,720,407, non-cash expenses totaling $376,796, increases in accounts payable of $18,136, accrued interest, note payable of $118,034 and deferred revenue of $1,796, offset by non-cash gain of $3,603,372, increases in accounts receivable of $13,717, prepaid expenses of $16,696 and decrease in accrued expenses of $12,438.

During the six months ended June 30, 2018, we used net cash of $379,930 in operating activities as a result of our net income of $1,374,757, non-cash expenses totaling $426,633 and increases in accounts payable of $11,118 and accrued expenses of $85,879, offset by non-cash gain of $2,264,923 and increase in prepaid expenses of $13,394.

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During the six months ended June 30, 2019 and 2018, we had no net cash provided by or used in investing activities.

Net cash provided by financing activities during the six months ended June 30, 2019 and 2018 was $392,000 and $380,500, respectively, comprised of proceeds from convertible notes payable.

Although most recently, proceeds received from the issuance of debt are sufficient to fund our current operating expenses, we will need to raise additional funds in the future to grow the EllisLab operations and provide the necessary capital to meet our other general and administrative expenses. Therefore, our future operations are dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences, or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we may have to curtail our marketing and development plans and possibly cease our operations.

We believe that EllisLab has the potential to attain a profitable level of operations and we believe we have assets to ensure that we can continue to operate without liquidation over the next twelve months, due to our current cash, and our experience in the past in being able to raise money from our investor base. Therefore, we believe we have the ability to continue our operations for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of our operations. However, we cannot assure that we will be successful in these endeavors.

Critical Accounting Policies

Our significant accounting policies are disclosed in Note 2 to our consolidated financial statements. The following is a summary of those accounting policies that involve significant estimates and judgment of management.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment and intangible assets, impairment of assets, the deferred tax valuation allowance, the fair value of stock options and derivative liabilities. Actual results could differ from those estimates.

Intangible Assets

Intangible assets consist primarily of intellectual property, customer base, trade-names/marks and non-compete agreements acquired in the Merger, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate their carrying value may not be recoverable.

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Fair Value of Financial Instruments

Disclosures about fair value of financial instruments, require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of June 30, 2019, and December 31, 2018, the Company believes the amounts reported for cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable, deferred revenue, and convertible notes payable approximate fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

· Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

· Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

· Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial instruments at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis are as follows at June 30, 2019 and December 31, 2018:

	Total		Level 1		Level 2		Level 3
June 30, 2019:
Derivative liabilities	$	7,069,101	$	-	$	-	$	7,069,101
Total liabilities measured at fair value	$	7,069,101	$	-	$	-	$	7,069,101
December 31, 2018:
Derivative liabilities	$	10,363,105	$	-	$	-	$	10,363,105
Total liabilities measured at fair value	$	10,363,105	$	-	$	-	$	10,363,105

35

Derivative Liabilities

We have identified the conversion features of our convertible notes payable and Series B preferred stock and certain stock options as derivatives. Where the number of warrants or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional warrants and convertible debt and equity are included in the value of the derivatives. We estimate the fair value of the derivatives using the Black-Scholes pricing model and a multinomial lattice model based on projections of various potential future outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Operating Lease

On September 5, 2017, we entered into an operating sublease for office space. The base rent for the sublease is $1,000 per month for a period of one year and month-to-month thereafter.

On January 1, 2019, we adopted Financial Accounting Standards Board (“FASB”) ASC 842, “Leases.” ASC 842 requires recognition of assets and liabilities for the rights and obligations created by leases and new disclosures about leases. We adopted ASC 842 using the optional modified retrospective transition method. Under this transition method, we did not recast the prior period financial statements presented.

The adoption of ASC 842 resulted in the measurement and recognition of an operating lease liability and corresponding right-of use asset (included in other assets) in the amount of $18,352 as of January 1, 2019. The operating lease liability was measured as the present value of assumed remaining lease payments using an estimated incremental borrowing rate. We amortize the right-of-use asset over the term of the lease.

Revenue Recognition

On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition” (Topic 605). The Company had no operating revenues prior to the Merger. Effective December 1, 2018, the Company’s revenues are derived primarily from the sale of monthly and annual tech support subscriptions and partnership fees, and from software applications that customers purchase via the Company’s online store. Sales are processed using a real-time payment processing company. Revenue from product sales is recorded net of processing costs.

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

· identification of the contract, or contracts, with a customer;

· identification of the performance obligations in the contract;

· determination of the transaction price;

· allocation of the transaction price to the performance obligations in the contract; and

· recognition of revenue when, or as, we satisfy a performance obligation.

 

Amounts collected from customers for support subscriptions and partnership fees with a contract life of one month or greater are recorded as deferred revenue and recognized over the life of the contract.

36

Stock-Based Compensation

Stock-based compensation is measured at the grant date based on the value of the award granted using either the Black-Scholes option pricing model or a multinomial lattice model based on projections of various potential future outcomes and recognized over the period in which the award vests. For stock awards no longer expected to vest, any previously recognized stock compensation expense is reversed in the period of termination. The stock-based compensation expense is included in general and administrative expenses.

Recently Issued Accounting Pronouncements

Although there are several new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to the Chief Executive Officer and Acting Chief Financial Officer to allow timely decisions regarding disclosure.

37

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Acting Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Acting Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are not effective as of such date. The Chief Executive Officer and Acting Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:

1.	As of June 30, 2019, we did not maintain effective controls over the control environment. Specifically, the Board of Directors does not currently have any independent members. Since this entity level control has a pervasive effect across the organization, management has determined that this circumstance constitutes a material weakness.
2.	As of June 30, 2019, due to the inherent issue of segregation of duties in a small company, we have relied heavily on entity or management review controls and engaged an outside financial consultant to lessen the issue of segregation of duties over accounting, financial close procedures and controls over financial statement disclosure. Accordingly, management has determined that this control deficiency constitutes a material weakness.
3.	As of June 30, 2019, we did not establish a formal written policy for the approval, identification and authorization of related party transactions.

Because of these material weaknesses, management has concluded that the Company’s disclosure controls and procedures were not effective.

Changes in Internal Control Over Financial Reporting.

There have been no changes in the Company’s internal control over financial reporting through the date of this report or during the quarter ended June 30, 2019, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

38

 

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of our business. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.

ITEM 1A. RISK FACTORS

There are no material changes from the risk factors previously disclosed in our annual report on Form 10-K filed on April 1, 2019.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the six months ended June 30, 2019, the Company issued to two lenders a total of 32,706,820 shares of common stock at fair value in consideration for the conversion of $72,710 of convertible promissory notes and accrued interest payable of $3,729. The Company relied on an exemption pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, in connection with the foregoing issuances.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

39

ITEM 6. EXHIBITS

31.1*	Certification of the principal executive officer pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)
31.2*	Certification of the principal financial and accounting officer pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)
32.1*	Certification pursuant to 18 U.S.C. §1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification pursuant to 18 U.S.C. §1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
EX-101.INS	XBRL INSTANCE DOCUMENT
EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
EX-101.LAB	XBRL TAXONOMY EXTENSION LABELS LINKBASE
EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

__________ 

*Filed herewith

40

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Santa Barbara, State of California, on August 13, 2019.

DIGITAL LOCATIONS, INC.
By:	/s/ Rick Ellis
	Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ William E. Beifuss, Jr.
	William E. Beifuss, Jr.
	President and Acting Chief Financial Officer
	(Principal Financial/Accounting Officer)

41

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Rick Ellis, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Digital Locations, Inc. for the quarter ended June 30, 2019;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 13, 2019

/s/ Rick Ellis

Rick Ellis

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, William E. Beifuss, Jr., certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Digital Locations, Inc. for the quarter ended June 30, 2019;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 13, 2019

/s/ William E. Beifuss, Jr.

William E. Beifuss, Jr.

President and Acting Chief Financial Officer

(Principal Financial/Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Digital Locations, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Rick Ellis,Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

August 13, 2019	/s/ Rick Ellis
	Rick Ellis
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Digital Locations, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William E. Beifuss, Jr., President and Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

August 13, 2019	/s/ William E. Beifuss, Jr.
	William E. Beifuss, Jr.
	President and
	Acting Chief Financial Officer
	(Principal Financial/Accounting Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 13, 2019
Document And Entity Information
Entity Registrant Name	Digital Locations, Inc.
Entity Central Index Key	0001407878
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2019
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Entity Common Stock Shares Outstanding		80,605,748

XML

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash	$ 37,360	$ 56,414
Accounts receivable	17,151	3,434
Prepaid expenses	22,331	5,635
Total current assets	76,842	65,483
Property and equipment, net	3,663	5,193
Intangible assets, net	110,417	122,917
Operating lease right to use	13,163
Total assets	204,085	193,593
Current liabilities:
Accounts payable	209,448	191,312
Accrued expenses and other current liabilities	6,694	19,132
Accrued interest, notes payable	457,057	342,752
Deferred revenue	27,514	25,718
Operating lease liability, current portion	11,187
Derivative liabilities	7,069,101	10,363,105
Convertible note payable, in default	29,500	29,500
Convertible notes payable - related parties ($25,980 in default)	58,600	58,600
Convertible notes payable, net of discount of $388,440 and $341,206, respectively	2,127,020	1,836,964
Total current liabilities	9,996,121	12,867,083
Operating lease liability, long-term portion	1,976
Total liabilities	9,998,097	12,867,083
Stockholders' deficit:
Preferred stock
Common stock, $0.001 par value; 2,000,000,000 shares authorized, 73,456,860 and 40,750,040 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively	73,457	40,750
Additional paid-in capital	25,619,339	25,492,975
Accumulated deficit	(35,486,860)	(38,207,267)
Total stockholders' deficit	(9,794,012)	(12,673,490)
Total liabilities and stockholders' deficit	204,085	193,593
Preferred Stock Series B [Member]
Stockholders' deficit:
Preferred stock	16	16
Preferred Stock Series C [Member]
Stockholders' deficit:
Preferred stock	$ 36	$ 36

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Stockholders' deficit
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	73,456,860	40,750,040
Common stock, shares outstanding	73,456,860	40,750,040
Preferred stock, shares par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred Stock Series B [Member]
Stockholders' deficit
Preferred stock, shares issued	16,155	16,155
Preferred stock, shares outstanding	16,155	16,155
Preferred Stock Series C [Member]
Stockholders' deficit
Preferred stock, shares issued	36,000	36,000
Preferred stock, shares outstanding	36,000	36,000

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues
Services income	$ 47,566		$ 178,765
Commissions and fees	39,915		39,915
Software sales	1,531		2,856
Total revenues	89,012		221,536
Operating expenses:
General and administrative	261,580	154,332	605,961	377,391
Depreciation and amortization	7,118	337	14,030	674
Total operating expenses	268,698	154,669	619,991	378,065
Loss from operations	(179,686)	(154,669)	(398,455)	(378,065)
Other income (expense):
Interest expense	(260,784)	(261,192)	(484,510)	(512,101)
Gain on change in derivative liabilities	378,026	118,565	3,603,372	2,264,923
Total other income (expense)	117,242	(142,627)	3,118,862	1,752,822
Income (loss) before income taxes	(62,444)	(297,296)	2,720,407	1,374,757
Provision for income taxes
Net income (loss)	$ (62,444)	$ (297,296)	$ 2,720,407	$ 1,374,757
Net income (loss) per common share:
Basic	$ (0.00)	$ (0.01)	$ 0.06	$ 0.04
Diluted	$ (0.00)	$ (0.01)	$ 0.00	$ 0.00
Weighted average number of shares outstanding:
Basic	50,774,989	38,776,436	46,084,995	38,776,436
Diluted	50,774,989	38,776,436	3,445,038,856	1,224,872,364

