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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 1 – Nature of the Business</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">BoxScore Brands, Inc. (formerly U-Vend
Inc.) (the “Company”) develops, markets and distributes various self-serve electronic kiosks and mall/airport co-branded
islands throughout North America. The Company seeks to place its kiosks in high-traffic host locations such as big box stores,
restaurants, malls, airports, casinos, universities, and colleges. Currently, the Company leases, owns and operates their kiosks
and intends to also provide the kiosks, through a distributor relationship, to the entrepreneur wanting to own their own business.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 26, 2018 the Company filed
a Certificate of Amendment of the Certificate of Incorporation. The Certificate of Amendment changed the Company’s name to
BoxScore Brands, Inc. from U-Vend Inc. to better reflect the nature of the Company’s current business operations, which has
expanded to include relationships with major sports organizations dispensing ice cream products through vending machines.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s vending kiosks incorporate
advanced wireless technology, creative concepts, and ease of management. They have been designed to be tech-savvy and can be managed
online 24 hours day/7 days a week, accepting traditional cash input as well as credit and debit cards. Host locations and suppliers
have been drawn to this distribution concept of product vending based on the advantages of reduced labor and lower product theft
as compared to non-kiosk merchandising platforms. The Company takes a solutions development approach for the marketing of products
through a variety of kiosk offerings. The Company’s approach to the market can include the addition of a digital LCD monitor
to most makes and models in a kiosk program. This would allow the Company to offer digital advertising as a national and/or local
loop basis and a corresponding additional revenue stream for the Company.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>Note 9 – Capital Stock</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has authorized 600,000,000
shares of common stock.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">During the six months ended June 30,
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="margin: 0"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">During the six months ended June 30,
2018, the Company issued 3,186,667 shares of common stock for $278,000 upon exercise of warrants.</p>
<p style="margin: 0"></p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 2 – Summary of Significant Accounting Policies</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Basis of Presentation and Principles
of Consolidation</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The accompanying
unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S.
Securities and Exchange Commission (“SEC”). Accordingly, these consolidated financial statements do not include all
of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary to make the consolidated financial statements not misleading have
been included. The balance sheet at December 31, 2017, has been derived from the Company’s audited consolidated financial
statements as of that date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The unaudited
consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements
and the notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017,
that was filed with the SEC on September 4, 2018. The results of operations for the three and six months ended June 30, 2018, are
not necessarily indicative of the results to be expected for the full year or any further periods.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The significant
accounting policies followed by the Company for interim reporting are consistent with those included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The unaudited
consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany balances
and transactions have been eliminated in consolidation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial instruments include cash, accounts
receivable, accounts payable, accrued expenses, derivative warrant liabilities, promissory notes payable, capital lease obligation,
convertible notes payables, and senior convertible notes payable. Fair values were assumed to approximate carrying values for these
financial instruments, except for derivative warrant liabilities, convertible notes payable and senior convertible notes payable,
since they are short term in nature or they are payable on demand. The senior convertible notes and the convertible notes payable
are recorded at face value net of any unamortized discounts, based upon the number of underlying convertible shares. The estimated
fair value of the convertible notes is determined based on the trading price on June 30, 2018 since the underlying shares are trading
in an active observable market, the fair value measurement qualifies as a Level 1 input. The determination of the fair value of
the derivative warrant liabilities include unobservable inputs and is therefore categorized as a Level 3 measurement. Changes in
unobservable inputs may result in significantly higher or lower fair value measurement. The carrying value of the short-term instruments
approximates their fair values at March 31, 2018 and December 31, 2017 due to their short-term nature.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 Codification ASC 820 “Fair
Value Measurement” establishes 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:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 0.25in"><font style="font-size: 10pt">● </font></td>
<td><font style="font-size: 10pt">Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 10pt">●</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">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</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 10pt">●</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">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.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Income Taxes</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has approximately $8 million
in federal net operating loss carryforwards (“NOLs”) available to reduce future taxable income, which will expire at
various dates from 2029 through 2037. The Company also has approximately $8.9 million of gross state NOLs that will expire at various
dates from 2021 and 2037. As these NOL’s were generated prior to the enactment of H.R. 1 (“Tax Cuts and Jobs Act”
or “TCJA”) they are eligible to fully offset taxable income. While the company generated taxable income due to the
extinguishment of certain liabilities, it is not expected to reoccur. Therefore, due to the uncertainty as to the Company’s
ability to generate sufficient taxable income in the future and utilize the NOLs before they expire, the Company has maintained
a full valuation allowance against its deferred tax assets accordingly. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><u>Recent Accounting
Pronouncements</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 1, 2018, the Company adopted
FASB ASC 606, "Revenue from Contracts with Customers" and all related amendments for all contracts using the modified
retrospective method.  There was no impact upon the adoption of ASC 606. The Company has determined that the adoption of this
standard did not require a cumulative effect adjustment. The comparative information has not been restated and continues to be
reported under the accounting standards in effect for those periods.  The Company has 139 and 144 electronic kiosks installed
in the southern California and Las Vegas areas from which it generated revenue during the six month periods ended June 30, 2018
and 2017, respectively. Revenue is recognized at the time each vending transaction occurs, the payment method is approved,
and the product is disbursed from the machine. Wholesale revenues, including revenue earned under contracts with major sports organizations,
are recognized at the time the products are delivered to the customer based on the agreement with the customer.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In August 2016,
the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments”, which clarifies the treatment
of several types of cash receipts and payments for which there was diversity in practice. This update is effective for annual periods
beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, including adoption
in an interim period. The Company has evaluated the impact of the adoption of this standard had on the consolidated financial statements
and related disclosures and determined the effective was not material.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In February 2016,
the FASB issued ASU 2016-02, “Leases”, which requires that lease arrangements longer than 12 months result in an entity
recognizing an asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018,
and early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial statements
and does not anticipate a material impact to its financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">In July 2017,
the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives
and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite
Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling
Interests with a Scope Exception, (ASU 2017-11).” Part I of this update addresses the complexity of accounting for certain
financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded
features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting
guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments)
with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update
addresses the difficulty of navigating <i>Topic 480, Distinguishing Liabilities from Equity</i>, because of the existence of extensive
pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of
accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily
redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective
for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is still evaluating the
impact this ASU will have on the consolidated financial statements and related disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Basis of Presentation and Principles
of Consolidation</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The accompanying
unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S.
