10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2020

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

Securities registered under Section 12(b) of the Exchange Act: None.

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value per share

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 ☒     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 ☒     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	☒
		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 ☒

Securities registered pursuant to Section 12(b) of the Act: None.

The number of shares of registrant’s common stock outstanding, as of May 26, 2020 was 13,705,569.

DIGITAL LOCATIONS, INC. 

INDEX

PART I: FINANCIAL INFORMATION
ITEM 1	FINANCIAL STATEMENTS (Unaudited)	3
	Condensed Balance Sheets	3
	Condensed Statements of Operations	4
	Condensed Statements of Stockholders’ Deficit	5
	Condensed Statements of Cash Flows	7
	Notes to Condensed Financial Statements	8
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	30
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
ITEM 4	CONTROLS AND PROCEDURES	36
PART II: OTHER INFORMATION		37
ITEM 1	LEGAL PROCEEDINGS	37
ITEM 1A	RISK FACTORS	37
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	37
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	37
ITEM 4	MINE SAFETY DISCLOSURES	37
ITEM 5	OTHER INFORMATION	37
ITEM 6	EXHIBITS	38
SIGNATURES		40

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DIGITAL LOCATIONS, INC.
Condensed Balance Sheets
	March 31,			December 31,
	2020			2019
	(Unaudited)
ASSETS
Current assets:
Cash	$	18,715		$	8,275
Prepaid expenses		-			2,808
Total current assets		18,715			11,083
Property and equipment, net		541			595
Operating lease right to use		4,877			7,708
Total assets	$	24,133		$	19,386
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	183,651		$	126,478
Accrued expenses and other current liabilities		12,085			3,332
Accrued interest, notes payable		647,139			581,610
Operating lease liability		4,877			7,708
Derivative liabilities		6,003,493			6,160,895
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 ($22,378 in default at March 31, 2020), net of discount of $152,238 and $258,518, respectively		2,514,085			2,378,405
Total current liabilities		9,453,430			9,346,528
Total liabilities		9,453,430			9,346,528
Stockholders’ deficit:
Preferred stock, $0.001 par value; 20,000,000 shares authorized:
Series B, 15,055 and 16,155 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		15			16
Series D, 0 and 1,000 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		-			1
Common stock, $0.001 par value; 2,000,000,000 shares authorized, 12,475,019 and 1,049,380 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		12,475			1,049
Additional paid-in capital		26,199,530			25,937,634
Accumulated deficit		(35,641,317	)		(35,265,842	)
Total stockholders’ deficit		(9,429,297	)		(9,327,142	)
Total liabilities and stockholders’ deficit	$	24,133		$	19,386

See notes to condensed financial statements

3

DIGITAL LOCATIONS, INC. 

Condensed Statements of Operations

(Unaudited)

	Three Months Ended March 31,
	2020			2019
Revenues	$	-		$	-
Operating expenses:
General and administrative		93,294			102,020
Depreciation and amortization		54			76
Total operating expenses		93,348			102,096
Loss from operations		(93,348	)		(102,096	)
Other income (expense):
Interest expense		(192,164	)		(221,850	)
Gain (loss) on change in derivative liabilities		(89,963	)		3,225,346
Total other income (expense)		(282,127	)		3,003,496
Income (loss) from continuing operations before income taxes		(375,475	)		2,901,400
Provision for income taxes		-			-
Income (loss) from continuing operations, net of income taxes		(375,475	)		2,901,400
Loss from discontinued operations, net of income taxes		-			(118,549	)
Net income (loss)	$	(375,475	)	$	2,782,851
Weighted average number of shares outstanding:
Basic		5,115,166			183,747
Diluted		5,115,116			5,960,381
Net income (loss) from continuing operations per common share:
Basic	$	(0.07	)	$	15.79
Diluted	$	(0.07	)	$	0.49
Net income (loss) from discontinued operations per common share:
Basic	$	-		$	(0.65	)
Diluted	$	-		$	(0.65	)
Total net income (loss) per common share:
Basic	$	(0.07	)	$	15.15
Diluted	$	(0.07	)	$	0.47

See notes to condensed financial statements

4

DIGITAL LOCATIONS, INC.

Condensed Statement of Stockholders’ Deficit

Three Months Ended March 31, 2020 (Unaudited)

	Series B Preferred Stock						Series C Preferred Stock				Series D Preferred Stock						Common Stock				Additional Paid-in			Accumulated
	Shares			Amount			Shares		Amount		Shares			Amount			Shares		Amount		Capital			Deficit			Total
Balance, December 31, 2019		16,155		$	16			-	$	-		1,000		$	1			1,049,380	$	1,049	$	25,937,634		$	(35,265,842	)	$	(9,327,142	)
Issuance of common stock for conversion of notes payable and accrued interest payable		-			-			-		-		-			-			1,645,256		1,645		8,544			-			10,189
Issuance of common stock for conversion of Series B preferred stock		(1,100	)		(1	)		-		-		-			-			9,777,778		9,778		(9,777	)		-			-
Reverse split rounding of shares		-			-			-		-		-			-			2,605		3		(3	)		-			-
Redemption of Series D preferred stock		-			-			-		-		(1,000	)		(1	)		-		-		1			-			-
Settlement of derivative liabilities		-			-			-		-		-			-			-		-		263,131			-			263,131
Net loss		-			-			-		-		-			-			-		-		-			(375,475	)		(375,475	)
Balance, March 31, 2020		15,055		$	15			-	$	-		-		$	-			12,475,019	$	12,475	$	26,199,530		$	(35,641,317	)	$	(9,429,297	)

See accompanying notes to condensed financial statements.

5

DIGITAL LOCATIONS, INC.

Condensed Statement of Stockholders’ Deficit

Three Months Ended March 31, 2019 (Unaudited)

	Series B Preferred Stock				Series C Preferred Stock				Series D 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		-	$	-		181,112	$	181	$	25,533,544	$	(38,207,267	)	$	(12,673,490	)
Issuance of common stock for conversion of notes payable and accrued interest payable		-		-		-		-		-		-		8,783		9		2,955		-			2,964
Settlement of derivative liabilities		-		-		-		-		-		-		-		-		8,309		-			8,309
Net income		-		-		-		-		-		-		-		-		-		2,782,851			2,782,851
Balance, March 31, 2019		16,155	$	16		36,000	$	36		-	$	-		189,895	$	190	$	25,544,808	$	(35,424,416	)	$	(9,879,366	)

See accompanying notes to condensed financial statements.

6

DIGITAL LOCATIONS, INC 

Condensed Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
	2020			2019
Cash flows from operating activities:
Net income (loss)	$	(375,475	)	$	2,782,851
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		54			77
Amortization of debt discount to interest expense		125,046			165,045
(Gain) loss on change in derivative liabilities		89,963			(3,225,346	)
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses		2,808			(26,076	)
Increase (decrease) in:
Accounts payable		57,173			26,397
Accrued expenses		8,753			1,810
Accrued interest, notes payable		67,118			56,805
Change in net assets of discontinued operations		-			8,549
Net cash used in operating activities		(24,560	)		(209,888	)
Cash flows from investing activities		-			-
Cash flows from financing activities:
Proceeds from convertible notes payable		35,000			192,000
Net cash provided by financing activities		35,000			192,000
Net increase (decrease) in cash		10,440			(17,888	)
Cash, beginning of period		8,275			19,232
Cash, end of period	$	18,715		$	1,344
Supplemental Disclosure:
Cash paid for income taxes	$	-		$	-
Cash paid for interest		-			1,876
Non-cash financing and investing activities:
Debt discount for derivative liabilities	$	15,766		$	192,000
Common shares issued in conversion of debt		10,189			2,964
Common shares issued in conversion of Series B preferred shares		1			-
Reverse split rounding of shares		3			-
Redemption of Series D preferred stock		1			-
Settlement of derivative liabilities		263,131			8,309
Increase in other assets and operating lease liability		-			18,352

See notes to condensed financial statements

7

DIGITAL LOCATIONS, INC.

Notes to Condensed Financial Statements

Three Months Ended March 31, 2020

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

On September 30, 2019, the Company, entered into an Agreement for the Purchase and Sale of Capital Stock of EllisLab Corp. (the “EllisLab Corp. Sale Agreement”) with Rick Ellis to sell to Rick Ellis all of the issued and outstanding shares of EllisLab Corp. for $10,000 and the 36,000 shares of the Company’s Series C preferred stock acquired by Rick Ellis in the Merger, which represents all of the issued and outstanding shares of the Series C preferred stock. In connection with the EllisLab Corp. Sale Agreement, the covenant not to compete and the lockup of stock consideration entered into in connection with the Merger were terminated and the parties’ obligations thereunder were released.  Pursuant to the Ellis Lab Corp. Sale Agreement, the Company effectively divested itself of the Ellis Lab business and discontinued it. 

Consequently, the revenues and expenses for EllisLab Corp. are reported as “Loss from discontinued operations, net of income taxes” in our condensed statements of operations for the three months ended March 31, 2019. The EllisLab Corp. assets and liabilities have been retroactively reclassified as assets and liabilities of discontinued operations.  See Note 3.  All significant intercompany accounts and transactions have been eliminated.

Effective February 14, 2020, the Company effected a reverse split of its common stock at a ratio of one for two hundred twenty-five shares (1:225) (the “Stock Split”) with the filing of a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada.  The Company has given retroactive effect for the Stock Split in its financial statements and notes thereto for all periods presented.

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 ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.  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, 2019.

8

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 March 31, 2020, our current liabilities exceeded our current assets by $9,434,715 and we had a total stockholders’ deficit of $9,429,297.  In addition, subsequent to the EllisLab Corp. Sale Agreement which closed on September 30, 2019, the Company does not have any sources of revenues, 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. 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.

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 14, 2020.  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.

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.

9

Derivative Liabilities

We have identified the conversion features of our convertible notes payable and Series B preferred stock and certain stock options and warrants as derivatives. Where the number of common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional options, 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 March 31, 2020 and December 31, 2019, we believe the amounts reported for cash, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable 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 March 31, 2020 and December 31, 2019:

	Total		Level 1		Level 2		Level 3
March 31, 2020:
Derivative liabilities	$	6,003,493	$	-	$	-	$	6,003,493
Total liabilities measured at fair value	$	6,003,493	$	-	$	-	$	6,003,493
December 31, 2019:
Derivative liabilities	$	6,160,895	$	-	$	-	$	6,160,895
Total liabilities measured at fair value	$	6,160,895	$	-	$	-	$	6,160,895

During the three months ended March 31, 2020, 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, 2019	$	3,606,194		$	2,535,359		$	19,342		$	6,160,895
Addition to liabilities for new debt/shares issued		15,766			-			-			15,766
Elimination of liabilities for debt conversions		(28,276	)		(234,855	)		-			(263,131	)
Change in fair value		(312,048	)		419,213			(17,202	)		89,963
Derivative liabilities at March 31, 2020	$	3,281,636		$	2,719,717		$	2,140		$	6,003,493

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, included in loss from discontinued operations, were 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 were 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.

11

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.

Subsequent to the EllisLab Corp. Sale Agreement, which closed on September 30, 2019, the Company does not have any sources of revenues.

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 March 31,
	2020		2019
Basic weighted average number of shares		5,115,166		183,747
Dilutive effect of:
Stock options		-		471,380
Series B preferred stock		-		1,595,556
Convertible notes payable		-		3,709,698
Diluted weighted average number of shares		5,115,166		5,960,381

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 three months ended March 31, 2020 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 ended March 31, 2019 have been reclassified to conform to the presentation for the three months ended March 31, 2020.

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NOTE 3 – MERGER AND SUBSEQUENT SALE

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 Stock, 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.  The acquisition of EllisLab, Inc. in the Merger has been accounted for as a purchase, and the accounts of EllisLab Corp. were consolidated with those of the Company as of December 1, 2018.