XML

Condensed Consolidated Statement of Stockholders' Deficit (Unaudited) - USD ($)	Total	Series A Preferred Stock [Member]	Series B Preferred Stock [Member]	Series C Preferred Stock [Member]	Common Stock Shares	AdditionalPaid-in Capital	Accumulated Deficit
Balance, Shares at Dec. 31, 2017		1,000	16,155		38,776,436
Balance, Amount at Dec. 31, 2017	$ (9,461,710)	$ 1	$ 16		$ 38,776	$ 20,537,950	$ (30,038,453)
Redeem Series A preferred shares, Shares		(1,000)
Redeem Series A preferred shares, Amount		$ (1)				1
Net income	1,374,757						1,374,757
Balance, Shares at Jun. 30, 2018			16,155		38,776,436
Balance, Amount at Jun. 30, 2018	(8,086,953)		$ 16		$ 38,776	20,537,951	(28,663,696)
Balance, Shares at Dec. 31, 2018			16,155	36,000	40,750,040
Balance, Amount at Dec. 31, 2018	(12,673,490)		$ 16	$ 36	$ 40,750	25,492,975	(38,207,267)
Issuance of common stock for conversion of notes payable and accrued interest payable, Shares					32,706,820
Issuance of common stock for conversion of notes payable and accrued interest payable, Amount	159,071				$ 32,707	126,364
Net income	2,720,407						2,720,407
Balance, Shares at Jun. 30, 2019			16,155	36,000	73,456,860
Balance, Amount at Jun. 30, 2019	$ (9,794,012)		$ 16	$ 36	$ 73,457	$ 25,619,339	$ (35,486,860)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities
Net income	$ 2,720,407	$ 1,374,757
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	14,030	674
Amortization of debt discount to interest expense	362,766	425,959
Gain on change in derivative liabilities	(3,603,372)	(2,264,923)
Changes in assets and liabilities:
Increase in accounts receivable	(13,717)
Increase in prepaid expenses	(16,696)	(13,394)
Increase (decrease) in:
Accounts payable	18,136	11,118
Accrued expenses	(12,438)	(262)
Accrued interest, notes payable	118,034	86,141
Deferred revenue	1,796
Net cash used in operating activities	(411,054)	(379,930)
Cash flows from investing activities
Cash flows from financing activities:
Proceeds from convertible notes payable	392,000	380,500
Net cash provided by financing activities	392,000	380,500
Net increase (decrease) in cash	(19,054)	570
Cash, beginning of period	56,414	23,461
Cash, end of period	37,360	24,031
Supplemental Disclosure:
Cash paid for income taxes
Cash paid for interest	1,876
Non-cash financing and investing activities:
Debt discount for derivative liabilities	392,000	380,500
Common shares issued in conversion of debt	159,071
Redemption of Series A preferred stock		1
Increase in other assets and operating lease liability	$ 18,352

XML

ORGANIZATION AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2019

ORGANIZATION AND BASIS OF PRESENTATION

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

Digital Locations, Inc. (the “Company”) was incorporated in the State of Nevada on August 25, 2006 as Zingerang, Inc. On April 2, 2007, the Company changed its name to Carbon Sciences, Inc. and on November 14, 2017, the Company changed its name to Digital Locations, Inc.

On November 30, 2018, the Company entered into an Agreement and Plan of Merger ( the “Merger”) pursuant to which EllisLab, Inc., an S Corporation owned 100% by Rick Ellis that builds software for web professionals and provides related support services, merged with and into EllisLab Corp., a newly-formed subsidiary of the Company.

Basis of Presentation

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three months and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. For further information refer to the financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2018.

Going Concern

The accompanying financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. As of June 30, 2019, our current liabilities exceeded our current assets by $9,919,279 and we had a total stockholders’ deficit of $9,794,012. In addition, prior to the Merger in November 2018, the Company did not generate any revenue, and has reported negative cash flows from operations since inception. The Company currently does not have the cash resources to meet its operating commitments for the next twelve months and expects to have ongoing requirements for capital investment to implement its business plan. These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern for a reasonable period of time.

The ability of the Company to continue as a going concern is dependent upon, among other things, raising additional capital. The Company has obtained operating funds primarily from the issuance of convertible debt. Management believes this funding will continue and will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the development of the recently acquired EllisLab business. There can be no assurance, however, that the Company will be successful in accomplishing its objectives. Without such additional capital we may be required to cease operations. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of the Company are disclosed in Note 2 to the Notes to Financial Statements included in the Companys Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2019. The following summary of significant accounting policies of the Company is presented to assist in understanding the Companys interim financial statements. The financial statements and notes are representations of the Companys management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment and intangible assets, operating lease obligations, impairment of assets, the deferred tax valuation allowance, the fair value of stock options and derivative liabilities. Actual results could differ from those estimates.

Consolidation

The accompanying consolidated financial statements include the accounts of the Company and, effective December 1, 2018, the accounts of EllisLab Corp., its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Property and Equipment

The Companys property and equipment is stated at cost, and is depreciated using the straight-line method over the estimated useful life of the related asset as follows:

Computer equipment	3-5 years
Office furniture and equipment	7 years

Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

The Company assesses the recoverability of property and equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

Intangible Assets

Intangible assets consist primarily of intellectual property, customer base, trade-names/marks and non-compete agreements acquired in the Merger, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Derivative Liabilities

We have identified the conversion features of our convertible notes payable and Series B preferred stock and certain stock options as derivatives. Where the number of warrants or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional warrants and convertible debt and equity are included in the value of the derivatives. We estimate the fair value of the derivatives using the Black-Scholes pricing model and a multinomial lattice model based on projections of various potential future outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to managements judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments, require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of June 30, 2019, and December 31, 2018, the Company believes the amounts reported for cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable, deferred revenue, and convertible notes payable approximate fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (FASB) Accounting Standards Update (ASC) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

· Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

· Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

· Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial instruments at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis are as follows at June 30, 2019 and December 31, 2018:

	Total		Level 1		Level 2		Level 3
June 30, 2019:
Derivative liabilities	$	7,069,101	$	-	$	-	$	7,069,101
Total liabilities measured at fair value	$	7,069,101	$	-	$	-	$	7,069,101
December 31, 2018:
Derivative liabilities	$	10,363,105	$	-	$	-	$	10,363,105
Total liabilities measured at fair value	$	10,363,105	$	-	$	-	$	10,363,105

During the six months ended June 30, 2019, the Company had the following activity in its derivative liabilities account:

	Convertible Notes Payable			Series B Preferred Stock		Stock Options			Total
Derivative liabilities at December 31, 2018	$	7,809,054		$	2,339,898	$	214,153		$	10,363,105
Addition to liabilities for new debt/shares issued		392,000			-		-			392,000
Elimination of liabilities for debt conversions		(82,632	)		-		-			(82,632	)
Change in fair value		(3,614,742	)		107,315		(95,945	)		(3,603,372	)
Derivative liabilities at June 30, 2019	$	4,503,680		$	2,447,213	$	118,208		$	7,069,101

Revenue Recognition

On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition (Topic 605). The Company had no operating revenues prior to the Merger. Effective December 1, 2018, the Companys revenues are derived primarily from the sale of monthly and annual tech support subscriptions and partnership fees, and from software applications that customers purchase via the Companys online store. Sales are processed using a real-time payment processing company. Revenue from product sales is recorded net of processing costs.

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

· identification of the contract, or contracts, with a customer;

· identification of the performance obligations in the contract;

· determination of the transaction price;

· allocation of the transaction price to the performance obligations in the contract; and

· recognition of revenue when, or as, we satisfy a performance obligation.

Amounts collected from customers for support subscriptions and partnership fees with a contract life of one month or greater are recorded as deferred revenue and recognized over the life of the contract.

Income (Loss) per Share

Basic net income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding. Diluted net income or loss per common share is computed by dividing net income or loss by the sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents then outstanding. Potential dilutive common share equivalents consist of shares issuable upon the exercise of outstanding stock options and warrants to acquire common stock, using the treasury stock method and the average market price per share during the period, and shares issuable upon exercise of convertible notes payable and convertible preferred stock.

Basic weighted average number common shares outstanding are reconciled to diluted weighted average number of common shares outstanding as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Basic weighted average number of shares		50,774,989		38,776,436		46,084,995		38,776,436
Dilutive effect of:
Stock options		-		-		-		-
Series B preferred stock		-		-		576,964,286		359,000,000
Series C preferred stock		-		-		720,000,000		-
Convertible notes payable		-		-		2,101,989,575		827,095,928
Diluted weighted average number of shares		50,774,989		38,776,436		3,445,038,856		1,224,872,364

Operating Lease

On September 5, 2017, we entered into an operating sublease for office space. The base rent for the sublease is $1,000 per month for a period of one year and month-to-month thereafter.

On January 1, 2019, we adopted Financial Accounting Standards Board (FASB) ASC 842, Leases. ASC 842 requires recognition of assets and liabilities for the rights and obligations created by leases and new disclosures about leases. We adopted ASC 842 using the optional modified retrospective transition method. Under this transition method, we did not recast the prior period financial statements presented.

The adoption of ASC 842 resulted in the measurement and recognition of an operating lease liability and corresponding right-of use asset (included in other assets) in the amount of $18,352 as of January 1, 2019. The operating lease liability was measured as the present value of assumed remaining lease payments using an estimated incremental borrowing rate. We amortize the right-of-use asset over the term of the lease.

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued by the FASB during the six months ended June 30, 2019 and through the date of filing of this report that the Company believes will have a material impact on its financial statements.

Reclassifications

Certain amounts in the condensed financial statements for the three months and six months ended June 30, 2018 have been reclassified to conform to the presentation for the three months and six months ended June 30, 2019.

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MERGER

6 Months Ended

Jun. 30, 2019

MERGER

3. MERGER

On November 30, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with the EllisLab, Inc., Rick Ellis (“Ellis”), and EllisLab Corp., a newly formed Nevada corporation and wholly owned subsidiary of the Company, pursuant to which EllisLab, Inc. merged with and into EllisLab Corp. (the “Merger”). Pursuant to the terms of the Merger Agreement, Ellis received 36,000 shares of the Company’s newly designated Series C Convertible Preferred, with a stated value of $100 per share, in exchange for the cancellation of all common shares of EllisLab, Inc. owned by Ellis, which shares represented 100% of the issued and outstanding capital stock of EllisLab, Inc. The separate legal existence of EllisLab, Inc. ceased, and EllisLab Corp. became the surviving company.

Pursuant to the Merger Agreement, Ellis has agreed to a covenant not to compete for a period of 2 years following the effective date of the Merger (the “Non-Competition Period”). Ellis further agreed that during the Non-Competition Period, he will not directly or indirectly solicit or agree to service for his benefit or the benefit of any third-party, any of the Company’s, Digital Locations, or EllisLab Corp. customers.

Pursuant to the Merger Agreement, during the period beginning on the effective date and ending on the 24 month anniversary thereof, Ellis will not directly or indirectly, (i) offer, sell, offer to sell, contract to sell, hedge, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or sell, or otherwise transfer or dispose of, any portion of the Series C preferred shares, or any shares of the Company’s common stock underlying the preferred shares, beneficially owned, within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934.

Each of the parties to the Merger Agreement has made customary representations and warranties in the Merger Agreement.