Securities and Exchange Commission (“SEC”). Accordingly, these consolidated financial statements do not include all
of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary to make the consolidated financial statements not misleading have
been included. The balance sheet at December 31, 2017, has been derived from the Company’s audited consolidated financial
statements as of that date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The unaudited
consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements
and the notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017,
that was filed with the SEC on September 4, 2018. The results of operations for the three and six months ended June 30, 2018, are
not necessarily indicative of the results to be expected for the full year or any further periods.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The significant
accounting policies followed by the Company for interim reporting are consistent with those included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The unaudited
consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany balances
and transactions have been eliminated in consolidation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial instruments include cash, accounts
receivable, accounts payable, accrued expenses, derivative warrant liabilities, promissory notes payable, capital lease obligation,
convertible notes payables, and senior convertible notes payable. Fair values were assumed to approximate carrying values for these
financial instruments, except for derivative warrant liabilities, convertible notes payable and senior convertible notes payable,
since they are short term in nature or they are payable on demand. The senior convertible notes and the convertible notes payable
are recorded at face value net of any unamortized discounts, based upon the number of underlying convertible shares. The estimated
fair value of the convertible notes is determined based on the trading price on June 30, 2018 since the underlying shares are trading
in an active observable market, the fair value measurement qualifies as a Level 1 input. The determination of the fair value of
the derivative warrant liabilities include unobservable inputs and is therefore categorized as a Level 3 measurement. Changes in
unobservable inputs may result in significantly higher or lower fair value measurement. The carrying value of the short-term instruments
approximates their fair values at March 31, 2018 and December 31, 2017 due to their short-term nature.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 Codification ASC 820 “Fair
Value Measurement” establishes 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:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 0.25in"><font style="font-size: 10pt">● </font></td>
<td><font style="font-size: 10pt">Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 10pt">●</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">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</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 10pt">●</font></td>
<td style="text-align: justify"><font style="font-size: 10pt">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.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><font style="font: 10pt Times New Roman, Times, Serif"><u>Recent
Accounting Pronouncements</u></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
January 1, 2018, the Company adopted FASB ASC 606, "Revenue from Contracts with Customers" and all related amendments
for all contracts using the modified retrospective method.  There was no impact upon the adoption of ASC 606. The Company
has determined that the adoption of this standard did not require a cumulative effect adjustment. The comparative information
has not been restated and continues to be reported under the accounting standards in effect for those periods.  The Company
has 139 and 144 electronic kiosks installed in the southern California and Las Vegas areas from which it generated revenue during
the six month periods ended June 30, 2018 and 2017, respectively. Revenue is recognized at the time each vending transaction
occurs, the payment method is approved, and the product is disbursed from the machine. Wholesale revenues, including revenue earned
under contracts with major sports organizations, are recognized at the time the products are delivered to the customer based on
the agreement with the customer.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><font style="font: 10pt Times New Roman, Times, Serif">In
August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments”, which clarifies
the treatment of several types of cash receipts and payments for which there was diversity in practice. This update is effective
for annual periods beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted,
including adoption in an interim period. The Company has evaluated the impact of the adoption of this standard had on the consolidated
financial statements and related disclosures and determined the effective was not material.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><font style="font: 10pt Times New Roman, Times, Serif">In
February 2016, the FASB issued ASU 2016-02, “Leases”, which requires that lease arrangements longer than 12 months
result in an entity recognizing an asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after
December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated
financial statements and does not anticipate a material impact to its financial statements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><font style="font: 10pt Times New Roman, Times, Serif">In
July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480)
and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement
of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily
Redeemable Noncontrolling Interests with a Scope Exception, (ASU 2017-11).” Part I of this update addresses the complexity
of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked
instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity
offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants
and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion
option. Part II of this update addresses the difficulty of navigating <i>Topic 480, Distinguishing Liabilities from Equity</i>,
because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the
result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic
entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an
accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15,
2018. The Company is still evaluating the impact this ASU will have on the consolidated financial statements and related disclosures.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Income Taxes</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has approximately $8 million
in federal net operating loss carryforwards (“NOLs”) available to reduce future taxable income, which will expire at
various dates from 2029 through 2037. The Company also has approximately $8.9 million of gross state NOLs that will expire at various
dates from 2021 and 2037. As these NOL’s were generated prior to the enactment of H.R. 1 (“Tax Cuts and Jobs Act”
or “TCJA”) they are eligible to fully offset taxable income. While the company generated taxable income due to the
extinguishment of certain liabilities, it is not expected to reoccur. Therefore, due to the uncertainty as to the Company’s
ability to generate sufficient taxable income in the future and utilize the NOLs before they expire, the Company has maintained
a full valuation allowance against its deferred tax assets accordingly. </p>
8000
8900
The Company has approximately $8 million
in federal net operating loss carryforwards (“NOLs”) available to reduce future taxable income, which will expire at
various dates from 2029 through 2037. The Company also has approximately $8.9 million of gross state NOLs that will expire at various
dates from 2021 and 2037.