On September 30, 2019, the Company, entered into an Agreement for the Purchase and Sale of Capital Stock of EllisLab Corp. (the “EllisLab Corp. Sale Agreement”) with Ellis to sell to Ellis all of the issued and outstanding shares of EllisLab Corp. for $10,000 and the 36,000 shares of the Company’s Series C Convertible Preferred Stock owned by him, which represents all of the issued and outstanding shares of the Series C Convertible Preferred Stock.  Pursuant to the Ellis Lab Corp. Sale Agreement, the Company effectively divested itself of the Ellis Lab business and discontinued it.  Consequently, the revenues and expenses for EllisLab Corp. are reported as “Loss from discontinued operations, net of income taxes” in our condensed statements of operations for the three months ended March 31, 2019.  When presented, the EllisLab Corp. assets and liabilities have been retroactively reclassified as assets and liabilities of discontinued operations

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	March 31, 2020			December 31, 2019
Computer equipment	$	12,303		$	12,303
Office furniture and equipment		1,459			1,459
Total		13,762			13,762
Less accumulated depreciation		(13,221	)		(13,167	)
Net	$	541		$	595

Depreciation expense was $54 and $76 for the three months ended March 31, 2020 and 2019, respectively.

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NOTE 5.  CONVERTIBLE NOTES PAYABLE

Convertible Promissory Note of $29,500 in Default

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 March 31, 2020 and December 31, 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 March 31, 2020, 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 March 31, 2020 has been extended to December 31, 2020.

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 year ended December 31, 2018, we issued the lender a total of 8,772 shares of our common stock in consideration for the conversion of principal of $2,330 and accrued interest of $630. During the three months ended March 31, 2020, we issued the lender a total of 496,804 shares of our common stock in consideration for the conversion of principal of $4,000 and accrued interest of $1,589, resulting in a principal balance of $1,445 at March 31, 2020.

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.

14

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.

15

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.

16

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.  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.  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.  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.  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.  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.  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.  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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from August 17, 2018.

17

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $1,164 and the debt discount has been fully amortized to interest expense.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $3,836 and the debt discount has been fully amortized to interest expense.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $5,601 and the debt discount has been fully amortized to interest expense.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $3,525 and the debt discount has been fully amortized to interest expense.

18

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $3,730, resulting in a remaining debt discount of $451 as of March 31, 2020.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $16,151, resulting in a remaining debt discount of $3,374 as of March 31, 2020.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $7,459, resulting in a remaining debt discount of $7,295 as of March 31, 2020.

On July 29, 2019, we received proceeds of $40,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $40,000 related to the conversion feature of the note, along with a derivative liability at inception. During the three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $9,945, resulting in a remaining debt discount of $13,115 as of March 31, 2020.

On September 27, 2019, we received proceeds of $33,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $16,230 as of March 31, 2020.

On October 8, 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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $6,216, resulting in a remaining debt discount of $13,046 as of March 31, 2020.

October 2019 Convertible Promissory Note – $500,000

On October 31, 2019, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the “October 2019 $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 October 31, 2019, we received proceeds of $25,000 pursuant to the October 2019 $500,000 CPN.

On October 31, 2019, we received proceeds of $25,000 pursuant to the October 2019 $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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $6,216, resulting in a remaining debt discount of $14,617 as of March 31, 2020.

19

On November 12, 2019, we received proceeds of $25,000 pursuant to the October 2019 $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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $6,216, resulting in a remaining debt discount of $15,437 as of March 31, 2020.

On December 19, 2019, we received proceeds of $25,000 pursuant to the October 2019 $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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $6,216, resulting in a remaining debt discount of $17,964 as of March 31, 2020.

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 matured on January 25, 2020 and is currently in default.  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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $1,415 and the debt discount has been fully amortized to interest expense. The note had a principal balance of $22,378 as of March 31, 2020.

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 on 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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $4,779 as of March 31, 2020.  The note had a principal balance of $33,000 as of March 31, 2020.

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 on May 24, 2020.  On January 16, 2020, the note was assigned to another institutional investor.  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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $5,551, resulting in a remaining debt discount of $2,213 as of March 31, 2020.  During the three months ended March 31, 2020, we issued the lender a total of 1,148,452 shares of our common stock in consideration for the conversion of principal of $4,600, resulting in a principal balance of $15,000 as of March 31, 2020.

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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 on June 27, 2020. On January 16, 2020, the note was assigned to another institutional investor.  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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $4,779 as of March 31, 2020.  The note had a principal balance of $33,000 as of March 31, 2020.

August 13, 2019 Convertible Promissory Note – $33,000

Effective August 13, 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 on August 13, 2020. On January 16, 2020, the note was assigned to another institutional investor.  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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $12,172 as of March 31, 2020.  The note had a principal balance of $33,000 as of March 31, 2020.

August 29, 2019 Convertible Promissory Note – $25,000

Effective August 29, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $25,000. The note matures on August 29, 2020. The Company received proceeds of $22,000 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 $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $5,615 as of March 31, 2020.  The note had a principal balance of $25,000 as of March 31, 2020.

21

March 16, 2020 Convertible Promissory Note – $38,000

Effective March 16, 2020, the Company entered into a 12% convertible note with an institutional investor in the principal amount of $38,000. The note matures March 16, 2021. The Company received net proceeds of $35,000 after payment of $3,000 in legal fees and fees to the lender. 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 45% discount from the lowest trading price during the 20 trading days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at a redemption premium of 150%. After the expiration of 180 days after issuance, the Company has no right of prepayment.  We recorded a debt discount of $18,766 related to the conversion feature of the note, along with a derivative liability at inception. During the three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $771, resulting in a remaining debt discount of $17,995 as of March 31, 2020.  The note had a principal balance of $38,000 as of March 31, 2020.

Total accrued interest payable on notes payable was $647,139 and $581,610 as of March 31, 2020 and December 31, 2019, respectively.

NOTE 6.  CAPITAL STOCK

At March 31, 2020, 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 March 31, 2020 and December 31, 2019, the Company had 15,055 and 16,155 shares of Series B Preferred Stock outstanding, respectively, with a face value of $1,505,500 and $1,615,500, respectively.  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.  Effective February 26, 2020, William Beifuss, Jr., the Company’s President, converted 1,100 shares of Series B preferred stock into 9,777,778 shares of the Company’s common stock. Mr. Beifuss previously acquired the Series B shares from a lender in a private transaction.

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.

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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.

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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 six hundred thousand 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.

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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 surrendered and cancelled on September 30, 2019 pursuant to the sale of EllisLab Corp.

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 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 have 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 Preferred Stock contains a blocker that prevents the Holder from converting the Series C Preferred Stock 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.

Series D Preferred Stock

On November 27, 2019, the Company filed a Certificate of Designation for its Series D Preferred Stock (the “Series D Certificate”) with the Secretary of State of Nevada which designates 1,000 shares of the Company’s preferred stock par value $0.001 per share as Series D Preferred Stock. William E. Beifuss, Jr., the Company’s President and Chief Executive Officer, was issued 1,000 shares of Series D Preferred Stock valued at $15,000 by an independent valuation firm, which shares were outstanding as of December 31, 2019. The 1,000 shares of Series D preferred stock were automatically redeemed on January 11, 2020, 45 days after the effective date of the Series D Certificate.

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Pursuant to the terms of the Designation, holders of Series D Preferred Stock shall not be entitled to dividends or a liquidation preference and shall have no conversion rights. For so long as any shares of the Series D Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have the right to vote in an amount equal to fifty-one percent (51%) of the total voting power of the Company’s shareholders. Such vote shall be determined by the holder(s) of a majority of the then issued and outstanding shares of Series D Preferred Stock.

The shares of the Series D Preferred Stock shall be automatically, and without any required action by the Company or the holders thereof, redeemed by the Company at their par value on the first to occur of the following triggering events: (i) a date forty-five (45) days as after the Effective Date, (ii) on the date that Mr. Beifuss. ceases, for any reason, to serve as officer, director or consultant of the Company, it being understood that if Mr. Beifuss continues without interruption to serve thereafter in one or more capacities as officer, director or consultant of the Company this shall not be considered a cessation of service, or (iii) on the date that the Company’s shares of common stock first trade on any national securities exchange and such listing is conditioned upon the elimination of the preferential voting rights of the Series D Preferred Stock set forth in the Certificate of Designation.

Common Stock

Effective February 14, 2020, the Company effected a reverse split of its common stock at a ratio of one for two hundred twenty-five shares (1:225) with the filing of a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada. The Company has given retroactive effect for the reverse stock split in its financial statements and notes thereto for all periods presented.

As of March 31, 2020 and December 31, 2019, the Company had 12,475,019 and 1,049,380 shares of common stock issued and outstanding, respectively.

During the three months ended March 31, 2020, the Company issued a total of 11,425,639 shares of common stock: 1,645,256 shares for the conversion of $8,600 of principal of convertible notes payable and accrued interest payable of $1,589; 9,777,778 shares for the conversion of 1,100 shares of Series B preferred stock recorded at par value; and 2,605 shares for the rounding of shares in the February 2020 reverse stock split recorded at par value.  In connection with the convertible debt and Series B preferred stock conversions, the Company reduced derivative liabilities by $263,131.  There was no gain or loss on settlement of debt due to the conversions occurring within the terms of the underlying agreements

During the three months ended March 31, 2019, the Company issued 1,976,160 shares of common stock at fair value in consideration for the conversion of $2,285 of principal of convertible promissory notes and accrued interest payable of $679. In connection with the convertible debt conversion, the Company reduced derivative liabilities by $8,309.  There was no gain or loss on settlement of debt due to the conversion occurring within the terms of the convertible note.

NOTE 7.  STOCK OPTIONS AND WARRANTS

As of March 31, 2020, the Board of Directors of the Company had granted non-qualified stock options and warrants exercisable for a total of 184,001 shares of common stock to its employees, officers, and consultants. 

We recognized no stock-based compensation expense for the three months ended March 31, 2020 and 2019.

As of March 31, 2020, we had no unrecognized stock-based compensation expense.

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A summary of the Company’s stock options and warrants as of March 31, 2020, and changes during the three months then ended is as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2019		184,001	$	1.544		8.65
Granted		-	$	-
Exercised		-	$	-
Forfeited or expired		-	$	-
Outstanding at March 31, 2020		184,001	$	1.544		8.40	$	-

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the closing price of our common stock of $0.0080 as of March 31, 2020, 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.

NOTE 8. 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.

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The significant assumptions used in the valuation of the derivative liabilities at March 31, 2020 are as follows:

Conversion to stock	Monthly
Stock price on the valuation date	$	0.0080
Conversion price	$	0.0431 - $0.0030
Risk free interest rates	0.18% - 2.74		%
Years to maturity		15.0
Expected volatility	111%–373		%

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

	March 31, 2020		December 31, 2019
Convertible notes payable	$	3,281,636	$	3,606,194
Series B preferred stock		2,719,717		2,535,359
Warrants		2,140		19,342
Total	$	6,003,493	$	6,160,895

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.

NOTE 9. 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, Chief Executive Officer and Acting Chief Financial Officer, is to receive fees for services of $10,000 per month.  Fees payable to Mr. Beifuss of $40,000 and $10,000 are included in accounts payable as of March 31, 2020 and December 31, 2019, respectively.

As discussed in Note 3, the Company issued 36,000 shares of Series C Preferred Stock to Rick Ellis, the former Chief Executive Officer of the Company and Chief Executive Officer of EllisLab Corp., in the EllisLab Corp. Merger, which shares were surrendered and cancelled on September 30, 2019 pursuant to the EllisLab Corp. Sale Agreement.

As discussed in Note 7, in November 2019, the Company issued to Mr. Beifuss 1,000 shares of Series D Preferred Stock for services valued at $15,000 by an independent valuation firm.  The shares were automatically redeemed in January 2020, 120 days after the effective date of the related Series D Preferred Stock Certificate.

See Note 5 for discussion of convertible notes payable with related parties.

NOTE 10. COMMITMENTS AND CONTINGENCIES

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”) in the amount of $18,352. 