On November 30, 2018, in connection with and pursuant to the Merger Agreement, the Company entered into a Nonstatutory Stock Option Agreement (the “Option Agreement”) with Derek Jones (“Jones”), whereby the Company issued to Jones an option to purchase 100,000,000 shares of the Common stock of the Company, at an exercise price of $0.005, in exchange for his surrender of an option to purchase 10% of the shares of outstanding common stock of EllisLab, Inc. The option is vested but may not be exercised for 2 years from the date of the Merger. The option contains a blocker that prevents Jones from exercising the Option if such exercise would result in beneficial ownership of more than 4.99% of the outstanding shares of the Company’s stock, without at least 61 days of prior notice. Under the Option, Jones is also subject to the Rule 144 restrictions of an affiliate.

The acquisition of EllisLab, Inc. in the Merger has been accounted for as a purchase, and the accounts of EllisLab Corp. are consolidated with those of the Company as of December 1, 2018. The Company engaged an independent valuation firm to estimate the value of the consideration paid by the Company in the Merger, consisting of the issuance of 36,000 shares of the Company’s $0.001 par value Series C Preferred Stock to Ellis, valued at $4,345,866, and 100,000,000 stock options to purchase common shares of the Company to Jones, valued at $599,998.

Based on the report of the independent valuation firm, the total value of the consideration paid of $4,945,864 has been allocated as follows:

Cash	$	35,822
Accounts receivable		22,235
Property and equipment, net		4,271
Accounts payable		(74,680	)
Accrued expenses		(14,176	)
Deferred revenue		(27,037	)
Loans payable		(60,000	)
Net liabilities		(113,565	)
Intangible assets:
Intellectual property		37,000
Customer base		79,000
Trade-name/marks		8,000
Non-compete agreements		1,000
Goodwill		4,934,429
Total	$	4,945,864

At December 31, 2018, the Company reviewed the goodwill recorded in the Merger and determined that an impairment expense of $4,934,429 was required.

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PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2019

PROPERTY AND EQUIPMENT

4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	June 30, 2019			December 31, 2018
Computer equipment	$	49,605		$	49,605
Office furniture and equipment		8,751			8,751
Total		58,356			58,356
Less accumulated depreciation		(54,693	)		(53,163	)
Net	$	3,663		$	5,193

Depreciation expense was $868 and $337 for the three months ended June 30, 2019 and 2018, respectively and $1,530 and $674 for the six months ended June 30, 2019 and 2018, respectively.

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INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2019

INTANGIBLE ASSETS

5. INTANGIBLE ASSETS

Intangible assets were acquired in the Merger and consisted of the following

	June 30, 2019			December 31, 2018
Intellectual property	$	37,000		$	37,000
Customer base		79,000			79,000
Trade-name/marks		8,000			8,000
Non-compete agreements		1,000			1,000
Total		125,000			125,000
Less accumulated amortization		(14,583	)		(2,083	)
Net	$	110,417		$	122,917

Amortization expense was $6,250 and $0 for the three months ended June 30, 2019 and 2018, respectively and $12,500 and $0 for the six months ended June 30, 2019 and 2018, respectively.

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CONVERTIBLE NOTES PAYABLE

6 Months Ended

Jun. 30, 2019

CONVERTIBLE NOTES PAYABLE

6. CONVERTIBLE NOTES PAYABLE

Convertible Promissory Note – Accounts Payable of $29,500

On March 14, 2013, we entered into an agreement to issue a 5% convertible promissory note in the principal amount of $29,500, which is convertible into shares of our common stock at a conversion price equal to the lesser of $1.50 per share or the closing price per share of common stock recorded on the trading day immediately preceding the date of conversion. The note, with a principal balance of $29,500 at June 30, 2019, matured on March 14, 2015, and is currently in default.

Convertible Promissory Notes – Related Parties of $58,600

On December 31, 2012, we issued 5% convertible promissory notes to two employees in exchange for services rendered in the aggregate amount of $58,600. The notes are convertible into shares of our common stock at a conversion price equal to the lesser of $2.00 per share or the closing price per share of common stock recorded on the trading day immediately preceding the date of conversion. We recorded a total debt discount of $57,050 related to the conversion feature of the notes, which has been fully amortized to interest expense, along with a derivative liability at inception. One of the notes with a principal balance of $25,980 at June 30, 2019, matured on December 31, 2014 and is currently in default. The maturity date of a second note with a principal balance of $32,620 at June 30, 2019 has been extended to December 31, 2019.

March 2016 Convertible Promissory Note – $1,000,000

On March 4, 2016, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $1,000,000 (the “March 2016 $1,000,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note initially matured, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from March 4, 2016.

On March 14, 2016, we received proceeds of $27,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $27,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense. During the six months ended June 30, 2019, we issued the lender a total of 5,925,853 shares of our common stock in consideration for the conversion of principal of $6,810 and accrued interest of $2,079, resulting in a principal balance of $17,385 at June 30, 2019.

On March 17, 2016, we received proceeds of $33,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On April 11, 2016, we received proceeds of $90,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $90,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On May 20, 2016, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On June 22, 2016, we received proceeds of $50,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $50,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On July 6, 2016, we received proceeds of $87,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $87,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On August 8, 2016, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On September 13, 2016, we received proceeds of $55,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On October 17, 2016, we received proceeds of $55,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On November 8, 2016, we received proceeds of $55,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On December 6, 2016, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On January 10, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On February 13, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On March 9, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On April 12, 2017, we received proceeds of $95,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $95,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On May 8, 2017, we received proceeds of $60,000 pursuant to the March 2016 $1,000,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

June 2017 Convertible Promissory Note – $500,000

On June 2, 2017, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the “June 2017 $500,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note initially matured, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from June 2, 2017.

On June 2, 2017, we received proceeds of $60,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On July 10, 2017, we received proceeds of $80,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $80,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On August 11, 2017, we received proceeds of $80,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $80,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On September 12, 2017, we received proceeds of $85,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $85,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On October 13, 2017, we received proceeds of $80,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $80,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On November 8, 2017, we received proceeds of $75,000 pursuant to the June 2017 $500,000 CPN. We recorded a debt discount of $75,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

December 2017 Convertible Promissory Note – $500,000

On December 14, 2017, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the “December 2017 $500,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note initially matured, with respect to each advance, one year from the effective date of each advance. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from December 14, 2017.

On December 14, 2017, we received proceeds of $60,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. The debt discount has been fully amortized to interest expense.

On January 11, 2018, we received proceeds of $70,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $70,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $2,110 and the debt discount has been fully amortized to interest expense.

On February 7, 2018, we received proceeds of $60,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $6,247 and the debt discount has been fully amortized to interest expense.

On March 8, 2018, we received proceeds of $55,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $55,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $10,096 and the debt discount has been fully amortized to interest expense.

On March 14, 2018, we received proceeds of $6,500 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $6,500 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $1,300 and the debt discount has been fully amortized to interest expense.

On April 9, 2018, we received proceeds of $77,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $77,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $20,885 and the debt discount has been fully amortized to interest expense.

On May 7, 2018, we received proceeds of $60,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $60,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $20,877 and the debt discount has been fully amortized to interest expense.

On June 7, 2018, we received proceeds of $52,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $52,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $22,500, and the debt discount has been fully amortized to interest expense.

On July 10, 2018, we received proceeds of $35,000 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $35,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $17,356, resulting in a remaining debt discount of $959 as of June 30, 2019.

On August 16, 2018, we received proceeds of $24,500 pursuant to the December 2017 $500,000 CPN. We recorded a debt discount of $24,500 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $12,149, resulting in a remaining debt discount of $3,155 as of June 30, 2019.

August 2018 Convertible Promissory Note – $500,000

On August 17, 2018, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the “August 2018 $500,000 CPN”). The lender may advance the Company consideration for the note in such amounts as the lender may choose in its sole discretion. The note is convertible into shares of our common stock at a price per share equal to the lesser of: $0.01; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note. The note matures, with respect to each advance, one year from the effective date of each advance.

On August 17, 2018, we received proceeds of $10,500 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $10,500 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $5,207, resulting in a remaining debt discount of $1,381 as of June 30, 2019.

On September 13, 2018, we received proceeds of $30,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $14,877, resulting in a remaining debt discount of $6,164 as of June 30, 2019.

On October 8, 2018, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $12,397, resulting in a remaining debt discount of $6,850 as of June 30, 2019.

On October 26, 2018, we received proceeds of $12,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $12,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $5,951, resulting in a remaining debt discount of $3,879 as of June 30, 2019.

On November 5, 2018, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $12,397, resulting in a remaining debt discount of $8,767 as of June 30, 2019.

On November 28, 2018, we received proceeds of $30,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $14,877, resulting in a remaining debt discount of $12,411 as of June 30, 2019.

On November 30, 2018, we received proceeds of $10,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $10,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $4,959, resulting in a remaining debt discount of $4,192 as of June 30, 2019.

On December 24, 2018, we received proceeds of $50,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $50,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $24,795, resulting in a remaining debt discount of $24,246 as of June 30, 2019.

On January 17, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $11,253, resulting in a remaining debt discount of $13,767 as of June 30, 2019.

On February 25, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $8,562, resulting in a remaining debt discount of $16,438 as of June 30, 2019.

On March 22, 2019, we received proceeds of $25,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $6,831, resulting in a remaining debt discount of $18,169 as of June 30, 2019.

On March 26, 2019, we received proceeds of $15,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $15,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $3,934, resulting in a remaining debt discount of $11,066 as of June 30, 2019.

On April 11, 2019, we received proceeds of $15,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $15,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $3,279, resulting in a remaining debt discount of $11,721 as of June 30, 2019.

On April 19, 2019, we received proceeds of $65,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $65,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $12,787, resulting in a remaining debt discount of $52,213 as of June 30, 2019.

On June 28, 2019, we received proceeds of $30,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $30,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $164, resulting in a remaining debt discount of $29,836 as of June 30, 2019.

November 23, 2018 Convertible Promissory Note – $33,000

Effective November 23, 2018, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures November 23, 2019. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $29,564, and the debt discount has been fully amortized to interest expense. During the six months ended June 30, 2019, we issued the lender a total of 10,690,179 shares of our common stock in consideration for the conversion of principal of $33,000 and accrued interest of $1,650, extinguishing the note in full.

December 5, 2018 Convertible Promissory Note – $33,000

Effective December 5, 2018, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures December 5, 2019. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $30,612, resulting in a remaining debt discount of $37 as of June 30, 2019. During the six months ended June 30, 2019, we issued the lender a total of 16,090,758 shares of our common stock in consideration for the conversion of principal of $32,900, resulting in a principal balance of $100 as of June 30, 2019.

January 25, 2019 Convertible Promissory Note – $38,000

Effective January 25, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $38,000. The note matures January 25, 2020. The Company received proceeds of $35,000 after an original issue discount of $1,500 and payment of $1,500 in legal fees. The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $38,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $16,241, resulting in a remaining debt discount of $21,759 as of June 30, 2019.

February 13, 2019 Convertible Promissory Note – $38,000

Effective February 13, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $38,000. The note matures February 13, 2020. The Company received proceeds of $35,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $38,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $14,263, resulting in a remaining debt discount of $23,737 as of June 30, 2019.

March 25, 2019 Convertible Promissory Note – $35,000

Effective March 25, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $35,000. The note matures March 25, 2020. The Company received proceeds of $32,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $35,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $9,276, resulting in a remaining debt discount of $25,724 as of June 30, 2019.

May 23, 2019 Convertible Promissory Note – $33,000

Effective May 23, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures May 23, 2020. The Company received proceeds of $30,000 after an original issue discount of $1,750 and payment of $1,250 in legal fees. The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $3,426, resulting in a remaining debt discount of $29,574 as of June 30, 2019.

May 24, 2019 Convertible Promissory Note – $33,000

Effective May 24, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures May 24, 2020. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $3,336, resulting in a remaining debt discount of $29,664 as of June 30, 2019.