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Note 3 –
Going Concern</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial
statements have been prepared on a going concern basis. The Company reported net income of $1,965,768 for the three months ended
June 30, 2018 and $1,052,664 for the six months ended June 30, 2018 due to a one-time gain on the disposition of a liability, however
experienced operating losses for both the three and six months ended June 30, 2018, and has incurred accumulated losses totaling
$10,565,547 through June 30, 2018. In addition, the Company has incurred negative cash flows from operating activities since its
inception. The Company has relied on the proceeds from loans and private sales of its stock from its stockholders, in addition
to its revenues, to finance its operations. These factors, among others, indicate that the Company may be unable to continue as
a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these
uncertainties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Until the Company can generate significant
cash from operations, its ability to continue as a going concern is dependent upon obtaining additional financing. The Company
intends to raise additional financing to fund its operations for the next 12 months and allow the Company to continue the development
of its business plans and satisfy its obligations on a timely basis. Should additional financing not be available, the Company
will have to negotiate with its lenders to extend the repayment dates of its indebtedness. There can be no assurance that the Company
will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 4 – Property and
Equipment</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property and equipment consist of the following as of June 30,
2018 and December 31, 2017:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; font-size: 10pt; text-align: left">Electronic kiosks and vending machines</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">1,355,170</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">1,091,345</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Delivery vans</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">21,700</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">21,700</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(615,350</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(518,809</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">761,520</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">594,236</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depreciation expense amounted to $96,541
and $84,196, respectively for the six months ended June 30, 2018 and 2017.</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; font-size: 10pt; text-align: left">Electronic kiosks and vending machines</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">1,355,170</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">1,091,345</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Delivery vans</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">21,700</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">21,700</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(615,350</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(518,809</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">761,520</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">594,236</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 5 – Intangible Assets</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Intangible assets consist of the following as of June 30, 2018
and December 31, 2017:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; font-size: 10pt; text-align: left">Operating agreement</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">434,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">434,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">App development</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">22,888</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: accumulated amortization</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(390,599</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(347,199</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">66,289</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">86,801</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amortization expense amounted to $43,400
for each of the six months ended June 30, 2018 and 2017.</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; font-size: 10pt; text-align: left">Operating agreement</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">434,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">434,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">App development</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">22,888</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: accumulated amortization</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(390,599</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(347,199</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">66,289</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">86,801</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left"> </td></tr>
</table>
55000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 7 – Related Party Debt</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Graber, the Company’s Chief Executive
Officer, is affiliated with Cobrador Multi-Strategy Partners LP (Cobrador), and Cobrador has provided significant financing to
the Company. As of June 30, 2018, the Company had $1,517,591 in aggregate face amount due pursuant to Senior Convertible Notes,
Convertible Notes and Promissory Note, net of unamortized discount of $4,186 with $1,513,405 carrying value. During the six months
ended June 30, 2018 and 2017, the Company incurred approximately $67,000 of interest expense for the borrowing from Cobrador.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 10 – Stock Options and
Warrants</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><u>Warrants</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">At June 30, 2018 the Company had the following warrant securities
outstanding:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Warrants</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Exercise Price</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Expiration</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 44%; font-size: 10pt; text-align: left">2013 Series A warrants-Senior Convertible Notes</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 9%; font-size: 10pt; text-align: right">3,000,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">0.05</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 31%; font-size: 10pt; text-align: center">December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2013 Series B warrants-Senior Convertible Notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.06</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2014 Series A warrants -Senior Convertible Notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2014 Series B warrants -Senior Convertible Notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.06</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">January - December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2014 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">656,364</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">August - December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2014 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,072,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.06</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">June - December 2018</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2014 Warrants-  2014 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">208,334</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">August 2019</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2014 Warrants - 2014 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">35,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">October - November 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2015 Warrants - 2014 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">116,668</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">January - March 2020</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2015 Warrants - convertible financing obligation</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">57,600</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.26</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">October 2018</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2015 Warrants - 2015 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">735,002</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">April - November 2020</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2015 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">407,067</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center"> April - November 2020</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2015 Warrants issued in exchange for equipment</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">318,182</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">January 2020</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2016 Warrants - 2016 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,239,990</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">June 2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2016 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">850,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">June 2021</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2016 Warrants - lease extension</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">150,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">August 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2016 Warrants - Convertible notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">338,236</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">August - September 2021</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2016 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">200,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.07</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">October 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2016 Warrants - lease extension</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">200,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">October 2021</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2016 Warrants issued with Convertible Notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">5,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.07</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">November -December 2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2017 Warrants – 2017 financing</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">15,109,354</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.07</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">December 2022</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">2018 Warrants – 2018 financing</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="font-size: 10pt; text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="font-size: 10pt; text-align: right; border-bottom: Black 1.5pt solid">6,041,905</td><td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">$</td><td style="font-size: 10pt; text-align: right; padding-bottom: 1.5pt">0.07</td><td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="font-size: 10pt; text-align: center; padding-bottom: 1.5pt">January - March 2023</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="font-size: 10pt; font-weight: bold; text-align: left; border-bottom: Black 4pt double"> </td><td style="font-size: 10pt; font-weight: bold; text-align: right; border-bottom: Black 4pt double">54,735,702</td><td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 4pt"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="font-size: 10pt; text-align: left; padding-bottom: 4pt"> </td><td style="font-size: 10pt; text-align: right; padding-bottom: 4pt"> </td><td style="font-size: 10pt; text-align: left; padding-bottom: 4pt"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="font-size: 10pt; padding-bottom: 4pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A summary of all warrants activity for the six months ended