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As of March 31, 2020 and December 31, 2019, the operating lease liability (recorded as a current liability) and ROU asset had a balance of $4,877 and $7,708, respectively.

For the three months ended March 31, 2020 and 2019, the Company recognized operating lease cost of $3,000, 

The table below reconciles the Company’s future cash obligations for the operating lease liability recorded on the consolidated balance sheet as March 31, 2020:

2020	$	5,000
Less amount representing interest		(123	)
Present value of operating lease obligation	$	4,877

NOTE 11.  SUBSEQUENT EVENTS

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

Convertible Note Conversions

Subsequent to March 31, 2020, a lender converted a total of $4,000 of principal into 1,230,550 shares of the Company’s common stock.

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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, 2019 filed with the SEC on April 14, 2020, 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 (the “Merger Agreement”) pursuant to which EllisLab, Inc., an S Corporation owned 100% by Rick Ellis, merged with and into EllisLab Corp., a newly formed subsidiary of the Company (the “Merger”). EllisLab, Inc. builds software for web professionals and provides related support services. Pursuant to the terms of the Merger Agreement, Ellis received 36,000 shares of the Company’s newly designated Series C Convertible Preferred Stock, 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.

On September 30, 2019, the Company, entered into an Agreement for the Purchase and Sale of Capital Stock of EllisLab Corp. (the “EllisLab Corp. Sale Agreement”) with Rick Ellis to sell to Rick Ellis all of the issued and outstanding shares of EllisLab Corp. for $10,000 and the 36,000 shares of the Company’s Series C Convertible Preferred Stock acquired by Rick Ellis in the Merger, which represented all of the issued and outstanding shares of the Company’s Series C Convertible Preferred Stock.  Pursuant to the Ellis Lab Corp. Sale Agreement, the Company effectively divested itself of the Ellis Lab business and discontinued it. 

Consequently, the revenues and expenses for EllisLab Corp. are reported as “Loss from discontinued operations, net of income taxes” in our condensed statements of operations for the three months ended March 31, 2019. Where presented, the EllisLab Corp. assets and liabilities have been retroactively reclassified as assets and liabilities of discontinued operations.

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We are an early stage developer and acquirer of cell tower sites for 5G services. We intend to develop a portfolio of cell tower sites to help meet the expected demand of rapidly growing 5G networks.  To rapidly enter the market, we plan to partner or co-develop a portfolio of cell tower sites to help meet the demands of 5G networks. Our goal is to become a “landlord” of tomorrow’s wireless communications assets.

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 March 31, 2020, our current liabilities exceeded our current assets by $9,434,715 and we had a total stockholders’ deficit of $9,429,297.  In addition, subsequent to the EllisLab Corp. Sale Agreement which closed on September 30, 2019, the Company does not have any sources of revenues, 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. 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.

Results of Operations

Three Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019

Revenues

As discussed above, revenues and expenses of EllisLab Corp. are combined and presented as loss from discontinued operations, net of income taxes in our condensed statements of operations.  Therefore, we reported no revenues for the three months ended March 31, 2020 and 2019. On September 30, 2019, we sold EllisLab Corp. and currently have no other sources of revenues.

General and Administrative Expenses

General and administrative expenses decreased to $93,294 in the three months ended March 31, 2020 from $102,020 in the three months ended March 31, 2019. The decrease is due primarily to decreased salaries in the current fiscal year and a decrease in professional fees.

Depreciation and Amortization Expense

Our investment in property and equipment currently is not material to our operations. Depreciation expense was $54 and $76 for the three months ended March 31, 2020 and 2019, respectively.

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Other Income (Expense)

Total other expense was $282,127 for the three months ended March 31, 2020 compared to total other income of $3,003,496 for the three months ended March 31, 2019.  The total other income for the first quarter of the last fiscal year resulted from a gain on change in derivative liabilities, partially offset by interest expense.

We reported a loss on change in derivative liabilities of $89,963 in the three months ended March 31, 2020 compared to a gain on change in derivative liabilities of $3,225,346 in the three months ended March 31, 2019.  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 to 192,164 for the three months ended March 31, 2020 from $221,850 for the three months ended March 31, 2019.  The increase in interest expense resulted primarily from lower amortization of debt discount in the current year, as we have had limited new debt.

Net Income

As a result of the above, we reported a net loss of $375,475 for the three months ended March 31, 2020 compared to net income of $2,782,851 for the three months ended March 31, 2019.  The net income for the prior year first quarter resulted primarily from the gain on change in derivative liabilities.

Liquidity and Capital Resources

As of March 31, 2020, we had total current assets of $18,715, comprised of cash, and total current liabilities of $9,453,430, resulting in a working capital deficit of $9,434,715.  Included in our current liabilities at March 31, 2020 are derivative liabilities totaling $6,003,493, which we do not anticipate will require cash payments to settle.

We have funded our operations primarily from the proceeds of convertible notes payable.  We have been limited in raising funds during the current fiscal year and received $35,000 of net proceeds from convertible notes payable during the three months ended March 31, 2020.

During the three months ended March 31, 2020, we used net cash of $24,560 in operating activities as a result of our net loss of $375,475, partially offset by non-cash expenses totaling $215,063, decrease in prepaid expenses of $2,808 and increases in accounts payable of $57,173, and accrued expenses of $8,753 and accrued interest, notes payable of $67,118.

During the three months ended March 31, 2019, we used net cash of $209,888 in operating activities as a result of our net income of $2,782,851, non-cash expenses totaling $165,122, increases in accounts payable of $26,397, accrued expenses of $1,810, accrued interest, notes payable of $56,805 and change in net assets of discontinued operations of $8,549, offset by non-cash gain of $3,225,346 and increase in prepaid expenses of $26,397.

During the three months ended March 31, 2020 and 2019, we had no net cash provided by or used in investing activities.

Net cash provided by financing activities during the three months ended March 31, 2020 and 2019 was $35,000 and $192,000, respectively, comprised of proceeds from convertible notes payable.

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Historically, proceeds received from the issuance of debt have been sufficient to fund our current operating expenses.  We estimate that we will need to raise substantial capital or financing over the next twelve months in order to explore business expansion opportunities and provide the necessary capital to meet our other general and administrative expenses. We anticipate that we will incur operating losses in the next twelve months. Our revenue is not expected to exceed our investment and operating costs in the next twelve months. Therefore, our future operations are dependent on our ability to secure additional financing. Recently, funding opportunities have been limited due to downturns in U.S. equity and debt markets resulting from the world-wide Coved 19 pandemic.  Financing transactions, if available, 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 continued 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.

Our prospects must be considered considering the risks, expenses, and difficulties frequently encountered by companies in their early stage of operations. To address these risks, we must, among other things, seek growth opportunities through investment and acquisitions, implement and successfully execute our business strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. We cannot assure that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition and results of operations. 

Future Impact of Covid-19

The future impact of the Covid-19 pandemic on companies is evolving and we are currently unable to assess with certainty the broad effects of Covid-19 on our business. As of March 31, 2020, the Company had no material assets that would be subject to impairment or change in valuation due to Covid-19.  However as of March 31, 2020, the reported values of the Company’s material convertible debt and derivative liabilities are based on multiple factors, 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. We believe these inputs will be subject to even more significant changes due to the impact on capital markets of Covid-19, and the future estimated fair value of these liabilities may fluctuate materially from period to period. 

Without a current source of revenue, we are currently dependent on debt or equity financing to fund our operations and execute our business plan. We believe that the impact on capital markets of Covid-19 may make it more costly and more difficult for us to access these sources of funding.

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.

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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.

Derivative Liabilities

We have identified the conversion features of our convertible notes payable and Series B preferred stock and certain stock options and warrants as derivatives. Where the number of common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional options, 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 March 31, 2020 and December 31, 2019, the Company believes the amounts reported for cash, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable, notes payable 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.

34

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 March 31, 2020 and December 31, 2019:

	Total		Level 1		Level 2		Level 3
March 31, 2020:
Derivative liabilities	$	6,003,493	$	-	$	-	$	6,003,493
Total liabilities measured at fair value	$	6,003,493	$	-	$	-	$	6,003,493
December 31, 2019:
Derivative liabilities	$	6,160,895	$	-	$	-	$	6,160,895
Total liabilities measured at fair value	$	6,160,895	$	-	$	-	$	6,160,895

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, included in loss from discontinued operations, were 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 were 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.

Subsequent to the agreement to sell EllisLab Corp. on September 30, 2019, the Company does not have any sources of revenues.

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.

35

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

Based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, as of March 31, 2020, our Chief Executive Officer and Acting Chief Financial Officer has concluded that our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Our Chief Executive Officer and Acting Chief Financial Officer also concluded that, as of March 31, 2020, our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Acting Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting in accordance with Exchange Act Rule 13a-15. With the participation of our Chief Executive Officer and Acting Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2020 based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of March 31, 2020, based on those criteria. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:

1.	As of March 31, 2020, 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 March 31, 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 March 31, 2020, 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 did not maintain effective internal control over financial reporting as of March 31, 2020, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.

Changes in Internal Controls

During the three months ended March 31, 2020, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

36

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

The future impact of the Covid-19 pandemic on companies is evolving and we are currently unable to assess with certainty the broad effects of Covid-19 on our business.

The future impact of the Covid-19 pandemic on companies is evolving and we are currently unable to assess with certainty the broad effects of Covid-19 on our business. As of March 31, 2020, the Company had no material assets that would be subject to impairment or change in valuation due to Covid-19. However, as of March 31, 2020, the reported values of the Company’s material convertible debt and derivative liabilities are based on multiple factors, 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. We believe these inputs will be subject to even more significant changes due to the impact on capital markets of Covid-19, and the future estimated fair value of these liabilities may fluctuate materially from period to period. 

Without a current source of revenue, we are currently dependent on debt or equity financing to fund our operations and execute our business plan. We believe that the impact on capital markets of Covid-19 may make it more costly and more difficult for us to access these sources of funding.

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

During the three months ended March 31, 2020, the Company issued a total of 11,425,639 shares of common stock: 1,645,256 shares for the conversion of $8,600 of principal of convertible notes payable and accrued interest payable of $1,589; 9,777,778 shares for the conversion of 1,100 shares of Series B preferred stock recorded at par value; and 2,605 shares for the rounding of shares in the February 2020 reverse stock split recorded at par value.  In connection with the convertible debt and Series B preferred stock conversions, the Company reduced derivative liabilities by $263,131. 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

37

ITEM 6. EXHIBITS

2.1	Agreement and Plan of Merger, dated as of November 30, 2018, by and among Digital Locations, Inc., EllisLab, Inc., Rick Ellis and EllisLab Corp. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 3, 2018
3.1	Articles of Incorporation of Carbon Sciences, Inc. filed with the Nevada Secretary of State on August 25, 2007 (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed on July 27, 2007).
3.2	Articles of Amendment of Articles of Incorporation of Carbon Sciences, Inc. filed with the Nevada Secretary of State on April 9, 2007 (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed on July 27, 2007).
3.3	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on May 9, 2011 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on May 16, 2011).
3.4	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on August 1, 2011 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 4, 2011).
3.5	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on August 26, 2013 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2017).
3.6	Series A Preferred Stock Certificate of Designation of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 17, 2016).
3.7	Series B Preferred Stock Certificate of Designation of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on March 4, 2016).
3.8	Certificate of Correction, filed with the Nevada Secretary of State on April 1, 2016 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on May 16, 2016)
3.9	Certificate of Change, filed with the Nevada Secretary of State on April 14, 2016 (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on May 16, 2016).
3.10	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on June 15, 2016 (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 21, 2017)
3.11	Withdrawal of Series A Certificate of Designation of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 7, 2017).
3.12	Series A Certificate of Designation of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 7, 2017).
3.13	Certificate of Amendment to Articles of Incorporation, filed with the Nevada Secretary of State on November 16, 2017 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on November 24, 2017)
3.14	Bylaws of Carbon Sciences, Inc. (Incorporated by reference to the Company’s Registration Statement on Form SB-2 filed on July 27, 2007).
3.15	Certificate of Designation of Series C Convertible Preferred Stock of Digital Locations, Inc. filed with the Nevada Secretary of State on November 30, 2 018 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 3, 2018)
3.16	Certificate of Designation of Series D Convertible Preferred Stock of Digital Locations, Inc. filed with the Nevada Secretary of State on November 27, 2019 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 3, 2019)
3.17	Certificate of Change, filed with the Nevada Secretary of State on February 13, 2020 (Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 20, 2020).
4.1	Form of Warrant issued in connection with Stock Purchase Agreement entered into between the Company and the Purchasers, signatory thereto. (Incorporated by reference to the Company’s Registration Statement on S-1 filed on November 7, 2011)