June 27, 2019 Convertible Promissory Note – $33,000

Effective June 27, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $33,000. The note matures June 27, 2020. The Company received proceeds of $30,000 after payment of $3,000 of the fees and expenses of the lender and its counsel. The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the six months ended June 30, 2019, amortization of debt discount was recorded to interest expense in the amount of $270, resulting in a remaining debt discount of $32,730 as of June 30, 2019.

Total accrued interest payable on notes payable was $457,057 and $342,752 as of June 30, 2019 and December 31, 2018, respectively.

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CAPITAL STOCK

6 Months Ended

Jun. 30, 2019

CAPITAL STOCK

7. CAPITAL STOCK

At June 30, 2019, the Company’s authorized stock consisted of 2,000,000,000 shares of common stock, with a par value of $0.001 per share. The Company is also authorized to issue 20,000,000 shares of preferred stock, with a par value of $0.001 per share. The rights, preferences and privileges of the holders of the preferred stock will be determined by the Board of Directors prior to issuance of such shares.

Series B Preferred Stock

On March 2, 2016, the Company filed a Certificate of Designation for its Series B Preferred Stock (the “Series B Certificate”) with the Secretary of State of Nevada designating 30,000 shares of its authorized preferred stock as Series B Preferred Stock. The shares of Series B Preferred Stock have a par value of $0.001 per share.

The total face value of this entire series is three million dollars ($3,000,000). Each share of Series B Preferred Stock has a stated face value of One Hundred Dollars ($100) (“Share Value”) and is convertible into shares of fully paid and non-assessable shares of common stock of the Company.

As of June 30, 2019, and December 31, 2018, the Company had 16,155 shares of Series B Preferred Stock outstanding, with a face value of $1,615,500. These shares were issued in March 2016 for the redemption and cancellation of $1,615,362 of convertible promissory notes and $264,530 of accrued interest payable.

The holders of outstanding shares of the Series B Preferred Stock (the “Series B Holders”) are entitled to receive dividends pari passu with the holders of Common Stock, except upon a liquidation, dissolution and winding up of the Company, in which case the Series B Preferred Stock has a preference. Such dividends will be paid equally to all outstanding shares of Series B Preferred Stock and Common Stock, on an as-if-converted basis with respect to the Series B Preferred Stock. The Series B Holders may elect to use the most favorable conversion price for the purpose of determining the as-if-converted number of shares.

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Series B Holder shall be entitled to receive, out of the assets of the Company available for distribution to its shareholders upon such liquidation, whether such assets are capital or surplus of any nature, an amount equal to one hundred dollars ($100) for each such share of the Series B Preferred Stock (as adjusted for any combinations, consolidations, stock distributions, stock splits or stock dividends with respect to such shares), plus all dividends, if any, declared and unpaid thereon as of the date of such distribution, before any payment is made or any assets distributed to the holders of the Common Stock. After such payment, the remaining assets of the Company will be distributed to the holders of Common Stock.

If the assets to be distributed to the Series B Holders are insufficient to permit the receipt by such Holders of the full preferential amounts, then all of such assets will be distributed among such Holders ratably in accordance with the number of such shares then held by each such Holder.

The sale of all or substantially all of the Company’s assets, any consolidation or merger of the Company with or into any other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than fifty percent (50%) of the Company’s voting power immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred, excluding any consolidation or merger effected exclusively to change the domicile of the Company, is deemed to be a liquidation, dissolution or winding up.

The Series B Preferred Stock is convertible into Common Stock.

The Series B Holder has the right, at any time, at its election, to convert all or part of the Share Value into shares of Common Stock. The conversion price is the lesser of (1) Fifty Percent (50%) of the lowest trade price of Common Stock recorded on any trade day after December 12, 2012 or (2) the lowest effective price per share granted to any person or entity, including the Series B Holder but excluding officers and directors of the Company, to acquire Common Stock, or adjusted, whether by operation of purchase price adjustment, settlement agreements, exchange agreements, reset provision, floating conversion or otherwise, any outstanding warrant, option or other right to acquire Common Stock or outstanding Common Stock equivalents (the “Conversion Price”).

The conversion formula is as follows: The number of shares receivable upon conversion equals the Share Value divided by the Conversion Price. A conversion notice (the “Conversion Notice”) may be delivered to Company by any method of the Series B Holder’s choice (including but not limited to email, facsimile, mail, overnight courier, or personal delivery), and all conversions will be cashless and not require further payment from the Holder. If no objection is delivered from the Company to the Series B Holder, with respect to any variable or calculation reflected in the Conversion Notice, within 24 hours of delivery of the Conversion Notice, the Company will thereafter be deemed to have irrevocably confirmed and ratified such notice of conversion and waived any objection. The Company will deliver the shares of Common Stock from any conversion to the Series B Holder (in any name directed by the Series B Holder) within three (3) business days of Conversion Notice delivery. If the Company is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, then upon request of the Holder and provided that the shares to be issued are eligible for transfer under Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), or are effectively registered under the Securities Act, the Company will cause its transfer agent to electronically issue the Common Stock issuable upon conversion to the Holder through the DTC Direct Registration System (“DRS”). If the Company is not participating in the DTC FAST program, then the Company agrees in good faith to apply and cause the approval for participation in the DTC FAST program.

The Conversion Price is subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events. No fractional shares of the Common Stock shall be issuable upon the conversion of shares of the Series B Preferred Stock and the Company shall pay the cash equivalent of any fractional share upon such conversion.

If the Company fails to deliver shares in accordance with the required time frame, then for each conversion, a penalty of $1,500 per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery is made. Such penalty may be converted into Common Stock at the Conversion Price or payable in cash, at the sole option of the Series B Holder (under the Holder’s and the Company’s expectations that any penalty amounts shall tack back to the original date of the issuance of Series B Preferred Stock, consistent with applicable securities laws).

In no event will the Series B Holder be entitled to convert any Series B Preferred Stock, such that upon conversion the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of this Series B Preferred Stock or the unexercised or unconverted portion of any other security of the Company subject to a limitation on conversion or exercise analogous to these limitations), and (2) the number of shares of Common Stock issuable upon the conversion of Series B Preferred Stock, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. The limitations on conversion may be waived by the Holder upon, at the election of the Series B Holder, not less than 61 days prior notice to the Company, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Series B Holder, as may be specified in such notice of waiver).

Except as required by law, the Series B Holders are not entitled to vote, as a separate class or otherwise, on any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting). Each Holder of outstanding shares of Series B Preferred Stock will be entitled, on the same basis as holders of Common Stock, to receive notice of such action or meeting.

So long as any shares of the Series B Preferred Stock remain outstanding, the Company will not, without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock voting together as one class: (a) alter or change the rights, preferences or privileges of the shares of the Series B Preferred Stock so as to affect materially and adversely such shares; or (b) create any new class of shares having preference over the Series B Preferred Stock.

The Series B Holder has the right, at its sole discretion, to elect a fixed conversion price for the Series B Preferred Stock. The Fixed Conversion Price may not be lower than the Conversion Price. The Company will not, by amendment of its Certificate of Incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the Series B Certificate, and will at all times carry out all the provisions of the Series B Certificate.

Series C Preferred Stock

In November 2018, the Company filed a Certificate of Designation for its Series C Preferred Stock (the “Series C Certificate”) with the Secretary of State of Nevada designating 36,000 shares of its authorized preferred stock as Series C Preferred Stock. The shares of Series C Preferred Stock have a par value of $0.001 per share. The total face value of this entire series is three million dollars ($3,600,000). Each share of Series C Preferred Stock has a stated face value of One Hundred Dollars ($100) (“Share Value”) and is convertible into shares of fully paid and non-assessable shares of common stock of the Company.

As discussed in Note 3, the Company issued 36,000 shares of Series C Preferred Stock to the owner of the common stock of EllisLab, Inc. in the Merger, which shares were outstanding at June 30, 2019 and December 31, 2018.

The holders of outstanding shares of the Series C Preferred Stock (the “Series C Holders”) shall be entitled to receive dividends pari passu (on a pro rata basis) with the holders of Series B Preferred Stock and Common Stock, except upon a liquidation, dissolution and winding up of the Company. Such dividends shall be paid equally to all outstanding shares of Series C Preferred Stock, Series B Preferred Stock and Common Stock, on an as-if-converted basis with respect to the Series C Preferred Stock and Series B Preferred Stock.

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Holder of each outstanding share of the Series C Preferred Stock shall be entitled to receive, on a pro rata basis with the outstanding Series B Preferred Stock, out of the assets of the Company available for distribution to its shareholders upon such liquidation, whether such assets are capital or surplus of any nature, an amount equal to one hundred dollars ($100.00) for each such share of the Series C Preferred Stock (as adjusted for any combinations. consolidations, stock distributions, stock splits or stock dividends with respect to such shares), plus all dividends, if any, declared and unpaid thereon as of the date of such distribution, before any payment shall be made or any assets distributed to the holders of the Common Stock, and, after such payment, the remaining assets of the Company shall be distributed to the holders of Common Stock.

Each share of Series C Preferred Stock is convertible into twenty thousand (20,000) shares of the Company’s fully paid and nonassessable shares of Common Stock, as adjusted. The Series C Preferred Stock shall contain the respective rights, privileges and designations as are set forth in the Certificate of Designations, Preferences, Rights and Limitations of Series C Preferred Stock appended hereto as Exhibit 4.1. The Series C contains a blocker that prevents the Holder from converting the Series C Preferred if such exercise would result in beneficial ownership of more than 4.99% of the outstanding shares of the Company’s stock, without at least 61 days of prior notice. Under the Series C Preferred Stock, the Holder is also subject to the Rule 144 restrictions of an affiliate.

Except as required by law or as specifically provided in the Certificate of Designation, the Series C Holders shall not be entitled to vote, as a separate class or otherwise, on any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting); provided, however, that each Series C Holder shall be entitled, on the same basis as holders of Common Stock, to receive notice of such action or meeting.

Common Stock

On April 20, 2016, the Company amended its articles of incorporation to reduce the number of authorized shares of common stock from 1,000,000,000 to 100,000,000 and to affect a one-for-ten reverse stock split of its authorized, issued and outstanding shares of common stock. The Company has given retroactive affect for the reverse stock split in all periods presented in the accompanying financial statements.

On April 29, 2016, our Board of Directors and the holder of a majority of the total issued and outstanding voting stock of the Company authorized and approved an amendment to the Company’s articles of incorporation to increase the number of authorized shares of common stock from 100,000,000 to 2,000,000,000.

As of June 30, 2019, and December 31, 2018, the Company had 73,456,860 and 40,750,040 shares of common stock issued and outstanding, respectively.

During the six months ended June 30, 2019, the Company issued a total of 32,706,820 shares of common stock at fair value in consideration for the conversion of $72,710 of convertible promissory notes and accrued interest payable of $3,729. In connection with the debt conversions, the Company reduced derivative liabilities by $82,632. There was no gain or loss on settlement of debt due to the conversions occurring within the terms of the convertible note.

During the six months ended June 30, 2018, the Company did not issue any shares of common stock.

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STOCK OPTIONS AND WARRANTS

6 Months Ended

Jun. 30, 2019

STOCK OPTIONS AND WARRANTS

8. STOCK OPTIONS AND WARRANTS

As of June 30, 2019, the Board of Directors of the Company had granted non-qualified stock options and warrants exercisable for a total of 141,405,000 shares of common stock to its employees, officers, and consultants.