June 30, 2018 is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Warrants</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average Exercise<br />
Price</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average Remaining Contractual Term</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; font-size: 10pt; padding-bottom: 4pt">Balance outstanding at December 31, 2017</td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">50,299,469</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.07</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.71</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-left: 0.125in">Granted</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">7,800,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.08</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">4.73</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-left: 0.125in">Exercised</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">(3,186,667</td><td style="font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.09</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">4.73</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-left: 0.125in">Forfeited</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 1.5pt; padding-left: 0.125in">Expired</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(177,100</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">2.23</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 4pt">Balance outstanding at June 30, 2018</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">54,735,702</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.07</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.74</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 4pt">Exercisable at June 30, 2018</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">54,735,702</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.07</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.74</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table provides a summary
of changes in the warrant liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level
3) for the six months ended June 30, 2018 and 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; font-size: 10pt">Balance at beginning of period</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">121,860</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">184,680</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Fair value of warrants issued and recorded as liabilities</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">27,699</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">59,043</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Gain on fair value adjustment</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(121,863</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 1.5pt">Balance at end of period</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">149,559</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">121,860</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value of warrants outstanding
at June 30, 2018 and December 31, 2017 has been determined based on the consideration of the enterprise value of the Company, the
limited market of the shares issuable under the agreement and modeling of the Monte Carlo simulation using multiple volatility
assumptions. Warrants issued in and prior to 2012 are significantly out of the money and diluted therefore, management has deemed
the fair value of these to be minimal.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><u>Equity Incentive Plan</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 22, 2011, the Board of Directors
of the Company approved the Company’s 2011 Equity Incentive Plan (the “Plan”) and on July 26, 2011, stockholders
holding a majority of shares of the Company approved, by written consent, the Plan. The total number of shares of common stock
available for issuance under the Plan is 5,000,000 shares. Awards may be granted to employees, officers, directors, consultants,
agents, advisors and independent contractors of the Company and its related companies. Such options may be designated at the time
of grant as either incentive stock options or nonqualified stock options. Stock-based compensation includes expense charges related
to all stock-based awards. Such awards include options, warrants and stock grants. Generally, the Company issues stock options
that vest over three years and expire in 5 to 10 years. On November 16, 2017, the Board of Directors approved an increase of 10,000,000
shares to be made available for issuance under the Plan.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A summary of all stock option activity for the six months ended
June 30, 2018 is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Options</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average Exercise Price</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average Remaining Contractual Term</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; font-size: 10pt; padding-bottom: 4pt">Balance outstanding at December 31, 2017</td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">3,155,100</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.25</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.5</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-left: 0.125in">Granted</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-left: 0.125in">Exercised</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Cancelled or expired</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 4pt">Balance outstanding at June 30, 2018</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">3,155,100</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.25</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.0</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 4pt">Exercisable at June 30, 2018</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">3,149,267</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.25</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.0</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Stock-based compensation related to vested
options totaled $128 and $67,786 for the six months ended June 30, 2018 and 2017, respectively. At June 30, 2018, there was $192
of unrecognized compensation cost related to unvested options. This cost is expected to be recognized over a weighted average period
of approximately one year.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2015, the Company granted 500,000 restricted
shares with a three-year vesting period to an officer. During the second quarter of 2017, upon the departure of the officer from
the Company, the Board of Directors accelerated his vesting such that all shares were vested on his departure date. During the
six months ended June 30, 2018 and 2017, $18,334 and $12,222, respectively, was charged to operations as stock-based compensation
costs for the restricted shares granted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Warrants</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Exercise Price</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Expiration</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 44%; font-size: 10pt; text-align: left">2013 Series A warrants-Senior Convertible Notes</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 9%; font-size: 10pt; text-align: right">3,000,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">0.05</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 31%; font-size: 10pt; text-align: center">December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2013 Series B warrants-Senior Convertible Notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.06</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2014 Series A warrants -Senior Convertible Notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2014 Series B warrants -Senior Convertible Notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.06</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">January - December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2014 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">656,364</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">August - December 2019</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2014 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,072,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.06</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">June - December 2018</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2014 Warrants-  2014 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">208,334</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">August 2019</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2014 Warrants - 2014 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">35,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">October - November 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2015 Warrants - 2014 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">116,668</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">January - March 2020</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2015 Warrants - convertible financing obligation</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">57,600</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.26</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">October 2018</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2015 Warrants - 2015 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">735,002</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">April - November 2020</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2015 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">407,067</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center"> April - November 2020</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2015 Warrants issued in exchange for equipment</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">318,182</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.22</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">January 2020</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2016 Warrants - 2016 SPA convertible debt</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,239,990</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">June 2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2016 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">850,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">June 2021</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2016 Warrants - lease extension</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">150,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">August 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2016 Warrants - Convertible notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">338,236</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">August - September 2021</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2016 Warrants for services</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">200,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.07</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">October 2019</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2016 Warrants - lease extension</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">200,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.05</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">October 2021</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2016 Warrants issued with Convertible Notes</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">5,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.07</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">November -December 2021</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2017 Warrants – 2017 financing</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">15,109,354</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.07</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: center">December 2022</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">2018 Warrants – 2018 financing</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="font-size: 10pt; text-align: left; border-bottom: Black 1.5pt solid"> </td><td style="font-size: 10pt; text-align: right; border-bottom: Black 1.5pt solid">6,041,905</td><td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">$</td><td style="font-size: 10pt; text-align: right; padding-bottom: 1.5pt">0.07</td><td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="font-size: 10pt; text-align: center; padding-bottom: 1.5pt">January - March 2023</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt"> </td>