38

10.1	Carbon Sciences, Inc. 2011 Equity Incentive Plan. (Incorporated by reference to the Company’s Registration Statement on S-1 filed on November 7, 2011)
10.2	Consulting Agreement between Carbon Sciences, Inc. and William E. Beifuss, Jr., dated May 31, 2013. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed on March 31, 2014)
10.3	Stock Option Agreement between Carbon Sciences, Inc. and Byron Elton, dated September 23, 2013. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2017)
10.4	Stock Option Agreement between Carbon Sciences, Inc. and William Beifuss, Jr., dated September 23, 2013. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2017)
10.5	Form of Promissory Note. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 19, 2017)
10.6	Nonstatutory Stock Option Agreement, dated as of November 30, 2018, between Digital Locations, Inc. and Derek Jones (Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 3, 2018)
10.7	Convertible Promissory Note, dated May 24, 2019, between Digital Locations, Inc. and Power Up Lending Group Ltd. (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)
10.8	Convertible Promissory Note, dated June 27, 2019, between Digital Locations, Inc. and Power Up Lending Group Ltd. (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)
10.9	Convertible Promissory Note, dated August 13, 2019, between Digital Locations, Inc. and Power Up Lending Group Ltd. (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)
10.10	Convertible Promissory Note, dated January 25, 2019, between Digital Locations, Inc. and Crown Bridge Partners, LLC (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)
10.11	Convertible Promissory Note, dated May 23, 2019, between Digital Locations, Inc. and Crown Bridge Partners, LLC (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)
10.12	Convertible Promissory Note, dated May 23, 2019, between Digital Locations, Inc. and Crown Bridge Partners, LLC (Incorporated by reference to the Company’s Annual Report on Form 10-K filed on April 14, 2020)

31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Acting Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Chief Executive Officer furnished pursuant to Section 1350 of Chapter 63 of 18 U.S.C. as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of the Acting Chief Financial Officer furnished pursuant to Section 1350 of Chapter 63 of 18 U.S.C. 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

39

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 May 26, 2020.

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

40

EX-31.1

EXHIBIT 31.1

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 March 31, 2020;
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.

Date: May 26, 2020	By:	/s/ William E. Beifuss, Jr.
		William E. Beifuss, Jr.
		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 March 31, 2020;
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.

Date: May 26, 2020	By:	/s/ William E. Beifuss, Jr.
		William E. Beifuss, Jr.
		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 March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William E. Beifuss, Jr., 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.

Date: May 26, 2020	By:	/s/ William E. Beifuss, Jr.
		William E. Beifuss, Jr.
		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 March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William E. Beifuss, Jr., 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.

Date: May 26, 2020	By:	/s/ William E. Beifuss, Jr.
		William E. Beifuss, Jr.
		Acting Chief Financial Officer
		(Principal Financial/Accounting Officer)

XML

PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Total	$ 13,762	$ 13,762
Less accumulated depreciation	(13,221)	(13,167)
Net	541	595
Computer Equipment [Member]
Total	12,303	12,303
Office Furniture and Equipment [Member]
Total	$ 1,459	$ 1,459

XML

Consolidated Balance Sheets - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash	$ 18,715	$ 8,275
Prepaid expenses		2,808
Total current assets	18,715	11,083
Property and equipment, net	541	595
Operating lease right to use	4,877	7,708
Total assets	24,133	19,386
Current liabilities:
Accounts payable	183,651	126,478
Accrued expenses and other current liabilities	12,085	3,332
Accrued interest, notes payable	647,139	581,610
Operating lease liability	4,877	7,708
Derivative liabilities	6,003,493	6,160,895
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 ($22,378 in default at March 31, 2020), net of discount of $152,238 and $258,518, respectively	2,514,085	2,378,405
Total current liabilities	9,453,430	9,346,528
Total liabilities	9,453,430	9,346,528
Stockholders' deficit:
Preferred stock, $0.001 par value; 20,000,000 shares authorized:
Common stock, $0.001 par value; 2,000,000,000 shares authorized, 12,475,019 and 1,049,380 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	12,475	1,049
Additional paid-in capital	26,199,530	25,937,634
Accumulated deficit	(35,641,317)	(35,265,842)
Total stockholders' deficit	(9,429,297)	(9,327,142)
Total liabilities and stockholders' deficit	24,133	19,386
Preferred Stock Series B [Member]
Stockholders' deficit:
Preferred stock, $0.001 par value; 20,000,000 shares authorized:	15	16
Preferred Stock Series D [Member]
Stockholders' deficit:
Preferred stock, $0.001 par value; 20,000,000 shares authorized:		$ 1

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income (loss)	$ (375,475)	$ 2,782,851
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	54	76
Amortization of debt discount to interest expense	125,046	165,045
(Gain) loss on change in derivative liabilities	89,963	(3,225,346)
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses	2,808	(26,076)
Increase (decrease) in:
Accounts payable	57,173	26,397
Accrued expenses	8,753	1,810
Accrued interest, notes payable	67,118	56,805
Change in net assets of discontinued operations		8,549
Net cash used in operating activities	(24,560)	(209,888)
Cash flows from investing activities
Cash flows from financing activities:
Proceeds from convertible notes payable	35,000	192,000
Net cash provided by financing activities	35,000	192,000
Net increase (decrease) in cash	10,440	(17,888)
Cash, beginning of period	8,275	19,232
Cash, end of period	18,715	1,344
Supplemental Disclosure:
Cash paid for income taxes
Cash paid for interest		1,876
Non-cash financing and investing activities:
Debt discount for derivative liabilities	15,766	192,000
Common shares issued in conversion of debt	10,189	2,964
Common shares issued in conversion of Series B preferred shares	1
Reverse split rounding of shares	3
Redemption of Series D preferred stock	1
Settlement of derivative liabilities	263,131	8,309
Increase in other assets and operating lease liability		$ 18,352

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STOCK OPTIONS AND WARRANTS (Details)	3 Months Ended
	Mar. 31, 2020 USD ($) $ / shares shares
Number of stock options and warrants shares
Outstanding shares, Beginning Balance | shares	184,001
Granted | shares
Exercised | shares
Forfeited or expired | shares
Outstanding shares, Ending Balance | shares	184,001
Weighted Average Exercise Price
Weighted average exercise price, Beginning Balance | $ / shares	$ 1.544
Weighted average exercise price, granted | $ / shares
Weighted average exercise price, exercised | shares
Weighted average exercise price, forfeited or expired | $ / shares
Weighted average exercise price, Ending Balance | $ / shares	$ 1.544
Weighted Average Remaining Contract Term (Years)
Weighted Average Remaining Contract Term, Beginning Balance	8 years 7 months 24 days
Weighted Average Remaining Contract Term, Granted
Weighted Average Remaining Contract Term, Exercised
Weighted Average Remaining Contract Term, Forfeited or expired
Weighted Average Remaining Contract Term, Ending Balance	8 years 4 months 24 days
Aggregate Intrinsic Value
Aggregated Intrinsic Value, Beginning Balance | $
Aggregated Intrinsic Value, Granted | $ / shares
Aggregated Intrinsic Value, Exercised | $
Aggregated Intrinsic Value, Forfeited or expired | $ / shares
Aggregated Intrinsic Value, Ending Balance | $

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Sep. 30, 2019	Mar. 31, 2020	Dec. 31, 2019
Accounts payable		$ 183,651	$ 126,478
Mr. Beifuss [Member]
Accounts payable		40,000	$ 10,000
William E. Beifuss Jr. [Member]
Consulting fees for service, per month		$ 10,000
Preferred Stock Series D [Member] | November 2019 [Member] | Mr. Beifuss [Member]
Common stock, issued, shares		1,000
Common shares issued, amount		$ 15,000
Conversion price description		The shares were automatically redeemed in January 2020, 120 days after the effective date of the related Series D Preferred Stock Certificate
Purchase and Sale Agreement[Member] | EllisLab, Inc [Member] | Series C Convertible Preferred Stock [Member]
Sale of Common stock issued and outstanding shares, shares	36,000

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2020

COMMITMENTS AND CONTINGENCIES

10. COMMITMENTS AND CONTINGENCIES

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”) in the amount of $18,352. 

As of March 31, 2020 and December 31, 2019, the operating lease liability (recorded as a current liability) and ROU asset had a balance of $4,877 and $7,708, respectively.

For the three months ended March 31, 2020 and 2019, the Company recognized operating lease cost of $3,000, 

The table below reconciles the Company’s future cash obligations for the operating lease liability recorded on the consolidated balance sheet as March 31, 2020:

2020	$	5,000
Less amount representing interest		(123	)
Present value of operating lease obligation	$	4,877

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CAPITAL STOCK

3 Months Ended

Mar. 31, 2020

CAPITAL STOCK

6. CAPITAL STOCK

At March 31, 2020, 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 March 31, 2020 and December 31, 2019, the Company had 15,055 and 16,155 shares of Series B Preferred Stock outstanding, respectively, with a face value of $1,505,500 and $1,615,500, respectively.  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.  Effective February 26, 2020, William Beifuss, Jr., the Company’s President, converted 1,100 shares of Series B preferred stock into 9,777,778 shares of the Company’s common stock. Mr. Beifuss previously acquired the Series B shares from a lender in a private transaction.

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 six hundred thousand 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 surrendered and cancelled on September 30, 2019 pursuant to the sale of EllisLab Corp.

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 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 have 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 Preferred Stock contains a blocker that prevents the Holder from converting the Series C Preferred Stock 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.

Series D Preferred Stock

On November 27, 2019, the Company filed a Certificate of Designation for its Series D Preferred Stock (the “Series D Certificate”) with the Secretary of State of Nevada which designates 1,000 shares of the Company’s preferred stock par value $0.001 per share as Series D Preferred Stock. William E. Beifuss, Jr., the Company’s President and Chief Executive Officer, was issued 1,000 shares of Series D Preferred Stock valued at $15,000 by an independent valuation firm, which shares were outstanding as of December 31, 2019. The 1,000 shares of Series D preferred stock were automatically redeemed on January 11, 2020, 45 days after the effective date of the Series D Certificate.

Pursuant to the terms of the Designation, holders of Series D Preferred Stock shall not be entitled to dividends or a liquidation preference and shall have no conversion rights. For so long as any shares of the Series D Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have the right to vote in an amount equal to fifty-one percent (51%) of the total voting power of the Company’s shareholders. Such vote shall be determined by the holder(s) of a majority of the then issued and outstanding shares of Series D Preferred Stock.

The shares of the Series D Preferred Stock shall be automatically, and without any required action by the Company or the holders thereof, redeemed by the Company at their par value on the first to occur of the following triggering events: (i) a date forty-five (45) days as after the Effective Date, (ii) on the date that Mr. Beifuss. ceases, for any reason, to serve as officer, director or consultant of the Company, it being understood that if Mr. Beifuss continues without interruption to serve thereafter in one or more capacities as officer, director or consultant of the Company this shall not be considered a cessation of service, or (iii) on the date that the Company’s shares of common stock first trade on any national securities exchange and such listing is conditioned upon the elimination of the preferential voting rights of the Series D Preferred Stock set forth in the Certificate of Designation.