As further discussed in Note 3, on November 30, 2018 in connection with the Merger, the Company issued a ten-year option to purchase 100,000,000 shares of common stock of the Company, at an exercise price of $0.005. The option vested upon grant but may not be exercised for 2 years from the date of the Merger. Stock-based compensation of $599,998, measured at the grant date using a multinomial lattice model, was included in the purchase price recorded in the Merger and recorded to additional paid-in capital.

On November 30, 2018, the Company also issued ten-year warrants to two consultants to purchase a total of 40,000,000 shares of common stock of the Company, at an exercise price of $0.005. The warrants vested upon grant but may not be exercised for 2 years from the date of issuance. Stock-based compensation of $188,127, measured at the grant date using a multinomial lattice model, was included in general and administrative expenses and recorded to derivative liabilities due to the existence of a tainted equity environment.

We recognized no stock-based compensation expense for the three months and six months ended June 30, 2019 and 2018.

As of June 30, 2019, we had no unrecognized stock-based compensation expense.

A summary of the Company’s stock options and warrants as of June 30, 2019, and changes during the six months then ended is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018		141,406,250		$	0.006		9.84
Granted		-		$	-
Exercised		-		$	-
Forfeited or expired		(1,250	)	$	14.80
Outstanding at June 30, 2019		141,405,000		$	0.006		9.35	$	-

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the closing price of our common stock of $0.0028 as of June 30, 2019, which would have been received by the holders of in-the-money options and warrants had the holders exercised their options and warrants as of that date.

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DERIVATIVE LIABILITIES

6 Months Ended

Jun. 30, 2019

DERIVATIVE LIABILITIES

9. DERIVATIVE LIABILITIES

The fair value of the Company’s derivative liabilities is estimated at the issuance date and is revalued at each subsequent reporting date. We estimate the fair value of derivative liabilities associated with our convertible notes payable, Series B preferred stock and warrants using a multinomial lattice model based on projections of various potential future outcomes. Where the number of warrants or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional warrants and convertible debt and equity are included in the value of the derivatives.

The significant assumptions used in the valuation of the derivative liabilities at June 30, 2019 are as follows:

Conversion to stock	Monthly
Stock price on the valuation date	$	0.0028
Conversion price	$	2.00 - $0.0015
Risk free interest rates		0.91% - 2.71	%
Years to maturity		15.0
Expected volatility		111%–392	%

The value of our derivative liabilities was estimated as follows at:

	June 30, 2019		December 31, 2018
Convertible notes payable	$	4,503,680	$	7,809,054
Series B preferred stock		2,447,213		2,339,898
Warrants		118,208		214,153
Total	$	7,069,101	$	10,363,105

The calculation input assumptions are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liability will fluctuate from period to period, and the fluctuation may be material.

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OPERATING LEASE

6 Months Ended

Jun. 30, 2019

OPERATING LEASE

10. OPERATING LEASE

On September 5, 2017, we entered into an operating sublease for office space. The base rent for the sublease is $1,000 per month for a period of one year and month-to-month thereafter. Management has assumed a three-year life for the sublease arrangement. On January 1, 2019, we adopted ASC 842, “Leases,” which resulted in the recognition of an operating lease liability and corresponding right-of use asset (“ROU”) (included in other assets) in the amount of $18,352.

As of June 30, 2019, the operating lease liability and ROU asset had a balance of $13,163. The current portion of the operating lease liability as of June 30, 2019 was $11,187.

For the six months ended June 30, 2019, the Company recognized operating lease cost of $6,000,

The table below reconciles the Company’s future cash obligations for the operating lease liability recorded on the consolidated balance sheet as June 30, 2019:

2019	$	6,000
2020		8,000
Total minimum lease payments		14,000
Less amount representing interest		(837	)
Present value of operating lease obligation	$	13,163

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2019

RELATED PARTY TRANSACTIONS

11. RELATED PARTY TRANSACTIONS

Pursuant to a written consulting agreement, dated May 31, 2013 and amended effective November 1, 2016, William E. Beifuss, Jr., our current President, Acting Chief Financial Officer and former Interim Chief Executive Officer , receives annual consulting fees of $120,000, of which $30,000 and $60,000 were paid in each of the three months and six months ended June 30, 2019 and 2018, respectively.

Effective December 1, 2018, Rick Ellis, Chief Executive Officer of the Company and Chief Executive Officer of EllisLab Corp., receives a monthly salary of $10,000, or $30,000 and $60,000 for the three months and six months ended June 30, 2019, respectively.

See Note 6 for discussion of convertible notes payable with related parties.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2019

SUBSEQUENT EVENTS

12. SUBSEQUENT EVENTS

Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has reported the following:

Subsequent Borrowings

We received an advance under the August 2018 $500,000 CPN of $40,000 on July 29, 2019.

Convertible Note Conversions

On July 1, 2019, a lender converted $100 principal and $1,650 accrued interest payable into 1,029,412 common shares of the Company.

On July 15, 2019, a lender converted $2,000 principal and $667 accrued interest payable into 2,319,476 common shares of the Company.

On August 8, 2019, a lender converted $4,386 principal and $250 in fees into 3,800,000 common shares of the Company.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment and intangible assets, operating lease obligations, impairment of assets, the deferred tax valuation allowance, the fair value of stock options and derivative liabilities. Actual results could differ from those estimates.

Consolidation

The accompanying consolidated financial statements include the accounts of the Company and, effective December 1, 2018, the accounts of EllisLab Corp., its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Property and Equipment

The Company’s property and equipment is stated at cost, and is depreciated using the straight-line method over the estimated useful life of the related asset as follows:

Computer equipment	3-5 years
Office furniture and equipment	7 years

Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

The Company assesses the recoverability of property and equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

Intangible Assets

Intangible assets consist primarily of intellectual property, customer base, trade-names/marks and non-compete agreements acquired in the Merger, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Derivative Liabilities

We have identified the conversion features of our convertible notes payable and Series B preferred stock and certain stock options as derivatives. Where the number of warrants or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional warrants and convertible debt and equity are included in the value of the derivatives. We estimate the fair value of the derivatives using the Black-Scholes pricing model and a multinomial lattice model based on projections of various potential future outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments, require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of June 30, 2019, and December 31, 2018, the Company believes the amounts reported for cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable, deferred revenue, and convertible notes payable approximate fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASC”) Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

· Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

· Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

· Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial instruments at fair value on a recurring basis. Liabilities measured at fair value on a recurring basis are as follows at June 30, 2019 and December 31, 2018:

	Total		Level 1		Level 2		Level 3
June 30, 2019:
Derivative liabilities	$	7,069,101	$	-	$	-	$	7,069,101
Total liabilities measured at fair value	$	7,069,101	$	-	$	-	$	7,069,101
December 31, 2018:
Derivative liabilities	$	10,363,105	$	-	$	-	$	10,363,105
Total liabilities measured at fair value	$	10,363,105	$	-	$	-	$	10,363,105

During the six months ended June 30, 2019, the Company had the following activity in its derivative liabilities account:

	Convertible Notes Payable			Series B Preferred Stock		Stock Options			Total
Derivative liabilities at December 31, 2018	$	7,809,054		$	2,339,898	$	214,153		$	10,363,105
Addition to liabilities for new debt/shares issued		392,000			-		-			392,000
Elimination of liabilities for debt conversions		(82,632	)		-		-			(82,632	)
Change in fair value		(3,614,742	)		107,315		(95,945	)		(3,603,372	)
Derivative liabilities at June 30, 2019	$	4,503,680		$	2,447,213	$	118,208		$	7,069,101

Revenue Recognition

On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition” (Topic 605). The Company had no operating revenues prior to the Merger. Effective December 1, 2018, the Company’s revenues are derived primarily from the sale of monthly and annual tech support subscriptions and partnership fees, and from software applications that customers purchase via the Company’s online store. Sales are processed using a real-time payment processing company. Revenue from product sales is recorded net of processing costs.

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

· identification of the contract, or contracts, with a customer;

· identification of the performance obligations in the contract;

· determination of the transaction price;

· allocation of the transaction price to the performance obligations in the contract; and

· recognition of revenue when, or as, we satisfy a performance obligation.

Amounts collected from customers for support subscriptions and partnership fees with a contract life of one month or greater are recorded as deferred revenue and recognized over the life of the contract.

Income (Loss) per Share

Basic net income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding. Diluted net income or loss per common share is computed by dividing net income or loss by the sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents then outstanding. Potential dilutive common share equivalents consist of shares issuable upon the exercise of outstanding stock options and warrants to acquire common stock, using the treasury stock method and the average market price per share during the period, and shares issuable upon exercise of convertible notes payable and convertible preferred stock.

Basic weighted average number common shares outstanding are reconciled to diluted weighted average number of common shares outstanding as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Basic weighted average number of shares		50,774,989		38,776,436		46,084,995		38,776,436
Dilutive effect of:
Stock options		-		-		-		-
Series B preferred stock		-		-		576,964,286		359,000,000
Series C preferred stock		-		-		720,000,000		-
Convertible notes payable		-		-		2,101,989,575		827,095,928
Diluted weighted average number of shares		50,774,989		38,776,436		3,445,038,856		1,224,872,364

Operating Lease

On September 5, 2017, we entered into an operating sublease for office space. The base rent for the sublease is $1,000 per month for a period of one year and month-to-month thereafter.

On January 1, 2019, we adopted Financial Accounting Standards Board (“FASB”) ASC 842, “Leases.” ASC 842 requires recognition of assets and liabilities for the rights and obligations created by leases and new disclosures about leases. We adopted ASC 842 using the optional modified retrospective transition method. Under this transition method, we did not recast the prior period financial statements presented.

The adoption of ASC 842 resulted in the measurement and recognition of an operating lease liability and corresponding right-of use asset (included in other assets) in the amount of $18,352 as of January 1, 2019. The operating lease liability was measured as the present value of assumed remaining lease payments using an estimated incremental borrowing rate. We amortize the right-of-use asset over the term of the lease.

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued by the FASB during the six months ended June 30, 2019 and through the date of filing of this report that the Company believes will have a material impact on its financial statements.

Reclassifications

Certain amounts in the condensed financial statements for the three months and six months ended June 30, 2018 have been reclassified to conform to the presentation for the three months and six months ended June 30, 2019.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

Schedule of Property and Equipment

Computer equipment	3-5 years
Office furniture and equipment	7 years

Fair Value Measurements, Assets and Liabilities, Recurring Basis

	Total		Level 1		Level 2		Level 3
June 30, 2019:
Derivative liabilities	$	7,069,101	$	-	$	-	$	7,069,101
Total liabilities measured at fair value	$	7,069,101	$	-	$	-	$	7,069,101
December 31, 2018:
Derivative liabilities	$	10,363,105	$	-	$	-	$	10,363,105
Total liabilities measured at fair value	$	10,363,105	$	-	$	-	$	10,363,105

Schedule of Derivative Liabilities at Fair Value

	Convertible Notes Payable			Series B Preferred Stock		Stock Options			Total
Derivative liabilities at December 31, 2018	$	7,809,054		$	2,339,898	$	214,153		$	10,363,105
Addition to liabilities for new debt/shares issued		392,000			-		-			392,000
Elimination of liabilities for debt conversions		(82,632	)		-		-			(82,632	)
Change in fair value		(3,614,742	)		107,315		(95,945	)		(3,603,372	)
Derivative liabilities at June 30, 2019	$	4,503,680		$	2,447,213	$	118,208		$	7,069,101

Schedule of weighted average number of shares

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Basic weighted average number of shares		50,774,989		38,776,436		46,084,995		38,776,436
Dilutive effect of:
Stock options		-		-		-		-
Series B preferred stock		-		-		576,964,286		359,000,000
Series C preferred stock		-		-		720,000,000		-
Convertible notes payable		-		-		2,101,989,575		827,095,928
Diluted weighted average number of shares		50,774,989		38,776,436		3,445,038,856		1,224,872,364