<td style="font-size: 10pt; font-weight: bold; text-align: left; border-bottom: Black 4pt double"> </td><td style="font-size: 10pt; font-weight: bold; text-align: right; border-bottom: Black 4pt double">54,735,702</td><td style="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 4pt"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="font-size: 10pt; text-align: left; padding-bottom: 4pt"> </td><td style="font-size: 10pt; text-align: right; padding-bottom: 4pt"> </td><td style="font-size: 10pt; text-align: left; padding-bottom: 4pt"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="font-size: 10pt; padding-bottom: 4pt"></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Warrants</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average Exercise<br />
Price</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average Remaining Contractual Term</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; font-size: 10pt; padding-bottom: 4pt">Balance outstanding at December 31, 2017</td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">50,299,469</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.07</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.71</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-left: 0.125in">Granted</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">7,800,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.08</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">4.73</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-left: 0.125in">Exercised</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">(3,186,667</td><td style="font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.09</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">4.73</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-left: 0.125in">Forfeited</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 1.5pt; padding-left: 0.125in">Expired</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(177,100</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">2.23</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 4pt">Balance outstanding at June 30, 2018</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">54,735,702</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.07</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.74</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 4pt">Exercisable at June 30, 2018</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">54,735,702</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.07</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.74</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<br />
2018</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; font-size: 10pt">Balance at beginning of period</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">121,860</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">184,680</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Fair value of warrants issued and recorded as liabilities</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">27,699</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">59,043</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Gain on fair value adjustment</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(121,863</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 1.5pt">Balance at end of period</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">149,559</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">121,860</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Options</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average Exercise Price</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average Remaining Contractual Term</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; font-size: 10pt; padding-bottom: 4pt">Balance outstanding at December 31, 2017</td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">3,155,100</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.25</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="width: 1%; font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.5</td><td style="width: 1%; padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-left: 0.125in">Granted</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-left: 0.125in">Exercised</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Cancelled or expired</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 4pt">Balance outstanding at June 30, 2018</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">3,155,100</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.25</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.0</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 4pt">Exercisable at June 30, 2018</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">3,149,267</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">0.25</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">2.0</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr></table>
54677226
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 12 – Subsequent Events</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subsequent to June 30, 2018, the Company
entered into a revenue advance agreement whereby it agreed to repay $187,500 and was loaned $150,000 less a $3,000 loan fee for
net proceeds of $147,000. The facility charges 13% interest and self-liquidates through the collection of accounts receivable.</p>
187500
3000
147000
false
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 8 – Capital Lease Obligations</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company acquired capital assets under
capital lease obligations. Pursuant to the agreement with the lessor, the Company makes quarterly lease payments and will make
a guaranteed residual payment at the end of the lease as summarized below. At the end of the lease, the Company will own the equipment.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2016, the Company and the lessor
agreed to extend the term of the lease until December 31, 2018. As a consideration of the extension, the Company issued warrants
to acquire 150,000 shares of common stock. The warrants have an exercise price of $0.30 per share, a term of three years, and were
recorded as a debt discount and warrant liability due to the down round provision and as such are marked to market each reporting
period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following schedule provides minimum
future rental payments required as of June 30, 2018, under the current portion of capital leases.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; font-size: 10pt; text-align: left">2018</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">83,398</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2019</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">83,043</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2020</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">83,043</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2021</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">37,609</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2022</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">20,160</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">2023</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">7,165</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Total minimum lease payments</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">314,418</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">Guaranteed residual value</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">120,668</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">435,086</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: Amount represented interest</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(74,865</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Present value of minimum lease payments and guaranteed residual value</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">360,221</td><td style="font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Equipment held under capital leases at
June 30, 2018 had a cost of $694,400 and accumulated depreciation of $306,000. Equipment held under capital leases at December
31, 2017 had a cost of $465,500 and accumulated depreciation of $267,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; font-size: 10pt; text-align: left">2018</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">83,398</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2019</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">83,043</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2020</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">83,043</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2021</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">37,609</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2022</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">20,160</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">2023</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">7,165</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Total minimum lease payments</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">314,418</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 1.5pt; text-align: left">Guaranteed residual value</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">120,668</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">435,086</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: Amount represented interest</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(74,865</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Present value of minimum lease payments and guaranteed residual value</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">360,221</td><td style="font-size: 10pt; text-align: left"> </td></tr></table>
-25358
37252
122847
96541
84196
43400
43400
47861
47416
-1140
23984
95049
15525
236717
48077
10073
9137
88657
611385
-153489
-121350
768215
163304
186207
-588859
-177526
34932
38478
23984
22888
-33836
-38478
278000
20000
196778
37300
415000
220000
16907
50000
156210
30266
716661
197034
93966
-18970
87667
61914
42944
181633
41000
228893
23582
18602
83398
83398
83398
37609
20160
7165
314418
120668
435086
74865
360221
150000
465500
694400
267000
306000
0.30
P3Y
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom; background-color: rgb(204,238,255)"><td style="width: 88%; font-size: 10pt; text-align: left">2018</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 9%; font-size: 10pt; text-align: right">22,666</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">2019</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">8,204</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 4pt; text-align: left">Total</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">30,870</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr></table>
22666
8204
30870
2
The lease is for a term of three months ending August 2018 at which point the lease becomes month to month.
The lease for the California warehouse was extended for an additional term of one year until February 2019.
The lease for the warehouse in Las Vegas is for a term of 25 months commencing in February 2016.
On March 1, 2018, the Company renewed its lease on the property for a period of twelve months.
The vehicle leases expire in October 2017 and June 2021.
2830
1072
1272
1063
222000
48000
50000
137500
222000
50000
150000
275000
100000
115000
The Company and NHL agreed to terminate the NHL Agreement forgiving the Company CAD3,450,000 in outstanding obligations under the Sponsorship Agreement, in return the Company agreed to pay the NHL an amount equal to one percent (1%) of the Company’s net sales of certain products as defined under the agreement (the ‘Consideration’). The products include several types of frozen goods that bear the logo or other markings of sports or entertainment brands. This Consideration is to be paid to the NHL quarterly in arrears through the quarter ended June 30, 2026, or until the Company has paid USD1,600,000 in the aggregate from the date of the agreement.