Common Stock

Effective February 14, 2020, the Company effected a reverse split of its common stock at a ratio of one for two hundred twenty-five shares (1:225) with the filing of a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada. The Company has given retroactive effect for the reverse stock split in its financial statements and notes thereto for all periods presented.

As of March 31, 2020 and December 31, 2019, the Company had 12,475,019 and 1,049,380 shares of common stock issued and outstanding, respectively.

During the three months ended March 31, 2020, the Company issued a total of 11,425,639 shares of common stock: 1,645,256 shares for the conversion of $8,600 of principal of convertible notes payable and accrued interest payable of $1,589; 9,777,778 shares for the conversion of 1,100 shares of Series B preferred stock recorded at par value; and 2,605 shares for the rounding of shares in the February 2020 reverse stock split recorded at par value.  In connection with the convertible debt and Series B preferred stock conversions, the Company reduced derivative liabilities by $263,131.  There was no gain or loss on settlement of debt due to the conversions occurring within the terms of the underlying agreements

During the three months ended March 31, 2019, the Company issued 1,976,160 shares of common stock at fair value in consideration for the conversion of $2,285 of principal of convertible promissory notes and accrued interest payable of $679. In connection with the convertible debt conversion, the Company reduced derivative liabilities by $8,309.  There was no gain or loss on settlement of debt due to the conversion occurring within the terms of the convertible note.

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COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)		3 Months Ended		12 Months Ended
	Sep. 05, 2017	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Rent per month	$ 1,000
Operating lease right to use		4,877		$ 7,708
Operating lease cost		3,000	$ 3,000
Increase in other assets and operating lease liability			$ 18,352

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basic weighted average number of shares	5,115,166	183,747
Dilutive effect of:
Stock options		471,380
Series B preferred stock		1,595,556
Convertible notes payable		3,709,698
Diluted weighted average number of shares	5,115,166	5,960,381

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ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Sep. 30, 2019	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018	Nov. 30, 2018
State of incorporation		Nevada
Incorporation of date		Aug. 25, 2006
Working capital deficit		$ (9,434,715)
Reverse stock split		Reverse split of its common stock at a ratio of one for two hundred twenty-five shares (1:225)
Total stockholders' deficit		$ (9,429,297)	$ (9,327,142)	$ (9,879,366)	$ (12,673,490)
Purchase and Sale Agreement[Member] | EllisLab, Inc [Member] | Series C Convertible Preferred Stock [Member]
Sale of Common stock issued and outstanding shares, amount	$ 10,000
Sale of Common stock issued and outstanding shares, shares	36,000
Merger Agreement[Member] | EllisLab, Inc [Member] | Series C Convertible Preferred Stock [Member]
Ownership percentage						100.00%

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2020

PROPERTY AND EQUIPMENT

Schedule of Property and equipment

	March 31, 2020			December 31, 2019
Computer equipment	$	12,303		$	12,303
Office furniture and equipment		1,459			1,459
Total		13,762			13,762
Less accumulated depreciation		(13,221	)		(13,167	)
Net	$	541		$	595

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COMMITMENTS AND CONTINGENCIES (Details)	Mar. 31, 2020 USD ($)
COMMITMENTS AND CONTINGENCIES
2020	$ 5,000
Less amount representing interest	(123)
Present value of operating lease obligation	$ 4,877

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended
	Mar. 31, 2020
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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STOCK OPTIONS AND WARRANTS (Tables)

3 Months Ended

Mar. 31, 2020

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, 2019		184,001	$	1.544		8.65
Granted		-	$	-
Exercised		-	$	-
Forfeited or expired		-	$	-
Outstanding at March 31, 2020		184,001	$	1.544		8.40	$	-

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)		3 Months Ended		12 Months Ended
	Sep. 05, 2017	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
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

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DERIVATIVE LIABILITIES (Details 1) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Derivative liability	$ 6,003,493	$ 6,160,895
Convertible Notes Payable [Member]
Derivative liability	3,281,636	3,606,194
Series B Preferred Stock [Member]
Derivative liability	2,719,717	2,535,359
Warrants [Member]
Derivative liability	$ 2,140	$ 19,342

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Convertible notes payable - related parties in default	$ 25,980	$ 25,980
Convertible notes payable in default	22,378
Convertible notes payable, net of discount	$ 152,238	$ 258,518
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	12,475,019	1,049,380
Common stock, shares outstanding	12,475,019	1,049,380
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 outstanding	15,055	16,155
Preferred stock, shares issued	15,055	16,155
Preferred Stock Series D [Member]
Stockholders' deficit
Preferred stock, shares outstanding	0	1,000
Preferred stock, shares issued	0	1,000

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MERGER AND SUBSEQUENT SALE (Details Narrative) - EllisLab, Inc [Member] - Series C Convertible Preferred Stock [Member] - USD ($)	1 Months Ended
	Sep. 30, 2019	Nov. 30, 2018
Purchase and Sale Agreement[Member]
Sale of Common stock issued and outstanding shares, shares	36,000
Sale of Common stock issued and outstanding shares, amount	$ 10,000
Merger Agreement[Member]
Share price		$ 100
Business combination, consideration transferred, shares issued		36,000
Ownership percentage		100.00%

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CAPITAL STOCK (Details Narrative) - USD ($)		1 Months Ended					3 Months Ended
	Jan. 11, 2020	Feb. 29, 2020	Feb. 26, 2020	Feb. 14, 2020	Nov. 30, 2018	Mar. 31, 2016	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Sep. 30, 2019	Mar. 02, 2016
Reverse stock split description				The Company effected a reverse split of its common stock at a ratio of one for two hundred twenty-five shares (1:225) with the filing of a Certificate of Amendment to its Articles of Incorporation
Common stock, par value							$ 0.001		$ 0.001
Common stock, authorized shares							2,000,000,000		2,000,000,000
Preferred stock, par value							$ 0.001		$ 0.001
Preferred stock, authorized shares							20,000,000		20,000,000
Debt conversion original debt amount							$ 8,600	$ 2,285
Debt conversion, converted instrument, shares issued							11,425,639	1,976,160
Gain (loss) on settlement of debt
Penalty per day for failer to deliver of shares									$ 1,500
Accrued interest payable							1,589	$ 679
Derivative liability							$ 263,131	$ 8,309
Common stock, outstanding shares							12,475,019		1,049,380
Common stock shares issued upon preferred stock conversion							9,777,778
Preferred stock converted							1,100
Common stock, issued shares							12,475,019		1,049,380
Rounding of shares		$ 2,605
Convertible Promissory Notes [Member]
Debt conversion original debt amount						$ 1,615,362
Accrued Interest Payable [Member]
Debt conversion original debt amount						$ 264,530
EllisLab, Inc [Member]
Series C preferred stock outstanding										36,000
Preferred Stock Series D [Member]
Common stock, designated shares							1,000
Voting right percentage							51.00%
Common shares issued, amount							$ 15,000
Redemption of share	1,000
Description of redemption	Series D preferred stock were automatically redeemed on 45 days after the effective date of the Series D Certificate
Preferred stock, outstanding shares							0		1,000
Series B Preferred Stock [Member]
Preferred stock, outstanding shares							15,055		16,155
Preferred Stock Series B [Member]
Preferred stock, par value							$ 100				$ 0.001
Preferred stock, authorized shares											30,000
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").
Preferred stock including additional paid in capital							$ 3,000,000
Preferred stock, outstanding shares							15,055		16,155
Preferred stock value outstanding							$ 1,505,500		$ 1,615,500
Outstanding common share, percentage									4.99%
Preferred Stock Series C [Member]
Reverse stock split description					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.
Preferred stock, par value					$ 0.001
Preferred stock, authorized shares					36,000
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%
Preferred stock face value					$ 3,600,000
Preferred stock face value per shares					$ 100
William E. Beifuss Jr. [Member] | Series B Preferred Stock [Member]
Common stock shares issued upon preferred stock conversion			9,777,778
Preferred stock converted			1,100
Description of voting rights after merger

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ORGANIZATION AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2020

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

On September 30, 2019, the Company, entered into an Agreement for the Purchase and Sale of Capital Stock of EllisLab Corp. (the “EllisLab Corp. Sale Agreement”) with Rick Ellis to sell to Rick Ellis all of the issued and outstanding shares of EllisLab Corp. for $10,000 and the 36,000 shares of the Company’s Series C preferred stock acquired by Rick Ellis in the Merger, which represents all of the issued and outstanding shares of the Series C preferred stock. In connection with the EllisLab Corp. Sale Agreement, the covenant not to compete and the lockup of stock consideration entered into in connection with the Merger were terminated and the parties’ obligations thereunder were released.  Pursuant to the Ellis Lab Corp. Sale Agreement, the Company effectively divested itself of the Ellis Lab business and discontinued it. 

Consequently, the revenues and expenses for EllisLab Corp. are reported as “Loss from discontinued operations, net of income taxes” in our condensed statements of operations for the three months ended March 31, 2019. The EllisLab Corp. assets and liabilities have been retroactively reclassified as assets and liabilities of discontinued operations.  See Note 3.  All significant intercompany accounts and transactions have been eliminated.

Effective February 14, 2020, the Company effected a reverse split of its common stock at a ratio of one for two hundred twenty-five shares (1:225) (the “Stock Split”) with the filing of a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada.  The Company has given retroactive effect for the Stock Split in its financial statements and notes thereto for all periods presented.

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 ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.  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, 2019.

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 March 31, 2020, our current liabilities exceeded our current assets by $9,434,715 and we had a total stockholders’ deficit of $9,429,297.  In addition, subsequent to the EllisLab Corp. Sale Agreement which closed on September 30, 2019, the Company does not have any sources of revenues, 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. 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.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2020

SUBSEQUENT EVENTS

11. SUBSEQUENT EVENTS

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

Convertible Note Conversions

Subsequent to March 31, 2020, a lender converted a total of $4,000 of principal into 1,230,550 shares of the Company’s common stock.

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STOCK OPTIONS AND WARRANTS

3 Months Ended

Mar. 31, 2020

STOCK OPTIONS AND WARRANTS

7. STOCK OPTIONS AND WARRANTS

As of March 31, 2020, the Board of Directors of the Company had granted non-qualified stock options and warrants exercisable for a total of 184,001 shares of common stock to its employees, officers, and consultants. 

We recognized no stock-based compensation expense for the three months ended March 31, 2020 and 2019.

As of March 31, 2020, we had no unrecognized stock-based compensation expense.