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MERGER (Tables)

6 Months Ended

Jun. 30, 2019

MERGER (Tables)

Summary of total allocated value of the consideration paid

Cash	$	35,822
Accounts receivable		22,235
Property and equipment, net		4,271
Accounts payable		(74,680	)
Accrued expenses		(14,176	)
Deferred revenue		(27,037	)
Loans payable		(60,000	)
Net liabilities		(113,565	)
Intangible assets:
Intellectual property		37,000
Customer base		79,000
Trade-name/marks		8,000
Non-compete agreements		1,000
Goodwill		4,934,429
Total	$	4,945,864

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PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2019

PROPERTY AND EQUIPMENT (Tables)

Property and equipment

	June 30, 2019			December 31, 2018
Computer equipment	$	49,605		$	49,605
Office furniture and equipment		8,751			8,751
Total		58,356			58,356
Less accumulated depreciation		(54,693	)		(53,163	)
Net	$	3,663		$	5,193

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INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2019

INTANGIBLE ASSETS (Tables)

Schedule of Finite-Lived Intangible Asset

	June 30, 2019			December 31, 2018
Intellectual property	$	37,000		$	37,000
Customer base		79,000			79,000
Trade-name/marks		8,000			8,000
Non-compete agreements		1,000			1,000
Total		125,000			125,000
Less accumulated amortization		(14,583	)		(2,083	)
Net	$	110,417		$	122,917

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STOCK OPTIONS AND WARRANTS (Tables)

6 Months Ended

Jun. 30, 2019

STOCK OPTIONS AND WARRANTS (Tables)

Schedule of Stock Options, Activity

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018		141,406,250		$	0.006		9.84
Granted		-		$	-
Exercised		-		$	-
Forfeited or expired		(1,250	)	$	14.80
Outstanding at June 30, 2019		141,405,000		$	0.006		9.35	$	-

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DERIVATIVE LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2019

DERIVATIVE LIABILITIES (Tables)

Schedule of derivative liabilities at fair value

Conversion to stock	Monthly
Stock price on the valuation date	$	0.0028
Conversion price	$	2.00 - $0.0015
Risk free interest rates		0.91% - 2.71	%
Years to maturity		15.0
Expected volatility		111%–392	%

Fair Value Inputs, Quantitative Information

	June 30, 2019		December 31, 2018
Convertible notes payable	$	4,503,680	$	7,809,054
Series B preferred stock		2,447,213		2,339,898
Warrants		118,208		214,153
Total	$	7,069,101	$	10,363,105

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OPERATING LEASE (Tables)

6 Months Ended

Jun. 30, 2019

OPERATING LEASE (Tables)

Schedule of future minimum rental payments for operating leases

2019	$	6,000
2020		8,000
Total minimum lease payments		14,000
Less amount representing interest		(837	)
Present value of operating lease obligation	$	13,163

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ORGANIZATION AND LINE OF BUSINESS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Nov. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
State of incorporation
Incorporation of date	Aug. 25, 2006
Working capital deficit	$ (9,919,279)
Total stockholders' deficit	$ (9,794,012)	$ (12,673,490)		$ (8,086,953)	$ (9,461,710)
EllisLab Corp. [Member]
Noncontrolling interest, ownership percentage by parent			100.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	6 Months Ended
	Jun. 30, 2019
Computer Equipment [Member] | Minimum [Member]
Estimated useful lives	3 years
Computer Equipment [Member] | Maximum [Member]
Estimated useful lives	5 years
Office Furniture And Equipment [Member]
Estimated useful lives	7 years

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Derivative liabilities	$ 7,069,101	$ 10,363,105
Total liabilities measured at fair value	7,069,101	10,363,105
Level 1 [Member]
Derivative liabilities
Total liabilities measured at fair value
Level 2 [Member]
Derivative liabilities
Total liabilities measured at fair value
Level 3 [Member]
Derivative liabilities	7,069,101	10,363,105
Total liabilities measured at fair value	$ 7,069,101	$ 10,363,105

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2)	6 Months Ended
	Jun. 30, 2019 USD ($)
Derivative liability beginning	$ 10,363,105
Addition to liabilities for new debt/shares issued	392,000
Elimination of liabilities for debt conversions	(82,632)
Change in fair value	(3,603,372)
Derivative liability ending	7,069,101
Convertible Notes Payable [Member]
Derivative liability beginning	7,809,054
Addition to liabilities for new debt/shares issued	392,000
Elimination of liabilities for debt conversions	(82,632)
Change in fair value	(3,614,742)
Derivative liability ending	4,503,680
Series B Preferred Stock [Member]
Derivative liability beginning	2,339,898
Addition to liabilities for new debt/shares issued
Elimination of liabilities for debt conversions
Change in fair value	107,315
Derivative liability ending	2,447,213
Stock Options [Member]
Derivative liability beginning	214,153
Addition to liabilities for new debt/shares issued
Elimination of liabilities for debt conversions
Change in fair value	(95,945)
Derivative liability ending	$ 118,208

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3)
Basic weighted average number of shares	50,774,989	38,776,436	46,084,995	38,776,436
Stock options
Series B preferred stock			576,964,286	359,000,000
Series C preferred stock			720,000,000
Convertible notes payable			2,101,989,575	827,095,928
Diluted weighted average number of shares	50,774,989	38,776,436	3,445,038,856	1,224,872,364

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)		6 Months Ended
	Sep. 05, 2017	Jun. 30, 2019	Jun. 30, 2018
Intangible assets, estimated useful lives		5 years
Operating lease description	The base rent for the sublease is $1,000 per month for a period of one year and month-to-month thereafter.
Rent per month	$ 1,000
Increase in other assets and operating lease liability		18,352
Jan 1 2019 [Member]
Increase in other assets and operating lease liability		$ 18,352

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MERGER (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Cash	$ 37,360	$ 56,414	$ 24,031	$ 23,461
Property and equipment, net	3,663	5,193
Accounts payable	209,448	191,312
Accrued expenses	6,694	19,132
Net liabilities	9,998,097	12,867,083
Intangible assets:
Intellectual property	37,000	37,000
Customer base	79,000	79,000
Trade-name/marks	8,000	8,000
Non-compete agreements	1,000	$ 1,000
EllisLab, Inc [Member]
Cash	35,822
Accounts receivable	22,235
Property and equipment, net	4,271
Accounts payable	(74,680)
Accrued expenses	(14,176)
Deferred revenue	(27,037)
Loans payable	(60,000)
Net liabilities	(113,565)
Intangible assets:
Intellectual property	37,000
Customer base	79,000
Trade-name/marks	8,000
Non-compete agreements	1,000
Goodwill	4,934,429
Total	$ 4,945,864

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MERGER (Details Narrative) - USD ($)	1 Months Ended
	Nov. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Common stock, par value		$ 0.001	$ 0.001
EllisLab, Inc [Member]
Non-competition period under merger	2 years
Total		$ 4,945,864
EllisLab, Inc [Member] | Series C Convertible Preferred Stock [Member]
Common stock, par value	$ 0.001
Total	$ 4,945,864
Preferred Stock, shares issued under merger	36,000
Ownership interest	100.00%
Share price	$ 100
Preferred stock shares issued, value	$ 4,345,866
Jones [Member] | Nonstatutory Stock Option Agreement Member | Stock Options [Member]
Common stock shares reserved for future issuance	100,000,000
Exercise price	0.005
Description for stock options surrendered by related party	The Company issued to Jones an option to purchase 100,000,000 shares of the Common stock of the Company, at an exercise price of $0.005, in exchange for his surrender of an option to purchase 10% of the shares of outstanding common stock of EllisLab, Inc
Issuance of stock options in Merger	$ 599,998
Impairment expense	$ 4,934,429
Description for the exercise period	The option is vested but may not be exercised for 2 years from the date of the Merger
Maximum [Member]
Ownership percentage	4.99%

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Total	$ 58,356	$ 58,356
Less accumulated depreciation	(54,693)	(53,163)
Net	3,663	5,193
Computer Equipment [Member]
Total	49,605	49,605
Office furniture and equipment [Member]
Total	$ 8,751	$ 8,751

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
PROPERTY AND EQUIPMENT (Details Narrative)
Depreciation expense	$ 868	$ 337	$ 1,530	$ 674

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INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
INTANGIBLE ASSETS (Details)
Intellectual property	$ 37,000	$ 37,000
Customer base	79,000	79,000
Trade-name/marks	8,000	8,000
Non-compete agreements	1,000	1,000
Total	125,000	125,000
Less accumulated amortization	(14,583)	(2,083)
Net	$ 110,417	$ 122,917

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INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
INTANGIBLE ASSETS (Details Narrative)
Amortization expense	$ 6,250	$ 0	$ 12,500	$ 0