1600000
2674419
845
2674419
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 11 – Commitments and Contingencies</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>National Hockey League Retail License
and Sponsorship Agreement</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 27, 2015 BoxScore announced
a multi-year, Corporate Marketing Letter Agreement (the “NHL Agreement”) with the National Hockey League. The NHL Agreement
includes the usage of NHL® team branded marks on the Company’s Frozen Pond Premium Ice Cream™ for the period commencing
March 1, 2015 through June 30, 2020 in retail distributions including mass merchants, specialty shops, convenience stores and in
the Company’s specialty kiosks in North America.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company entered into the NHL Agreement
with NHL Enterprises, L.P, NHL Enterprises Canada, L.P. and NHL Interactive Cyber Enterprises, LLC (collectively referred to as
the “NHL” and the “Licensors”) and includes a retail license agreement, a corporate sponsorship and a marketing
agreement. In connection with the Agreement, the Company shall pay to the NHL a royalty payment of five percent (5%) on net sales
as well as fees attributable to national advertising, promotion and corporate marketing and branding events. The Agreement also
provides for customary representations, warranties, and indemnification from the parties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has not shipped product to
date under the license.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the six months ended June 30, 2018,
the Company and NHL agreed to terminate the NHL Agreement forgiving the Company CAD3,450,000 in outstanding obligations under the
Sponsorship Agreement, in return the Company agreed to pay the NHL an amount equal to one percent (1%) of the Company’s net
sales of certain products as defined under the agreement (the ‘Consideration’). The products include several types
of frozen goods that bear the logo or other markings of sports or entertainment brands. This Consideration is to be paid to the
NHL quarterly in arrears through the quarter ended June 30, 2026, or until the Company has paid USD1,600,000 in the aggregate
from the date of the agreement. The $1,600,000 is a royalty payment due to the NHL based on future sales.  The Company recorded
$2,674,419 in gain on settlement of liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Major League Baseball Properties, Inc.
License Agreement</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March, 2016 the Company entered into
a license agreement beginning April 1, 2016 through December 31, 2019 with Major League Baseball Properties, Inc. (“MLB”
“Licensor”) for the non-exclusive right to certain proprietary intangible property of the Licensor to be used in connection
with the manufacturing, distribution, promotion and advertisement of the Company’s products sold within the U.S., the District
of Columbia and U.S. territories. Under the license agreement, the Company is scheduled to pay the following guaranteed payments;
$150,000 during 2016, $275,000 during 2017, $100,000 during 2018, and $115,000 during 2019. The Company is obligated to pay the
licensor a royalty based on the product sold or advertising sold. The royalty paid will offset all or a portion of the guaranteed
payments. The agreement is subject to customary default and termination clauses. The Company paid $222,000 and $48,000 during the
six months ended June 30, 2018 and 2017, respectively, and has accrued $50,000 at June 30, 2018, and $222,000 as of December 31,
2017, and charged to operations $50,000 and $137,500 of guaranteed payments related to the six months ended June 30, 2018 and 2017,
respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Operating Lease Obligations</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June 30, 2018, the Company has two
operating lease agreements for office and warehouse space, one in southern California and one in Las Vegas. During the six months
ended June 30, 2018, the lease for the California warehouse was extended for an additional term of one year until February 2019
with a base rent of $2,830 a month. The lease for the warehouse in Las Vegas is for a term of 25 months commencing in February
2016 and provides for a base rent of $1,072 with scheduled increases. On March 1, 2018, the Company renewed its lease on the property
for a period of twelve months for a base rent of $1,272. The Company also has two vehicle leases for use in product distribution
and sales efforts. The vehicle leases expire in October 2017 and June 2021 and require a monthly payment of $1,063. Rent expense
amounted to $26,158 and $23,752 during the six months ended June 30, 2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The aggregate rental commitments for the leases at June 30,
2018 is:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; font-size: 10pt; text-align: left">2018</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 9%; font-size: 10pt; text-align: right">22,666</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">2019</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">8,204</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 4pt; text-align: left">Total</td><td style="font-size: 10pt; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">30,870</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>  </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, the Company entered into a short term operating
lease during the three months ended June 30, 2018 in Southern California. The lease is for a term of three months ending August
2018 at which point the lease becomes month to month. The Company is currently paying $845 per month in base rent for this lease.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 6 – Debt</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Senior Convertible Notes</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2017,
a Senior Convertible Note in the aggregate principal amount of $310,000 and a maturity date of December 31, 2017 payable to Cobrador
Multi-Strategy Partners, LP (“Cobrador 1”), a related party, was extended until December 31, 2018. The Company also
extended the expiration dates of Series A Warrants issued in connection with Cobrador 1 by one year. The fair value of the Series
A Warrants did not materially change due to the extension. Cobrador, an entity controlled by the Company’s CEO, is a related
party.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 30, 2016, the Company issued an
additional Senior Convertible Note in the face amount of $108,804 to Cobrador (“Cobrador 2”) in settlement of previously
accrued interest, additional interest, fees and penalties. The additional interest, fees and penalties was $72,734 and this amount
was charged to operations as debt discount amortization during the year ended December 31, 2016. The Senior Convertible Note was
extended during the year ended December 31, 2017 and is due on December 31, 2018. It is convertible into shares of common stock
at a conversion price $.05 per share and bears interest at 7% per annum. The Company determined that Cobrador 2 had a beneficial
conversion feature based on the difference between the conversion price and the market price on the date of issuance and allocated
$87,043 as debt discount representing the beneficial conversion feature which was fully amortized at December 31, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During December 2017, the Company issued
a Senior Convertible Note in the amount of $25,000 to Cobrador. The note bears interest at 7%, is due in December 2019, and is
convertible into common shares at a conversion price of $0.05 per share. In addition, in conjunction with this note, the Company
issued 500,000 warrants to purchase common shares at $0.05 with a contractual term of 5 years. The estimated value of the warrants
was determined to be $1,421 and was recorded as interest expense during 2017 and a warrant liability due to the down round provision
in the note agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At June 30, 2018 and December 31, 2017,
the Cobrador notes had a carrying value of $442,916 and $443,804, net of discount of $888 and $1,421, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Promissory Notes Payable</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During 2014, the Company issued an unsecured
promissory note to a former employee of U-Vend Canada. The original amount of this note was $10,512 has a term of 3 years and accrues
interest at 17% per annum. The total principal outstanding on this promissory note at June 30, 2018 and December 31, 2017 was $6,235
and $6,235, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the six months ended June 30, 2018
and 2017, the Company borrowed $79,278 and $12,300, respectively, pursuant to a series of promissory notes from the same lender.