A summary of the Company’s stock options and warrants as of March 31, 2020, and changes during the three months then ended is as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2019		184,001	$	1.544		8.65
Granted		-	$	-
Exercised		-	$	-
Forfeited or expired		-	$	-
Outstanding at March 31, 2020		184,001	$	1.544		8.40	$	-

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the closing price of our common stock of $0.0080 as of March 31, 2020, 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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SUBSEQUENT EVENT (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Debt conversion, converted instrument, shares issued	11,425,639	1,976,160
Subsequent Event [Member] | Convertible Note Conversions [Member]
Debt conversion, converted instrument, amount	$ 4,000
Debt conversion, converted instrument, shares issued	1,230,550

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2)	3 Months Ended
	Mar. 31, 2020 USD ($)
Derivative liability beginning	$ 6,160,895
Addition to liabilities for new debt/shares issued	15,766
Elimination of liability for debt conversion	(263,131)
Change in fair value	89,963
Derivative liability ending	6,003,493
Stock Options [Member]
Derivative liability beginning	19,342
Addition to liabilities for new debt/shares issued
Elimination of liability for debt conversion
Change in fair value	(17,202)
Derivative liability ending	2,140
Preferred Stock Series B [Member]
Derivative liability beginning	2,535,359
Addition to liabilities for new debt/shares issued
Elimination of liability for debt conversion	(234,855)
Change in fair value	419,213
Derivative liability ending	2,719,717
Convertible Notes Payable [Member]
Derivative liability beginning	3,606,194
Addition to liabilities for new debt/shares issued	15,766
Elimination of liability for debt conversion	(28,276)
Change in fair value	(312,048)
Derivative liability ending	$ 3,281,636

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2020

COMMITMENTS AND CONTINGENCIES (Tables)

Schedule of future minimum rental payments for operating leases

2020	$	5,000
Less amount representing interest		(123	)
Present value of operating lease obligation	$	4,877

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of Property and Equipment estimated useful life

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

Schedule of Fair Value Measurements, Assets and Liabilities, Recurring Basis

	Total		Level 1		Level 2		Level 3
March 31, 2020:
Derivative liabilities	$	6,003,493	$	-	$	-	$	6,003,493
Total liabilities measured at fair value	$	6,003,493	$	-	$	-	$	6,003,493
December 31, 2019:
Derivative liabilities	$	6,160,895	$	-	$	-	$	6,160,895
Total liabilities measured at fair value	$	6,160,895	$	-	$	-	$	6,160,895

Schedule of activity in derivative liabilities at fair value

	Convertible Notes Payable			Series B Preferred Stock			Stock Options			Total
Derivative liabilities at December 31, 2019	$	3,606,194		$	2,535,359		$	19,342		$	6,160,895
Addition to liabilities for new debt/shares issued		15,766			-			-			15,766
Elimination of liabilities for debt conversions		(28,276	)		(234,855	)		-			(263,131	)
Change in fair value		(312,048	)		419,213			(17,202	)		89,963
Derivative liabilities at March 31, 2020	$	3,281,636		$	2,719,717		$	2,140		$	6,003,493

Schedule of weighted average number of shares

	Three Months Ended March 31,
	2020		2019
Basic weighted average number of shares		5,115,166		183,747
Dilutive effect of:
Stock options		-		471,380
Series B preferred stock		-		1,595,556
Convertible notes payable		-		3,709,698
Diluted weighted average number of shares		5,115,166		5,960,381

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2020

RELATED PARTY TRANSACTIONS

9. 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, Chief Executive Officer and Acting Chief Financial Officer, is to receive fees for services of $10,000 per month.  Fees payable to Mr. Beifuss of $40,000 and $10,000 are included in accounts payable as of March 31, 2020 and December 31, 2019, respectively.

As discussed in Note 3, the Company issued 36,000 shares of Series C Preferred Stock to Rick Ellis, the former Chief Executive Officer of the Company and Chief Executive Officer of EllisLab Corp., in the EllisLab Corp. Merger, which shares were surrendered and cancelled on September 30, 2019 pursuant to the EllisLab Corp. Sale Agreement.

As discussed in Note 7, in November 2019, the Company issued to Mr. Beifuss 1,000 shares of Series D Preferred Stock for services valued at $15,000 by an independent valuation firm.  The shares were automatically redeemed in January 2020, 120 days after the effective date of the related Series D Preferred Stock Certificate.

See Note 5 for discussion of convertible notes payable with related parties.

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CONVERTIBLE NOTES PAYABLE

3 Months Ended

Mar. 31, 2020

CONVERTIBLE NOTES PAYABLE

5. CONVERTIBLE NOTES PAYABLE

Convertible Promissory Note of $29,500 in Default

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 March 31, 2020 and December 31, 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 March 31, 2020, 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 March 31, 2020 has been extended to December 31, 2020.

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 year ended December 31, 2018, we issued the lender a total of 8,772 shares of our common stock in consideration for the conversion of principal of $2,330 and accrued interest of $630. During the three months ended March 31, 2020, we issued the lender a total of 496,804 shares of our common stock in consideration for the conversion of principal of $4,000 and accrued interest of $1,589, resulting in a principal balance of $1,445 at March 31, 2020.

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.  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.  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.  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.  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.  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.  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.  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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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. Subsequently, the lender extended the maturity date, with the note payable upon demand, but in no event later than 60 months from August 17, 2018.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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.  The debt discount has been fully amortized to interest expense.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $1,164 and the debt discount has been fully amortized to interest expense.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $3,836 and the debt discount has been fully amortized to interest expense.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $5,601 and the debt discount has been fully amortized to interest expense.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $3,525 and the debt discount has been fully amortized to interest expense.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $3,730, resulting in a remaining debt discount of $451 as of March 31, 2020.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $16,151, resulting in a remaining debt discount of $3,374 as of March 31, 2020.

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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $7,459, resulting in a remaining debt discount of $7,295 as of March 31, 2020.

On July 29, 2019, we received proceeds of $40,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $40,000 related to the conversion feature of the note, along with a derivative liability at inception. During the three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $9,945, resulting in a remaining debt discount of $13,115 as of March 31, 2020.

On September 27, 2019, we received proceeds of $33,000 pursuant to the August 2018 $500,000 CPN. We recorded a debt discount of $33,000 related to the conversion feature of the note, along with a derivative liability at inception. During the three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $16,230 as of March 31, 2020.

On October 8, 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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $6,216, resulting in a remaining debt discount of $13,046 as of March 31, 2020.

October 2019 Convertible Promissory Note – $500,000

On October 31, 2019, we entered into an agreement to issue a 10% convertible promissory note in the aggregate principal amount of up to $500,000 (the “October 2019 $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 October 31, 2019, we received proceeds of $25,000 pursuant to the October 2019 $500,000 CPN.

On October 31, 2019, we received proceeds of $25,000 pursuant to the October 2019 $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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $6,216, resulting in a remaining debt discount of $14,617 as of March 31, 2020.

On November 12, 2019, we received proceeds of $25,000 pursuant to the October 2019 $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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $6,216, resulting in a remaining debt discount of $15,437 as of March 31, 2020.

On December 19, 2019, we received proceeds of $25,000 pursuant to the October 2019 $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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $6,216, resulting in a remaining debt discount of $17,964 as of March 31, 2020.

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 matured on January 25, 2020 and is currently in default.  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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $1,415 and the debt discount has been fully amortized to interest expense. The note had a principal balance of $22,378 as of March 31, 2020.

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 on 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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $4,779 as of March 31, 2020.  The note had a principal balance of $33,000 as of March 31, 2020.

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 on May 24, 2020.  On January 16, 2020, the note was assigned to another institutional investor.  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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $5,551, resulting in a remaining debt discount of $2,213 as of March 31, 2020.  During the three months ended March 31, 2020, we issued the lender a total of 1,148,452 shares of our common stock in consideration for the conversion of principal of $4,600, resulting in a principal balance of $15,000 as of March 31, 2020.

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 on June 27, 2020. On January 16, 2020, the note was assigned to another institutional investor.  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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $4,779 as of March 31, 2020.  The note had a principal balance of $33,000 as of March 31, 2020.

August 13, 2019 Convertible Promissory Note – $33,000

Effective August 13, 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 on August 13, 2020. On January 16, 2020, the note was assigned to another institutional investor.  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 three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $12,172 as of March 31, 2020.  The note had a principal balance of $33,000 as of March 31, 2020.

August 29, 2019 Convertible Promissory Note – $25,000

Effective August 29, 2019, the Company entered into an agreement to issue a 10% convertible note with an institutional investor in the principal amount of $25,000. The note matures on August 29, 2020. The Company received proceeds of $22,000 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 $25,000 related to the conversion feature of the note, along with a derivative liability at inception. During the three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $8,205, resulting in a remaining debt discount of $5,615 as of March 31, 2020.  The note had a principal balance of $25,000 as of March 31, 2020.

March 16, 2020 Convertible Promissory Note – $38,000

Effective March 16, 2020, the Company entered into a 12% convertible note with an institutional investor in the principal amount of $38,000. The note matures March 16, 2021. The Company received net proceeds of $35,000 after payment of $3,000 in legal fees and fees to the lender. 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 45% discount from the lowest trading price during the 20 trading days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at a redemption premium of 150%. After the expiration of 180 days after issuance, the Company has no right of prepayment.  We recorded a debt discount of $18,766 related to the conversion feature of the note, along with a derivative liability at inception. During the three months ended March 31, 2020, amortization of debt discount was recorded to interest expense in the amount of $771, resulting in a remaining debt discount of $17,995 as of March 31, 2020.  The note had a principal balance of $38,000 as of March 31, 2020.

Total accrued interest payable on notes payable was $647,139 and $581,610 as of March 31, 2020 and December 31, 2019, respectively.

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MERGER AND SUBSEQUENT SALE

3 Months Ended

Mar. 31, 2020

MERGER AND SUBSEQUENT SALE

3. MERGER AND SUBSEQUENT SALE

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 Stock, 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.  The acquisition of EllisLab, Inc. in the Merger has been accounted for as a purchase, and the accounts of EllisLab Corp. were consolidated with those of the Company as of December 1, 2018.

On September 30, 2019, the Company, entered into an Agreement for the Purchase and Sale of Capital Stock of EllisLab Corp. (the “EllisLab Corp. Sale Agreement”) with Ellis to sell to Ellis all of the issued and outstanding shares of EllisLab Corp. for $10,000 and the 36,000 shares of the Company’s Series C Convertible Preferred Stock owned by him, which represents all of the issued and outstanding shares of the Series C Convertible Preferred Stock.  Pursuant to the Ellis Lab Corp. Sale Agreement, the Company effectively divested itself of the Ellis Lab business and discontinued it.  Consequently, the revenues and expenses for EllisLab Corp. are reported as “Loss from discontinued operations, net of income taxes” in our condensed statements of operations for the three months ended March 31, 2019.  When presented, the EllisLab Corp. assets and liabilities have been retroactively reclassified as assets and liabilities of discontinued operations

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
PROPERTY AND EQUIPMENT
Depreciation and amortization	$ 54	$ 76

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 26, 2020
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	Mar. 31, 2020
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Entity Common Stock Shares Outstanding		13,705,569
Entity Interactive Data Current	Yes

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Condensed Statement of Stockholders' Deficit (Unaudited) - USD ($)	Total	Series B Preferred Stock [Member]	Series C Preferred Stock [Member]	Series D Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Balance, shares at Dec. 31, 2018		16,155	36,000		181,112
Balance, amount at Dec. 31, 2018	$ (12,673,490)	$ 16	$ 36		$ 181	$ 25,533,544	$ (38,207,267)
Issuance of common stock for conversion of notes payable and accrued interest payable, shares					8,783
Issuance of common stock for conversion of notes payable and accrued interest payable, amount	2,964				$ 9	2,955
Settlement of derivative liabilities	8,309					8,309
Net income	$ 2,782,851						$ 2,782,851
Balance, shares at Mar. 31, 2019		16,155	36,000		189,895
Balance, amount at Mar. 31, 2019	$ (9,879,366)	$ 16	$ 36		$ 190	$ 25,544,808	$ (35,424,416)
Balance, shares at Dec. 31, 2019		16,155		1,000	1,049,380
Balance, amount at Dec. 31, 2019	$ (9,327,142)	$ 16		$ 1	$ 1,049	$ 25,937,634	$ (35,265,842)
Issuance of common stock for conversion of notes payable and accrued interest payable, shares					1,645,256
Issuance of common stock for conversion of notes payable and accrued interest payable, amount	10,189				$ 1,645	8,544
Settlement of derivative liabilities	263,131					263,131
Net income	$ (375,475)						$ (375,475)
Issuance of common stock for conversion of Series B preferred stock, shares		(1,100)			9,777,778
Issuance of common stock for conversion of Series B preferred stock, amount		$ (1)			$ 9,778	(9,777)
Reverse split rounding of shares, shares					2,605
Reverse split rounding of shares, amount					$ 3	(3)
Redemption of Series D preferred stock, shares				(1,000)
Redemption of Series D preferred stock, amount				$ (1)		$ 1
Balance, shares at Mar. 31, 2020		15,055			12,475,019
Balance, amount at Mar. 31, 2020	$ (9,429,297)	$ 15			$ 12,475	$ 26,199,530	$ (35,641,317)

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STOCK OPTIONS AND WARRANTS (Details Narrative)	Mar. 31, 2020 $ / shares shares
Number of non-qualified stock options and warrants exercisable | shares	184,001
Stock Option And Warrants [Member]
Closing price of common stock | $ / shares	$ 0.0080

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DERIVATIVE LIABILITIES

3 Months Ended

Mar. 31, 2020

DERIVATIVE LIABILITIES

8. 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 March 31, 2020 are as follows:

Conversion to stock	Monthly
Stock price on the valuation date	$	0.0080
Conversion price	$	0.0431 - $0.0030
Risk free interest rates	0.18% - 2.74		%
Years to maturity		15.0
Expected volatility	111%–373		%

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

	March 31, 2020		December 31, 2019
Convertible notes payable	$	3,281,636	$	3,606,194
Series B preferred stock		2,719,717		2,535,359
Warrants		2,140		19,342
Total	$	6,003,493	$	6,160,895

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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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2020

PROPERTY AND EQUIPMENT

4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	March 31, 2020			December 31, 2019
Computer equipment	$	12,303		$	12,303
Office furniture and equipment		1,459			1,459
Total		13,762			13,762
Less accumulated depreciation		(13,221	)		(13,167	)
Net	$	541		$	595

Depreciation expense was $54 and $76 for the three months ended March 31, 2020 and 2019, respectively.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING 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.