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CONVERTIBLE NOTES PAYABLE (Details Narrative)																																1 Months Ended																									6 Months Ended
	Apr. 11, 2019 USD ($)	Dec. 05, 2018 USD ($)	Nov. 05, 2018 USD ($)	Sep. 13, 2018 USD ($)	Jul. 10, 2018 USD ($)	Jun. 07, 2018 USD ($)	May 07, 2018 USD ($)	Apr. 09, 2018 USD ($)	Mar. 14, 2018 USD ($)	Mar. 08, 2018 USD ($)	Feb. 07, 2018 USD ($)	Jan. 11, 2018 USD ($)	Dec. 14, 2017 USD ($) $ / shares	Nov. 08, 2017 USD ($)	Oct. 13, 2017 USD ($)	Sep. 12, 2017 USD ($)	Aug. 11, 2017 USD ($)	Jul. 10, 2017 USD ($)	Jun. 02, 2017 USD ($) integer $ / shares	May 08, 2017 USD ($)	Apr. 12, 2017 USD ($)	Mar. 09, 2017 USD ($)	Jan. 10, 2017 USD ($)	Dec. 06, 2016 USD ($)	Nov. 08, 2016 USD ($)	Sep. 13, 2016 USD ($)	Aug. 08, 2016 USD ($)	Jul. 06, 2016 USD ($)	Apr. 11, 2016 USD ($)	Mar. 14, 2016 USD ($)	Mar. 04, 2016 USD ($) integer $ / shares	Jun. 28, 2019 USD ($)	Jun. 27, 2019 USD ($)	May 24, 2019 USD ($)	May 23, 2019 USD ($)	Apr. 19, 2019 USD ($)	Mar. 26, 2019 USD ($)	Mar. 25, 2019 USD ($)	Mar. 22, 2019 USD ($)	Feb. 25, 2019 USD ($)	Feb. 13, 2019 USD ($)	Jan. 25, 2019 USD ($)	Jan. 17, 2019 USD ($)	Dec. 24, 2018 USD ($)	Nov. 30, 2018 USD ($)	Nov. 28, 2018 USD ($)	Nov. 23, 2018 USD ($)	Oct. 26, 2018 USD ($)	Aug. 17, 2018 USD ($) $ / shares	Aug. 16, 2018 USD ($)	Feb. 13, 2017 USD ($)	Oct. 17, 2016 USD ($)	Jun. 22, 2016 USD ($)	May 20, 2016 USD ($)	Mar. 17, 2016 USD ($)	Dec. 31, 2012 USD ($)	Jun. 30, 2019 USD ($) shares	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Oct. 08, 2018 USD ($)	Aug. 31, 2018 USD ($)	Mar. 14, 2013 USD ($) $ / shares
Accrued interest, notes payable																																																									$ 457,057		$ 342,752
Proceeds from convertible promissory notes																																																									392,000	$ 380,500
Amortization of debt discount to interest expense																																																									362,766	$ 425,959
Accrued interest																																																									$ 3,729
Debt conversion converted instrument, shares issued | shares
Debt conversion converted amount, principal																																																									$ 72,710
Convertible Notes Payable 1 [Member] | Accounts Payable [Member]
Convertible promissory note, principal amount																																																									$ 29,500					$ 29,500
Debt instrument, interest rate																																																														5.00%
Debt Instrument, conversion price | $ / shares																																																														$ 1.50
Debt Instrument, maturity date																																																									Mar. 14, 2015
Convertible Notes Payable 2 [Member] | Related Parties [Member]
Convertible promissory note, principal amount																																																								$ 58,600
Debt discount																																																								$ 57,050
Debt instrument, interest rate																																																								5.00%
Debt instrument, convertible, terms of conversion feature																																																								The notes are convertible into shares of our common stock at a conversion price equal to the lesser of $2.00 per share or the closing price per share of common stock recorded on the trading day immediately preceding the date of conversion.
Convertible Notes Payable 2 [Member] | Related Parties [Member] | Note One [Member]
Convertible promissory note, principal amount																																																									$ 25,980
Debt Instrument, maturity date																																																									Dec. 31, 2014
Convertible Notes Payable 2 [Member] | Related Parties [Member] | Note Two [Member]
Convertible promissory note, principal amount																																																									$ 32,620
Debt Instrument, maturity date																																																									Dec. 31, 2019
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 55 [Member]
Convertible promissory note, principal amount																																$ 500,000
Proceeds from convertible promissory notes																																30,000
Debt discount																																$ 30,000
Amortization of debt discount to interest expense																																																									164
Debt instrument remaining discount																																																									29,836
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 54 [Member]
Convertible promissory note, principal amount																																				$ 500,000
Proceeds from convertible promissory notes																																				65,000
Debt discount																																				$ 65,000
Amortization of debt discount to interest expense																																																									12,787
Debt instrument remaining discount																																																									52,213
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 53 [Member]
Convertible promissory note, principal amount	500,000
Proceeds from convertible promissory notes	15,000
Debt discount	$ 15,000
Amortization of debt discount to interest expense																																																									3,279
Debt instrument remaining discount																																																									11,721
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 41 [Member]
Convertible promissory note, principal amount																																																												$ 500,000
Proceeds from convertible promissory notes																																																									25,000
Debt discount																																																												$ 25,000
Amortization of debt discount to interest expense																																																									12,397
Debt instrument remaining discount																																																									6,850
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 40 [Member]
Convertible promissory note, principal amount				$ 500,000
Proceeds from convertible promissory notes				30,000
Debt discount				$ 30,000
Amortization of debt discount to interest expense																																																									14,877
Debt instrument remaining discount																																																									6,164
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 44 [Member]
Convertible promissory note, principal amount																																																													$ 500,000
Proceeds from convertible promissory notes																																																$ 12,000
Debt discount																																																$ 12,000
Amortization of debt discount to interest expense																																																									5,951
Debt instrument remaining discount																																																									3,879
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 45 [Member]
Convertible promissory note, principal amount																																																													500,000
Proceeds from convertible promissory notes			$ 25,000
Debt discount			$ 25,000
Amortization of debt discount to interest expense																																																									12,397
Debt instrument remaining discount																																																									8,767
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 46 [Member]
Convertible promissory note, principal amount																																																													500,000
Proceeds from convertible promissory notes																																														$ 30,000
Debt discount																																														$ 30,000
Amortization of debt discount to interest expense																																																									14,877
Debt instrument remaining discount																																																									12,411
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 47 [Member]
Convertible promissory note, principal amount																																																													$ 500,000
Proceeds from convertible promissory notes																																													$ 10,000
Debt discount																																													$ 10,000
Amortization of debt discount to interest expense																																																									4,959
Debt instrument remaining discount																																																									4,192
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 48 [Member]
Convertible promissory note, principal amount																																												$ 500,000
Proceeds from convertible promissory notes																																												50,000
Debt discount																																												$ 50,000
Amortization of debt discount to interest expense																																																									24,795
Debt instrument remaining discount																																																									24,246
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 38 [Member]
Convertible promissory note, principal amount																																																	$ 500,000
Debt instrument, interest rate																																																	10.00%
Debt Instrument, conversion price | $ / shares																																																	$ 0.01
Debt instrument, convertible, terms of conversion feature																																																	Convertible into shares of our common stock at a price per share equal to the lesser of: $0.01; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note.
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 39 [Member]
Proceeds from convertible promissory notes																																																	$ 10,500
Debt discount																																																	$ 10,500
Amortization of debt discount to interest expense																																																									5,207
Debt instrument remaining discount																																																									1,381
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 49 [Member]
Convertible promissory note, principal amount																																											$ 500,000
Proceeds from convertible promissory notes																																											25,000
Debt discount																																											$ 25,000
Amortization of debt discount to interest expense																																																									11,253
Debt instrument remaining discount																																																									13,767
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 50 [Member]
Convertible promissory note, principal amount																																								$ 500,000
Proceeds from convertible promissory notes																																								25,000
Debt discount																																								$ 25,000
Amortization of debt discount to interest expense																																																									8,562
Debt instrument remaining discount																																																									16,438
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 51 [Member]
Convertible promissory note, principal amount																																							$ 500,000
Proceeds from convertible promissory notes																																							25,000
Debt discount																																							$ 25,000
Amortization of debt discount to interest expense																																																									6,831
Debt instrument remaining discount																																																									18,169
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 52 [Member]
Convertible promissory note, principal amount																																					$ 500,000
Proceeds from convertible promissory notes																																					15,000
Debt discount																																					$ 15,000
Amortization of debt discount to interest expense																																																									3,934
Debt instrument remaining discount																																																									11,066
June 2019 Convertible Promissory Note [Member]
Convertible promissory note, principal amount																																	33,000
Proceeds from convertible promissory notes																																	30,000
Debt discount																																	$ 33,000
Amortization of debt discount to interest expense																																																									270
Debt instrument remaining discount																																																									32,730
Debt instrument, interest rate																																	10.00%
Debt Instrument, maturity date																																	Jun. 27, 2020
Debt instrument, convertible, terms of conversion feature																																	The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment.
Fees and expenses																																	$ 3,000
May 2019 Convertible Promissory Note One [Member]
Convertible promissory note, principal amount																																		33,000
Proceeds from convertible promissory notes																																		30,000
Debt discount																																		$ 33,000
Amortization of debt discount to interest expense																																																									3,336
Debt instrument remaining discount																																																									29,664
Debt instrument, interest rate																																		10.00%
Debt Instrument, maturity date																																		May 24, 2020
Debt instrument, convertible, terms of conversion feature																																		The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment.
Fees and expenses																																		$ 3,000
May 2019 Convertible Promissory Note [Member]
Convertible promissory note, principal amount																																			33,000
Proceeds from convertible promissory notes																																			30,000
Debt discount																																			$ 33,000
Amortization of debt discount to interest expense																																																									3,426
Debt instrument remaining discount																																																									29,574
Debt instrument, interest rate																																			10.00%
Debt Instrument, maturity date																																			May 23, 2020
Debt instrument, convertible, terms of conversion feature																																			The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment.
Fees and expenses																																			$ 1,250
Original issue discount																																			$ 1,750
March 2019 Convertible Promissory Note [Member]
Convertible promissory note, principal amount																																						35,000
Proceeds from convertible promissory notes																																						32,000
Debt discount																																						$ 35,000
Amortization of debt discount to interest expense																																																									9,276
Debt instrument remaining discount																																																									25,724
Debt instrument, interest rate																																						10.00%
Debt Instrument, maturity date																																						Mar. 25, 2020
Debt instrument, convertible, terms of conversion feature																																						The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment.
Fees and expenses																																						$ 3,000
February 2019 Convertible Promissory Note [Member]
Convertible promissory note, principal amount																																									$ 38,000
Proceeds from convertible promissory notes																																									35,000
Debt discount																																									$ 38,000
Amortization of debt discount to interest expense																																																									14,263
Debt instrument remaining discount																																																									23,737
Debt instrument, interest rate																																									10.00%
Debt Instrument, maturity date																																									Feb. 13, 2020
Debt instrument, convertible, terms of conversion feature																																									The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment.
Fees and expenses																																									$ 3,000
January 2019 Convertible Promissory Note [Member]
Convertible promissory note, principal amount																																										$ 38,000
Proceeds from convertible promissory notes																																										35,000
Debt discount																																										$ 38,000
Amortization of debt discount to interest expense																																																									16,241
Debt instrument remaining discount																																																									21,759
Debt instrument, interest rate																																										10.00%
Debt Instrument, maturity date																																										Jan. 25, 2020
Debt instrument, convertible, terms of conversion feature																																										The lender, at its option, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 25% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment.
Fees and expenses																																										$ 1,500
Original issue discount																																										$ 1,500
December 2018 Convertible Promissory Note [Member]
Convertible promissory note, principal amount		$ 33,000
Proceeds from convertible promissory notes		30,000
Debt discount		$ 33,000
Amortization of debt discount to interest expense																																																									30,612
Debt instrument remaining discount																																																									$ 37
Debt instrument, interest rate		10.00%
Debt Instrument, maturity date		Dec. 05, 2019
Debt instrument, convertible, terms of conversion feature		The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%.
Fees and expenses		$ 3,000
Common stock shares issued in consideration for conversion of debt, Shares | shares																																																									16,090,758
Common stock shares issued in consideration for conversion of debt, Amount																																																									$ 32,900
Remaining principal balance																																																									100
November 2018 Convertible Promissory Note [Member]
Accrued interest, notes payable																																																									1,650
Convertible promissory note, principal amount																																															$ 33,000
Proceeds from convertible promissory notes																																															30,000
Debt discount																																															$ 33,000
Amortization of debt discount to interest expense																																																									$ 29,564
Debt instrument, interest rate																																															10.00%
Debt Instrument, maturity date																																															Nov. 23, 2019
Debt instrument, convertible, terms of conversion feature																																															The lender, at its option after 180 days from the issuance of the note, may convert the unpaid principal balance of, and accrued interest on, the note into shares of the Company’s common stock at a 39% discount from the lowest trading price during the 15 days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at redemption premiums ranging from 20% to 45%. After the expiration of 180 days after issuance, the Company has no right of prepayment.
Fees and expenses																																															$ 3,000
Common stock shares issued in consideration for conversion of debt, Shares | shares																																																									10,690,179
Common stock shares issued in consideration for conversion of debt, Amount																																																									$ 33,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 3 [Member]
Convertible promissory note, principal amount																															$ 1,000,000
Debt instrument, interest rate																															10.00%
Debt Instrument, conversion price | $ / shares																															$ 0.03
Debt Instrument, maturity date																															Mar. 04, 2016
Debt instrument, convertible, terms of conversion feature																															Convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note.
Frequency of periodic payments																															Monthly
Number of installments | integer																															60
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 4 [Member]
Convertible promissory note, principal amount																														$ 1,000,000																											17,385
Proceeds from convertible promissory notes																														27,000
Debt discount																														$ 27,000
Accrued interest																																																									$ 2,079
Debt conversion converted instrument, shares issued | shares																																																									5,925,853
Debt conversion converted amount, principal																																																									$ 6,810
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 5 [Member]
Proceeds from convertible promissory notes																																																							$ 33,000
Debt discount																																																							$ 33,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 6 [Member]
Proceeds from convertible promissory notes																													$ 90,000
Debt discount																													$ 90,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 7 [Member]
Proceeds from convertible promissory notes																																																						$ 60,000
Debt discount																																																						$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 8 [Member]
Proceeds from convertible promissory notes																																																					$ 50,000
Debt discount																																																					$ 50,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 9 [Member]
Proceeds from convertible promissory notes																												$ 87,000
Debt discount																												$ 87,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 10 [Member]
Proceeds from convertible promissory notes																											$ 60,000
Debt discount																											$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 11 [Member]
Proceeds from convertible promissory notes																										$ 55,000
Debt discount																										$ 55,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 12 [Member]
Proceeds from convertible promissory notes																																																				$ 55,000
Debt discount																																																				$ 55,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 13 [Member]
Proceeds from convertible promissory notes																									$ 55,000
Debt discount																									$ 55,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 14 [Member]
Proceeds from convertible promissory notes																								$ 60,000
Debt discount																								$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 15 [Member]
Proceeds from convertible promissory notes																							$ 60,000
Debt discount																							$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 16 [Member]
Proceeds from convertible promissory notes																																																			$ 60,000
Debt discount																																																			$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 17 [Member]
Proceeds from convertible promissory notes																						$ 60,000
Debt discount																						$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 18 [Member]
Proceeds from convertible promissory notes																					$ 95,000
Debt discount																					$ 95,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 19 [Member]
Proceeds from convertible promissory notes																				$ 60,000
Debt discount																				$ 60,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 20 [Member]
Convertible promissory note, principal amount																			$ 500,000
Debt instrument, interest rate																			10.00%
Debt Instrument, conversion price | $ / shares																			$ 0.03
Debt Instrument, maturity date																			Jun. 02, 2017
Debt instrument, convertible, terms of conversion feature																			Convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note.
Number of installments | integer																			60
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 21 [Member]
Proceeds from convertible promissory notes																			$ 60,000
Debt discount																			$ 60,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 22 [Member]
Proceeds from convertible promissory notes																		$ 80,000
Debt discount																		$ 80,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 23 [Member]
Proceeds from convertible promissory notes																	$ 80,000
Debt discount																	$ 80,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 24 [Member]
Proceeds from convertible promissory notes																$ 85,000
Debt discount																$ 85,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 25 [Member]
Proceeds from convertible promissory notes															$ 80,000
Debt discount															$ 80,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 26 [Member]
Proceeds from convertible promissory notes														$ 75,000
Debt discount														$ 75,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 27 [Member]
Convertible promissory note, principal amount													$ 500,000
Debt instrument, interest rate													10.00%
Debt Instrument, conversion price | $ / shares													$ 0.03
Debt instrument, convertible, terms of conversion feature													Convertible into shares of our common stock at a price per share equal to the lesser of: $0.03; 50% of the lowest trade price of our common stock subsequent to the effective date of the note; or the lowest effective price per share granted to any person or entity (exclusive of our officers and directors) to acquire common stock subsequent to the effective date of the note.
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 28 [Member]
Proceeds from convertible promissory notes													$ 60,000
Debt discount													$ 60,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 29 [Member]
Proceeds from convertible promissory notes												$ 70,000
Debt discount												$ 70,000
Amortization of debt discount to interest expense																																																									2,110
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 30 [Member]
Proceeds from convertible promissory notes											$ 60,000
Debt discount											$ 60,000
Amortization of debt discount to interest expense																																																									6,247
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 31 [Member]
Proceeds from convertible promissory notes										$ 55,000
Debt discount										$ 55,000
Amortization of debt discount to interest expense																																																									10,096
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 32 [Member]
Proceeds from convertible promissory notes									$ 6,500
Debt discount									$ 6,500
Amortization of debt discount to interest expense																																																									1,300
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 33 [Member]
Proceeds from convertible promissory notes								$ 77,000
Debt discount								$ 77,000
Amortization of debt discount to interest expense																																																									20,885
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 34 [Member]
Proceeds from convertible promissory notes							$ 60,000
Debt discount							$ 60,000
Amortization of debt discount to interest expense																																																									20,877
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 35 [Member]
Proceeds from convertible promissory notes						$ 52,000
Debt discount						$ 52,000
Amortization of debt discount to interest expense																																																									22,500
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 36 [Member]
Proceeds from convertible promissory notes					$ 35,000
Debt discount					$ 35,000
Amortization of debt discount to interest expense																																																									17,356
Debt instrument remaining discount																																																									959
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 37 [Member]
Proceeds from convertible promissory notes																																																		$ 24,500
Debt discount																																																		$ 24,500
Amortization of debt discount to interest expense																																																									12,149
Debt instrument remaining discount																																																									$ 3,155