All of the notes bear interest at a rate of 19% per annum, and are payable together with interest over a period of six (6) months
from the date of borrowing. The Company repaid $29,546 and $17,233 during the six months ended June 30, 2018 and 2017, respectively,
and the balance outstanding on these notes at June 30, 2018 and December 31, 2017, was $65,799 and $16,067, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2016,
the Company issued two unsecured promissory notes and borrowed an aggregate amount of $80,000. The promissory notes bear interest
at 10% per annum, with a provision for an increase in the interest rate upon an event of default as defined therein and were due
at various due dates in May and September 2017. The due dates of both notes were extended to December 31, 2018. As of June 30,
2018 and December 31, 2017, the balance outstanding on these notes was $80,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2017, the Company issued promissory
notes in the aggregate principal balance of $28,000 to Cobrador, a related party. The notes accrue interest at 7% and have a two-year
term. As of June 30, 2018 and December 31, 2017, the balance outstanding on these notes was $28,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 8, 2017, the Company issued
a convertible promissory note (the “Note”) in the principal amount of $50,000 with net proceeds of $47,000. The Note
bears interest at the rate of 12% per annum, has a nine-month maturity, and includes prepayment interest fees increasing based
on the prepayment date from 15-40% of the principal amount if the Note is repaid prior to 181 days following the issuance date.  There
is no right to prepay the Note after the 180th day of issuance. The Note becomes convertible 180 days following the issuance date
and the conversion price for the Note is equal to a 39% discount to the average of the two lowest closing bid prices of the Company’s
common stock during the 15-trading day period prior to conversion. Conversion of the Note is restricted in the event the number
of shares of common stock beneficially held by the note holder and its affiliates in the aggregate after such conversion exceeds
4.99% of the then outstanding shares of common stock. As of December 31, 2017, the note had a carrying value of approximately
$47,000. The Company repaid $64,164 including principal and interest on the Note in February 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 13, 2018, the Company issued a
promissory note in the principal amount of 115,000. This note bears interest at the rate of 7% per annum, due on June 30, 2018.
The Company repaid $60,000 during the six months ended June 30, 2018, and the balance outstanding on this note at June 30, 2018,
was $55,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October 2014, January 2015 and October
2015, the Company entered into three (3) separate 24-month equipment financing agreements (the “Agreements”) with Perkin
Industries, LLC (“Perkin”) for equipment in the aggregate amount of $387,750 with an annual interest rate of 15%. The
assets financed consisted of self-service electronic kiosks placed in service in the Company’s Southern California region.
The Company is obligated to make monthly interest only payments in accordance with the Agreements. The Agreements include a put/call
option at the end of year one and the end of year two. Neither of these options were exercised. During 2017 $100,000 was paid down
on the notes, and the carrying value as of June 30, 2018 and December 31, 2017 was $287,750.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Agreements Perkins received
a warrant to purchase an aggregate of 310,200 shares at an exercise price of $0.35 per share with a contractual term of three (3)
years. The warrant was recorded as a debt discount and a warrant liability in the aggregate amount of $3,708 due to the down round
provision, pursuant which the exercise price of the warrants was revised to $0.26 at December 31, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October 2016, the Company and Perkins
agreed to extend the termination date of two of the Agreements to October 17, 2017 and January 5, 2018. In consideration of this
extension, the Company issued an additional 200,000 warrants with an exercise price of $0.05 per share and a five-year contractual
term. The fair value of the warrants was not material and was charged to operations in the accompanying statement of operations
for the year ended December 31, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the six months ended June 30, 2018
the Agreements were purchased by a third party and the terms are unchanged.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>  </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><u>Convertible Notes Payable</u></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>2014 Stock Purchase Agreement</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2014 and 2015 the Company entered into
the 2014 Securities Purchase Agreement (the “2014 SPA”) pursuant to which it issued eight (8) convertible notes in
the aggregate face amount of $146,000 due at various dates between August 2015 and March 2016. The principal on these notes
is due at the holder’s option in cash or common shares at a conversion rate of $0.30 per share. In connection with these
borrowings the Company granted a total of 360,002 warrants with an exercise price of $0.35 per share and a 5 year contractual term.
The warrants issued have a down round provision and as a result are classified as a liability in the accompanying consolidated
balance sheets. Pursuant to the down round provision, the exercise price of the warrants was reduced $0.22 at December 31, 2016.
During 2017 the Company repaid one of the notes in the amount of $50,000. On May 1, 2018, the Company granted 1,000,000 warrants
with an exercise price of $0.15 per share and a 5 year contractual term, valued at $2,841, which was recorded as debt discount.