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.

Derivative Liabilities

We have identified the conversion features of our convertible notes payable and Series B preferred stock and certain stock options and warrants as derivatives. Where the number of common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional options, 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 March 31, 2020 and December 31, 2019, we believe the amounts reported for cash, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable 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 March 31, 2020 and December 31, 2019:

	Total		Level 1		Level 2		Level 3
March 31, 2020:
Derivative liabilities	$	6,003,493	$	-	$	-	$	6,003,493
Total liabilities measured at fair value	$	6,003,493	$	-	$	-	$	6,003,493
December 31, 2019:
Derivative liabilities	$	6,160,895	$	-	$	-	$	6,160,895
Total liabilities measured at fair value	$	6,160,895	$	-	$	-	$	6,160,895

During the three months ended March 31, 2020, 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, 2019	$	3,606,194		$	2,535,359		$	19,342		$	6,160,895
Addition to liabilities for new debt/shares issued		15,766			-			-			15,766
Elimination of liabilities for debt conversions		(28,276	)		(234,855	)		-			(263,131	)
Change in fair value		(312,048	)		419,213			(17,202	)		89,963
Derivative liabilities at March 31, 2020	$	3,281,636		$	2,719,717		$	2,140		$	6,003,493

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, included in loss from discontinued operations, were 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 were 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.

Subsequent to the EllisLab Corp. Sale Agreement, which closed on September 30, 2019, the Company does not have any sources of revenues.

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 March 31,
	2020		2019
Basic weighted average number of shares		5,115,166		183,747
Dilutive effect of:
Stock options		-		471,380
Series B preferred stock		-		1,595,556
Convertible notes payable		-		3,709,698
Diluted weighted average number of shares		5,115,166		5,960,381

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 three months ended March 31, 2020 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 ended March 31, 2019 have been reclassified to conform to the presentation for the three months ended March 31, 2020.

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CONVERTIBLE NOTES PAYABLE (Details Narrative)																																				1 Months Ended																														3 Months Ended		12 Months Ended
	Nov. 12, 2019 USD ($)	Oct. 08, 2019 USD ($)	Aug. 13, 2019 USD ($)	Apr. 11, 2019 USD ($)	Nov. 05, 2018 USD ($)	Oct. 08, 2018 USD ($)	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 ($)	Dec. 14, 2017 USD ($) integer $ / 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	Mar. 14, 2013 USD ($) $ / shares	Mar. 16, 2020 USD ($)	Feb. 14, 2020 USD ($)	Dec. 19, 2019 USD ($)	Oct. 31, 2019 USD ($)	Sep. 27, 2019 USD ($)	Aug. 29, 2019 USD ($)	Jul. 29, 2019 USD ($)	Jun. 28, 2019 USD ($)	Jun. 27, 2019 USD ($)	May 24, 2019 USD ($)	May 23, 2019 USD ($)	Apr. 19, 2019 USD ($)	Mar. 26, 2019 USD ($)	Mar. 22, 2019 USD ($)	Feb. 25, 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 ($)	Mar. 31, 2020 USD ($) shares	Mar. 31, 2019 USD ($) shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2019 USD ($)
Accrued interest																																																																		$ 647,139			$ 581,610
Amortization of debt discount to interest expense																																																																		125,046	$ 165,045
Convertible notes payable in default																																																																		$ 22,378
Debt conversion converted instrument, shares issued | shares																																																																		11,425,639	1,976,160
Debt conversion converted amount, principal																																																																		$ 8,600	$ 2,285
Convertible Notes Payable 2 [Member] | Related Parties [Member]
Debt discount																																																																	$ 57,050
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.
Debt instrument, interest rate																																																																	5.00%
Convertible promissory note, principal amount																																																																	$ 58,600
Convertible Notes Payable 2 [Member] | Related Parties [Member] | Note One [Member]
Debt Instrument, maturity date																																																																		Dec. 31, 2014
Convertible promissory note, principal amount																																																																		$ 25,980
Convertible Notes Payable 2 [Member] | Related Parties [Member] | Note Two [Member]
Debt Instrument, maturity date																																																																		Dec. 31, 2020
Convertible promissory note, principal amount																																																																		$ 32,620
Convertible Notes Payable 1 [Member] | Accounts Payable [Member]
Debt instrument, interest rate																																			5.00%
Debt Instrument, maturity date																																			Mar. 14, 2015
Convertible promissory note, principal amount																																			$ 29,500																															$ 29,500			29,500
Debt Instrument, conversion price | $ / shares																																			$ 1.50
Convertible Notes Payable 3 [Member] | August 2019 [Member]
Debt discount			$ 33,000
Amortization of debt discount to interest expense																																																																		8,205
Debt instrument remaining discount																																																																		12,172
Proceeds from convertible promissory notes			$ 33,000
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
Debt instrument, interest rate			10.00%
Debt Instrument, maturity date			Aug. 29, 2020
Convertible promissory note, principal amount			$ 33,000																																																															33,000
Fees and expenses			3,000																																																					$ 3,000
Common stock shares issued in consideration for conversion of debt, Amount
Common stock shares issued in consideration for conversion of debt, Shares | shares
October 2019 Convertible Promissory Note [Member] | Convertible Notes Payable 2 [Member]
Debt discount																																						$ 25,000
Amortization of debt discount to interest expense																																																																		$ 6,216
Debt instrument remaining discount																																																																		17,964
Proceeds from convertible promissory notes																																						25,000
October 2019 Convertible Promissory Note [Member] | Convertible Notes Payable 1 [Member]
Debt discount	25,000
Amortization of debt discount to interest expense																																																																		6,216
Debt instrument remaining discount																																																																		15,437
Proceeds from convertible promissory notes	$ 25,000
October 2019 Convertible Promissory Note [Member] | Convertible Notes Payable [Member]
Debt discount																																							25,000
Amortization of debt discount to interest expense																																																																		6,216
Debt instrument remaining discount																																																																		14,617
Proceeds from convertible promissory notes																																							$ 25,000
Debt instrument, convertible, terms of conversion feature																																							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.
Debt instrument, interest rate																																							10.00%
Debt Instrument, maturity date																																							Oct. 31, 2019
Convertible promissory note, principal amount																																							$ 500,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 58 [Member]
Debt discount																																								33,000																										16,230
Amortization of debt discount to interest expense																																																																		205
Proceeds from convertible promissory notes																																								$ 33,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 57 [Member]
Debt discount																																										40,000																								13,115
Amortization of debt discount to interest expense																																																																		9,945
Proceeds from convertible promissory notes																																										$ 40,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 55 [Member]
Debt discount																																											30,000																							7,295
Amortization of debt discount to interest expense																																																																		7,459
Proceeds from convertible promissory notes																																											$ 30,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 54 [Member]
Debt discount																																															$ 65,000																			3,374
Amortization of debt discount to interest expense																																																																		16,151
Proceeds from convertible promissory notes																																															$ 65,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 53 [Member]
Debt discount				15,000																																																														451
Amortization of debt discount to interest expense																																																																		3,730
Proceeds from convertible promissory notes				$ 15,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 41 [Member]
Debt discount		$ 25,000				$ 25,000																																																												13,046
Amortization of debt discount to interest expense						25,000																																																												6,216
Proceeds from convertible promissory notes		$ 25,000				$ 25,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 40 [Member]
Debt discount							$ 30,000
Amortization of debt discount to interest expense							30,000
Proceeds from convertible promissory notes							$ 30,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 44 [Member]
Debt discount																																																									$ 12,000
Amortization of debt discount to interest expense																																																									12,000
Proceeds from convertible promissory notes																																																									$ 12,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 45 [Member]
Debt discount					$ 25,000
Amortization of debt discount to interest expense					25,000
Proceeds from convertible promissory notes					$ 25,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 46 [Member]
Debt discount																																																							$ 30,000
Amortization of debt discount to interest expense																																																							30,000
Proceeds from convertible promissory notes																																																							$ 30,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 47 [Member]
Debt discount																																																						$ 10,000
Amortization of debt discount to interest expense																																																						10,000														$ 849
Proceeds from convertible promissory notes																																																						10,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 48 [Member]
Debt discount																																																					$ 50,000
Amortization of debt discount to interest expense																																																					50,000															959
Proceeds from convertible promissory notes																																																					$ 50,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 38 [Member]
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.
Debt instrument, interest rate																																																										10.00%
Convertible promissory note, principal amount																																																										$ 500,000
Debt Instrument, conversion price | $ / shares																																																										$ 0.01
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 49 [Member]
Debt discount																																																				$ 25,000														1,164
Amortization of debt discount to interest expense																																																																		1,164
Proceeds from convertible promissory notes																																																				$ 25,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 50 [Member]
Debt discount																																																		$ 25,000																3,836
Amortization of debt discount to interest expense																																																																		3,836
Proceeds from convertible promissory notes																																																		$ 25,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 51 [Member]
Debt discount																																																	$ 25,000																	5,601
Amortization of debt discount to interest expense																																																																		5,601
Proceeds from convertible promissory notes																																																	$ 25,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 52 [Member]
Debt discount																																																$ 15,000																		3,525
Amortization of debt discount to interest expense																																																																		3,525
Proceeds from convertible promissory notes																																																$ 15,000
August 2018 Convertible Promissory Note [Member] | Convertible Notes Payable 39 [Member]
Debt discount																																																										$ 10,500
Amortization of debt discount to interest expense																																																										10,500
Proceeds from convertible promissory notes																																																										$ 10,500
August 2019 Convertible Promissory Note [Member] | Convertible Notes Payable 1 [Member]
Debt discount																																									$ 25,000
Amortization of debt discount to interest expense																																																																		8,205
Debt instrument remaining discount																																																																		5,615
Proceeds from convertible promissory notes																																									$ 22,000
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
Debt instrument, interest rate																																									10.00%
Convertible promissory note, principal amount																																									$ 25,000																									25,000
Fees and expenses																																									$ 1,500															$ 3,000
June 2019 Convertible Promissory Note [Member]
Debt discount																																												33,000
Amortization of debt discount to interest expense																																																																		8,205
Debt instrument remaining discount																																																																		4,779
Proceeds from convertible promissory notes																																												$ 30,000
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.
Debt instrument, interest rate																																												10.00%
Debt Instrument, maturity date																																												Jun. 27, 2020
Convertible promissory note, principal amount																																												$ 33,000																						33,000
Fees and expenses																																												$ 3,000
May 2019 Convertible Promissory Note One [Member]
Debt discount																																													33,000
Amortization of debt discount to interest expense																																																																		5,551
Debt instrument remaining discount																																																																		2,213
Proceeds from convertible promissory notes																																													$ 30,000
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
Debt instrument, interest rate																																													10.00%
Debt Instrument, maturity date																																													May 24, 2020
Convertible promissory note, principal amount																																													$ 33,000																					15,000
Fees and expenses																																													$ 3,000
Common stock shares issued in consideration for conversion of debt, Amount																																																																		$ 4,600
Common stock shares issued in consideration for conversion of debt, Shares | shares																																																																		148,452
May 2019 Convertible Promissory Note [Member]
Debt discount																																														33,000
Amortization of debt discount to interest expense																																																																		$ 8,205
Debt instrument remaining discount																																																																		4,779
Proceeds from convertible promissory notes																																														$ 30,000
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
Debt instrument, interest rate																																														10.00%
Debt Instrument, maturity date																																														May 23, 2020
Convertible promissory note, principal amount																																														$ 33,000																				33,000
Fees and expenses																																														1,250
Original issue discount																																														$ 1,750
March 2019 Convertible Promissory Note [Member]
Debt discount																																				18,766
Amortization of debt discount to interest expense																																																																		771
Debt instrument remaining discount																																																																		17,995
Proceeds from convertible promissory notes																																				$ 32,000
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 45% discount from the lowest trading price during the 20 trading days prior to conversion. The Company may prepay the note during the 180 days from the issuance of the note at a redemption premium of 150%. After the expiration of 180 days after issuance, the Company has no right of prepayment
Debt instrument, interest rate																																				10.00%
Debt Instrument, maturity date																																				Mar. 25, 2020
Convertible promissory note, principal amount																																				$ 35,000																														38,000
Fees and expenses																																				$ 3,000
January 2019 Convertible Promissory Note [Member]
Debt discount																																																			$ 38,000
Amortization of debt discount to interest expense																																																																		1,415
Debt instrument remaining discount
Proceeds from convertible promissory notes																																																			$ 35,000
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.
Debt instrument, interest rate																																																			10.00%
Debt Instrument, maturity date																																																			Jan. 25, 2020
Fees and expenses																																																			$ 1,500
Convertible notes payable in default																																																			38,000															22,378
Issuance discount																																																			$ 1,500
December 2018 Convertible Promissory Note [Member]
Amortization of debt discount to interest expense																																																																				$ 2,351
Debt instrument remaining discount
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 3 [Member]
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.
Debt instrument, interest rate																																		10.00%
Debt Instrument, maturity date																																		Mar. 04, 2016
Convertible promissory note, principal amount																																		$ 1,000,000
Debt Instrument, conversion price | $ / shares																																		$ 0.03
Frequency of periodic payments																																		Monthly
Number of installments | integer																																		60
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 4 [Member]
Debt discount																																	$ 27,000
Proceeds from convertible promissory notes																																	27,000
Convertible promissory note, principal amount																																	$ 1,000,000
Notes payable																																																																		$ 1,445
Debt conversion converted instrument, shares issued | shares																																																																		496,804		8,772
Debt conversion converted amount, principal																																																																		$ 4,000		$ 2,330
Debt conversion converted amount, accrued interest																																																																		$ 1,589		$ 630
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 5 [Member]
Debt discount																																																																$ 33,000
Proceeds from convertible promissory notes																																																																$ 33,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 6 [Member]
Debt discount																																$ 90,000
Proceeds from convertible promissory notes																																$ 90,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 7 [Member]
Debt discount																																																															$ 60,000
Proceeds from convertible promissory notes																																																															$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 8 [Member]
Debt discount																																																														$ 50,000
Proceeds from convertible promissory notes																																																														$ 50,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 9 [Member]
Debt discount																															$ 87,000
Proceeds from convertible promissory notes																															$ 87,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 10 [Member]
Debt discount																														$ 60,000
Proceeds from convertible promissory notes																														$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 11 [Member]
Debt discount																													$ 55,000
Proceeds from convertible promissory notes																													$ 55,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 12 [Member]
Debt discount																																																													$ 55,000
Proceeds from convertible promissory notes																																																													$ 55,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 13 [Member]
Debt discount																												$ 55,000
Proceeds from convertible promissory notes																												$ 55,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 14 [Member]
Debt discount																											$ 60,000
Proceeds from convertible promissory notes																											$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 15 [Member]
Debt discount																										$ 60,000
Proceeds from convertible promissory notes																										$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 16 [Member]
Debt discount																																																												$ 60,000
Proceeds from convertible promissory notes																																																												$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 17 [Member]
Debt discount																									$ 60,000
Proceeds from convertible promissory notes																									$ 60,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 18 [Member]
Debt discount																								$ 95,000
Proceeds from convertible promissory notes																								$ 95,000
March 2016 Convertible Promissory Note [Member] | Convertible Notes Payable 19 [Member]
Debt discount																							$ 60,000
Proceeds from convertible promissory notes																							$ 60,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 20 [Member]
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.
Debt instrument, interest rate																						10.00%
Debt Instrument, maturity date																						Jun. 02, 2017
Convertible promissory note, principal amount																						$ 500,000
Debt Instrument, conversion price | $ / shares																						$ 0.03
Number of installments | integer																						60
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 21 [Member]
Debt discount																						$ 60,000
Proceeds from convertible promissory notes																						$ 60,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 22 [Member]
Debt discount																					$ 80,000
Proceeds from convertible promissory notes																					80,000
Amortization of debt discount																					$ 80,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 23 [Member]
Debt discount																				$ 80,000
Proceeds from convertible promissory notes																				80,000
Amortization of debt discount																				$ 80,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 24 [Member]
Debt discount																			$ 85,000
Proceeds from convertible promissory notes																			85,000
Amortization of debt discount																			$ 85,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 25 [Member]
Debt discount																		$ 80,000
Proceeds from convertible promissory notes																		80,000
Amortization of debt discount																		$ 80,000
June 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 26 [Member]
Debt discount																	$ 75,000
Proceeds from convertible promissory notes																	75,000
Amortization of debt discount																	$ 75,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 27 [Member]
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.
Debt instrument, interest rate																10.00%
Convertible promissory note, principal amount																$ 500,000
Debt Instrument, conversion price | $ / shares																$ 0.03
Number of installments | integer																60
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 28 [Member]
Debt discount																$ 60,000
Proceeds from convertible promissory notes																60,000
Amortization of debt discount																$ 60,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 29 [Member]
Debt discount															$ 70,000
Amortization of debt discount to interest expense															70,000
Proceeds from convertible promissory notes															$ 70,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 30 [Member]
Debt discount														$ 60,000
Amortization of debt discount to interest expense														60,000
Proceeds from convertible promissory notes														$ 60,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 31 [Member]
Debt discount													$ 55,000
Amortization of debt discount to interest expense													55,000
Proceeds from convertible promissory notes													$ 55,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 32 [Member]
Debt discount												$ 6,500
Amortization of debt discount to interest expense												6,500
Proceeds from convertible promissory notes												$ 6,500
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 33 [Member]
Debt discount											$ 77,000
Amortization of debt discount to interest expense											77,000
Proceeds from convertible promissory notes											$ 77,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 34 [Member]
Debt discount										$ 60,000
Amortization of debt discount to interest expense										60,000
Proceeds from convertible promissory notes										$ 60,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 35 [Member]
Debt discount									$ 52,000
Amortization of debt discount to interest expense									52,000
Proceeds from convertible promissory notes									$ 52,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 36 [Member]
Debt discount								$ 35,000
Amortization of debt discount to interest expense								35,000
Proceeds from convertible promissory notes								$ 35,000
December 2017 Convertible Promissory Note [Member] | Convertible Notes Payable 37 [Member]
Debt discount																																																											$ 24,500
Amortization of debt discount to interest expense																																																											24,500
Proceeds from convertible promissory notes																																																											$ 24,500