XML

CAPITAL STOCK (Details Narrative) - USD ($)	1 Months Ended		6 Months Ended
	Nov. 30, 2018	Mar. 31, 2016	Jun. 30, 2019	Dec. 31, 2018	Apr. 29, 2016	Apr. 28, 2016
Common stock, par value			$ 0.001	$ 0.001
Common stock, authorized shares			2,000,000,000	2,000,000,000	2,000,000,000	100,000,000
Preferred stock, par value			$ 0.001	$ 0.001
Preferred stock, authorized shares			20,000,000	20,000,000
Debt conversion original debt amount			$ 72,710
Reverse stock split description			On April 20, 2016, the Company amended its articles of incorporation to reduce the number of authorized shares of common stock from 1,000,000,000 to 100,000,000 and to affect a one-for-ten reverse stock split of its authorized, issued and outstanding shares of common stock.
Debt conversion, converted instrument, shares issued
Penalty per day for failure to deliver shares			$ 1,500
Failure to deliver shares penalty, description			If the Company fails to deliver shares in accordance with the required time frame, then for each conversion, a penalty of $1,500 per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery is made.
Accrued interest payable			$ 3,729
Elimination of liabilities for debt conversions			$ (82,632)
Common stock, issued shares			73,456,860	40,750,040
Common stock, outstanding shares			73,456,860	40,750,040
Series B Preferred Stock [Member]
Preferred stock, par value			$ 0.001
Elimination of liabilities for debt conversions
Conversion price description			The conversion price is the lesser of (1) Fifty Percent (50%) of the lowest trade price of Common Stock recorded on any trade day after December 12, 2012 or (2) the lowest effective price per share granted to any person or entity, including the Holder but excluding officers and directors of the Company, to acquire Common Stock, or adjusted, whether by operation of purchase price adjustment, settlement agreements, exchange agreements, reset provision, floating conversion or otherwise, any outstanding warrant, option or other right to acquire Common Stock or outstanding Common Stock equivalents (the "Conversion Price").
Outstanding common share, percentage			4.99%
Preferred stock value outstanding			$ 1,615,500	$ 1,615,500
Preferred stock including additional paid in capital			$ 3,000,000
Preferred stock, outstanding shares			16,155	16,155
Series C Preferred Stock [Member]
Preferred stock, par value	$ 0.001
Preferred stock, authorized shares	36,000
Preferred stock face value	$ 3,600,000
Preferred stock face value per share	$ 0.001
Conversion price description	Each share of Series C Preferred Stock is convertible into twenty thousand (20,000) shares of the Company’s fully paid and nonassessable shares of Common Stock, as adjusted.
Outstanding common share, percentage	4.99%
Series C Preferred Stock [Member] | EllisLab, Inc [Member]
Preferred stock value outstanding			$ 36,000
Accrued Interest Payable [Member]
Debt conversion original debt amount		$ 264,530
Convertible Promissory Notes [Member]
Debt conversion original debt amount		$ 1,615,362

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STOCK OPTIONS AND WARRANTS (Details)	6 Months Ended
	Jun. 30, 2019 USD ($) shares
STOCK OPTIONS AND WARRANTS (Details)
Outstanding shares, beginning	141,406,250
Granted
Exercised
Forfeited or expired	(1,250)
Outstanding shares, ending	141,405,000
Weighted average exercise price, beginning	0.006
Weighted average exercise price, granted
Weighted average exercise price, exercised
Weighted average exercise price, forfeited or expired	14.80
Weighted average exercise price, ending	0.006
Outstanding weighted average remaining contract term, beginning	9 years 10 months 3 days
Outstanding weighted average remaining contract term, ending	9 years 4 months 6 days
Outstanding, aggregate intrinsic value, ending | $

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STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($)	1 Months Ended
	Nov. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Stock options granted		141,405,000	141,406,250
Common stock issued		73,456,860	40,750,040
Warrants [Member] | Two Consultant [Member]
Common stock issued	40,000,000
Exercise price of Option per share	0.005
Option exercise description	The warrants vested upon grant but may not be exercised for 2 years from the date of issuance.
Stock-based compensation	$ 188,127
Stock Option And Warrants [Member]
Closing price of common stock		$ 0.0028
Ten-year Option [Member]
Common stock issued	100,000,000
Exercise price of Option per share	0.005
Option exercise description	The option vested upon grant but may not be exercised for 2 years from the date of the Merger.
Stock-based compensation	$ 599,998

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DERIVATIVE LIABILITIES (Details)	6 Months Ended
	Jun. 30, 2019 $ / shares
Conversion to stock	Monthly
Stock price on the valuation date	$ 0.0028
Years to maturity	15 years
Derivative Liabilities [Member] | Minimum [Member]
Conversion price	$ 2.00
Risk free interest rates	0.91%
Expected volatility	111.00%
Derivative Liabilities [Member] | Maximum [Member]
Conversion price	$ 0.0015
Risk free interest rates	2.71%
Expected volatility	392.00%

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DERIVATIVE LIABILITIES (Details 1) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Derivative liability	$ 7,069,101	$ 10,363,105
Series B Preferred Stock [Member]
Derivative liability	2,447,213	2,339,898
Warrants [Member]
Derivative liability	118,208	214,153
Convertible Notes Payable [Member]
Derivative liability	$ 4,503,680	$ 7,809,054

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OPERATING LEASE (Details)	Jun. 30, 2019 USD ($)
OPERATING LEASE (Details)
2019	$ 6,000
2020	8,000
Total minimum lease payments	14,000
Less amount representing interest	(837)
Present value of operating lease obligation	$ 13,163

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OPERATING LEASE (Details Narrative) - USD ($)		6 Months Ended
	Sep. 05, 2017	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Rent per month	$ 1,000
Operating lease right to use		13,163
Operating lease liability, current portion		11,187
Operating lease cost		6,000
Increase in other assets and operating lease liability		18,352
Jan 1 2019 [Member]
Increase in other assets and operating lease liability		$ 18,352

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RELATED PARTY TRANSACTIONS (Details Narrative)	3 Months Ended	6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)
Consulting fees	$ 30,000	$ 60,000
Consulting Agreement [Member]
Consulting fees		120,000
Rick Ellis [Member] | December 1, 2018 [Member]
Consulting fees	30,000	60,000
Monthly salary received	$ 10,000	$ 10,000

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended
	Jul. 29, 2019	Jun. 30, 2019	Jun. 30, 2018
Proceeds from convertible debt		$ 392,000	$ 380,500
Debt conversion, converted instrument, shares issued
Subsequent Event [Member] | July 1, 2019 [Member]
Debt instrument converted amount, principal		$ 100
Debt instrument converted amount, interest		$ 1,650
Debt conversion, converted instrument, shares issued		1,029,412
Subsequent Event [Member] | July 15, 2019 [Member]
Debt instrument converted amount, principal		$ 2,000
Debt instrument converted amount, interest		$ 667
Debt conversion, converted instrument, shares issued		2,319,476
Subsequent Event [Member] | August 8, 2019 [Member]
Debt instrument converted amount, principal		$ 4,386
Debt conversion, converted instrument, shares issued		3,800,000
Debt instrument converted amount, fees		$ 250
Subsequent Event [Member] | August 2018 $500,000 [Member]
Proceeds from convertible debt	$ 40,000