As of June 30, 2018 and December 31, 2017, outstanding balances of these notes were $166,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company and Cobrador held three of
the convertible notes in the aggregate face amount of $45,000, and agreed to extend the repayment date to November 17, 2020. The
Company and Cobrador extended the due date to December 31, 2018 on notes totaling $25,000, and the Company agreed to a revised
conversion price of $.05 per share and a revised exercise price of $0.07 per share. The change in the value of warrants was not
material and was charged to operations during the year ended December 31, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><u>2015 Stock Purchase Agreement</u>  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2015,
the Company issued eleven subordinated convertible notes bearing interest at 9.5% per annum with an aggregate principal balance
of $441,000 pursuant to the 2015 Stock Purchase Agreement (the “2015 SPA”).The notes were due in December 2017 and
are payable at the noteholder’s option in cash or common shares at a conversion rate of $0.30 per share The conversion rate
was later revised to $0.05 due to down round provisions contained in the 2015 SPA, and the due date was extended to November 17,
2020. In connection with these borrowings, the Company issued a warrant to purchase 735,002 shares of the Company’s common
stock at an exercise price of $0.40 per share and a 5 year contractual term. The exercise price was later revised to $0.22 per
share pursuant to the down round provisions in the 2015 SPA. The Company allocated $8,113 of proceeds received to debt discount
based on the computed fair value of the convertible notes and warrants issued. During the year ended December 31, 2016, the noteholder
converted one note in the face amount of $35,000 into 700,000 shares of common stock. As of June 30, 2018 and December 31, 2017,
the 2015 SPA had a balance of $406,000. The debt discount was fully amortized as of December 31, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>2016 Stock Purchase Agreement</u>  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 30, 2016, the Company entered into
the 2016 Stock Purchase Agreement (the “2016 SPA”) pursuant to which it issued five convertible notes in the aggregate
principal amount of $761,597. The 2016 SPA notes are due in November 2020 and bear interest at 9.5% per annum. The notes are convertible
into shares of common stock at a conversion price of $0.17 per share. With this note, the Company satisfied its obligations for:
previously issued promissory notes of $549,000, accrued interest of $38,615, lease principal installments of $47,466, previously
accrued registration rights penalties of $22,156, due to a former officer of $81,250, and additional interest, expenses, fine and
penalties of $23,110 through the issuance of 2016 SPAs. The Company charged additional interest, expenses, fines and penalties
$23,110 to operations as amortization of debt discount and deferred financing costs during the year ended December 31, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the 2016 SPA, the Company
granted a total of 2,239,990 warrants with an exercise price of $0.30 per share which was later revised to $0.05 per share due
to down round provisions, with a 5 year contractual life. The Company allocated $19,242 to debt discount based on the computed
fair value of the convertible notes and warrants issued and classified the debt discount is as a warrant liability due to the down
round provision in the warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of June 30, 2018 and December 31, 2017,
the 2016 SPA had a face value of $761,597 and a carrying value of $761,597 and $756,786, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Other 2016 Financings</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2016,
the Company issued four convertible notes (the “Cobrador 2016 Notes”) in the aggregate principal amount of $115,000.
The Cobrador 2016 Notes, to a related party, have a 2 year term, bear interest at 9.5% per annum, and are convertible into shares
of common stock at a conversion price of $0.17 per share. The conversion price was subsequently revised to $0.05 per the down round
provisions and the maturity date was extended to September 26, 2021. In connection with the Cobrador 2016 Notes, the Company granted
a total of 338,235 warrants with an exercise price of $0.30 per share which was subsequently revised to $0.05 per share due to
down round provisions with a 5 year contractual term. The Company allocated $1,994 to debt discount based on the computed fair
value of the convertible notes and warrants issued, and classified the debt discount as a warrant liability due to the down round
provision in the warrants. As of June 30, 2018 and December 31, 2017, the Cobrador 2016 Notes had a carrying value of $115,000
and $114,500, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the fourth quarter of 2016, the
Company issued three additional convertible notes in the aggregate principal amount of $250,000. The notes have a 2 year term,
bear interest at 9.5% per annum and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection
with these borrowings, the Company granted warrants to purchase 5,000,000 shares of common stock with an exercise price of $0.07
per share. The Company allocated $27,585 to debt discount based on the computed fair value of the convertible notes and warrants
issued, and the debt discount is classified as a warrant liability due to the down round provision in the warrants. As of June
30, 2018 the carrying value of the note was $241,944 and $238,046 as of December 31, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>2017 Financings</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2017,
the Company entered into nineteen separate convertible notes agreements (the “2017 Convertible Notes)” in the aggregate
principal amount of $924,282. The 2017 Convertible Notes each have a 2 year term, bear interest at 9.5%, and are convertible into
shares of common stock at a conversion price of $0.05 per share. In connection with the 2017 Convertible Notes, the Company issued
a total of 16,537,926 warrants with an exercise price of $0.07 per share with a 5 year term. The Company allocated $59,403 to a
debt discount based on the computed fair value of the convertible notes and warrants issued, and classified the debt discount as
a warrant liability due to the down round provision in the warrants. During the six months ended June 30, 2018, the Company amortized
$9,292 of debt discount resulting in unamortized debt discount of $35,321 and carrying value of $888,961 at June 30, 2018. The
carrying value of the notes at December 31, 2017 was $878,668.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>2018 Financings</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the six months ended June 30, 2018,
the Company entered into nine separate convertible notes agreements (the “2018 Convertible Notes)” in the aggregate
principal amount of $340,000. The 2018 Convertible Notes each have a 2 year term, bear interest at 9.5% if paid in cash, 15% if
paid in common stock, and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with
the 2018 Convertible Notes, the Company issued a total of 6,800,000 warrants with an exercise price of $0.07 per share with a 5
year term. The Company allocated $22,161 to a debt discount based on the computed fair value of the convertible notes and warrants
issued, and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the six
months ended June 30, 2018, the Company amortized $4,830 of debt discount resulting in an unamortized debt discount of $17,331
and carrying value of $322,669 at June 30, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><u>Other 2018 Financings</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 26, 2018, the Company entered
into a convertible note agreement in the amount of $78,750, with original discount of $3,750, bearing an annual interest rate of
8%. The note is convertible into common stock at a conversion price of $0.07 per share. During six months ended June 30, 2018,
the Company amortized $1,563 of debt discount resulting in unamortized debt discount of $3,125 and carrying value of $76,563 at
June 30, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Scheduled maturities of debt remaining as of March 31, 2018
for each respective fiscal year end are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; font-size: 10pt; text-align: left">2018</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">1,312,588</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2019</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,028,032</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2020</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,552,597</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">2021</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">115,000</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">4,008,217</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: unamortized debt discount</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(63,783</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 1.5pt; text-align: left"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: right">3,944,434</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: left"> </td></tr></table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom; background-color: rgb(204,238,255)"><td style="width: 88%; font-size: 10pt; text-align: left">2018</td><td style="width: 1%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">1,312,588</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">2019</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,028,032</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">2020</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,552,597</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">2021</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">115,000</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">4,008,217</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: unamortized debt discount</td><td style="font-size: 10pt; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(63,783</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 1.5pt; text-align: left"> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; font-weight: bold; text-align: right">3,944,434</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold; text-align: left"> </td></tr>
</table>