XML

DERIVATIVE LIABILITIES (Details)	3 Months Ended
	Mar. 31, 2020 $ / shares
Conversion to stock	Monthly
Stock price on the valuation date	$ 0.0080
Years to maturity	15 years
Minimum [Member]
Conversion price	$ 0.0431
Risk free interest rates	0.18%
Expected volatility	111.00%
Maximum [Member]
Conversion price	$ 0.0030
Risk free interest rates	2.74%
Expected volatility	373.00%

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Consolidated Statements of Operations (Unaudited)
Revenues
Operating expenses:
General and administrative	93,294	102,020
Depreciation and amortization	54	76
Total operating expenses	93,348	102,096
Loss from operations	(93,348)	(102,096)
Other income (expense):
Interest expense	(192,164)	(221,850)
Gain (loss) on change in derivative liabilities	(89,963)	3,225,346
Total other income (expense)	(282,127)	3,003,496
Income (loss) from continuing operations before income taxes	(375,475)	2,901,400
Provision for income taxes
Income (loss) from continuing operations, net of income taxes	(375,475)	2,901,400
Loss from discontinued operations, net of income taxes		(118,549)
Net income (loss)	$ (375,475)	$ 2,782,851
Weighted average number of shares outstanding:
Basic	5,115,166	183,747
Diluted	5,115,116	5,960,381
Net income (loss) from continuing operations per common share:
Basic	$ (0.07)	$ 15.79
Diluted	(0.07)	0.49
Net income (loss) from discontinued operations per common share:
Basic		(0.65)
Diluted		(0.65)
Total net income (loss) per common share:
Basic	(0.07)	15.15
Diluted	$ (0.07)	$ 0.47

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2020

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 Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2020.  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.

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.

Derivative Liabilities

We have identified the conversion features of our convertible notes payable and Series B preferred stock and certain stock options and warrants as derivatives. Where the number of common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional options, 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 March 31, 2020 and December 31, 2019, we believe the amounts reported for cash, prepaid expenses, accounts payable, accrued expenses and other current liabilities, accrued interest - notes payable 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 March 31, 2020 and December 31, 2019:

	Total		Level 1		Level 2		Level 3
March 31, 2020:
Derivative liabilities	$	6,003,493	$	-	$	-	$	6,003,493
Total liabilities measured at fair value	$	6,003,493	$	-	$	-	$	6,003,493
December 31, 2019:
Derivative liabilities	$	6,160,895	$	-	$	-	$	6,160,895
Total liabilities measured at fair value	$	6,160,895	$	-	$	-	$	6,160,895

During the three months ended March 31, 2020, 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, 2019	$	3,606,194		$	2,535,359		$	19,342		$	6,160,895
Addition to liabilities for new debt/shares issued		15,766			-			-			15,766
Elimination of liabilities for debt conversions		(28,276	)		(234,855	)		-			(263,131	)
Change in fair value		(312,048	)		419,213			(17,202	)		89,963
Derivative liabilities at March 31, 2020	$	3,281,636		$	2,719,717		$	2,140		$	6,003,493

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, included in loss from discontinued operations, were 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 were 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.

Subsequent to the EllisLab Corp. Sale Agreement, which closed on September 30, 2019, the Company does not have any sources of revenues.

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 March 31,
	2020		2019
Basic weighted average number of shares		5,115,166		183,747
Dilutive effect of:
Stock options		-		471,380
Series B preferred stock		-		1,595,556
Convertible notes payable		-		3,709,698
Diluted weighted average number of shares		5,115,166		5,960,381

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 three months ended March 31, 2020 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 ended March 31, 2019 have been reclassified to conform to the presentation for the three months ended March 31, 2020.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Derivative liabilities	$ 6,003,493	$ 6,160,895
Total liabilities measured at fair value	6,003,493	6,160,895
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	6,003,493	6,160,895
Total liabilities measured at fair value	$ 6,003,493	$ 6,160,895

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DERIVATIVE LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2020

DERIVATIVE LIABILITIES

Schedule of derivative liabilities at fair value

Conversion to stock	Monthly
Stock price on the valuation date	$	0.0080
Conversion price	$	0.0431 - $0.0030
Risk free interest rates	0.18% - 2.74		%
Years to maturity		15.0
Expected volatility	111%–373		%

Schedule of Fair Value Inputs, Quantitative Information

	March 31, 2020		December 31, 2019
Convertible notes payable	$	3,281,636	$	3,606,194
Series B preferred stock		2,719,717		2,535,359
Warrants		2,140		19,342
Total	$	6,003,493	$	6,160,895