10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________.

Commission file number: 000-55053

Blow & Drive Interlock Corporation

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	46-3590850 (I.R.S. Employer Identification No.)
1427 S. Robertson Blvd. Los Angeles, CA (Address of principal executive offices)	90035 (Zip Code)

(877) 238-4492

Registrant’s telephone number, including area code

(Former address, if changed since last report)

(Former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [  ] No [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ].

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

	Large accelerated filer [  ]	Accelerated filer [  ]
	Non-accelerated filer [  ]	Smaller reporting company [X]
(Do not check if a smaller reporting company)
		Emerging growth company [  ]

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

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

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [  ] No [  ]

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of July 1, 2019, there were 31,350,683 shares of common stock, $0.0001 par value, issued and outstanding.

CAUTIONARY STATEMENT

All statements included or incorporated by reference in this Quarterly Report on Form 10-Q (this “Form 10-Q”), other than statements or characterizations of historical fact, are “forward-looking statements” within the meaning of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). Examples of forward-looking statements include, but are not limited to, statements concerning projected sales, costs, expenses and gross margins; our accounting estimates, assumptions and judgments; the prospective demand for our products; the projected growth in our industry; the competitive nature of and anticipated growth in our industry; and our prospective needs for, and the availability of, additional capital. These forward-looking statements are based on our current expectations, estimates, approximations and projections about our industry and business, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by such words as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions and variations or negatives of these words. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors, some of which are set forth in the “Risk Factors” section of our Report on Form 10-K for the year ended December 31, 2017, filed on June 7, 2019, and this Report, which could cause our financial results, including our net income or loss or growth in net income or loss to differ materially from prior results, which in turn could, among other things, cause the price of our common stock to fluctuate substantially. These forward-looking statements speak only as of the date of this report. We undertake no obligation to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law.

BLOW & DRIVE INTERLOCK CORPORATION

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
ITEM 1	Financial Statements	3
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	48
ITEM 4	Controls and Procedures	48
PART II – OTHER INFORMATION
ITEM 1	Legal Proceedings	50
ITEM 1A	Risk Factors	50
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	50
ITEM 3	Defaults Upon Senior Securities	51
ITEM 4	Mine Safety Disclosures	51
ITEM 5	Other Information	51
ITEM 6	Exhibits	52

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PART I – FINANCIAL INFORMATION

ITEM 1 Financial Statements

The consolidated balance sheets as of September 30, 2018 (unaudited) and December 31, 2017 (restated), the consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 (restated), the consolidated statement of stockholders equity (deficit) for the three months ended September 30, 2018, and the consolidated statements of cash flows for the nine months ending September 30, 2018 and 2017 (restated), follow. The unaudited interim condensed financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. All such adjustments are of a normal and recurring nature.

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BLOW & DRIVE INTERLOCK CORPORATION

CONSOLIDATED BALANCE SHEETS

	September 30, 2018			December 31, 2017
	(unaudited)
ASSETS
Current Assets
Cash	$	42,124		$	31,874
Accounts receivable, net of allowance for doubtful accounts of $0 and $0 at September 30, 2018 and December 31, 2017, respectively		5,355			28,916
Prepaid Expenses		2,648			2,655
Total current assets		50,127			63,445
Deposits		5,131			5,131
Total assets	$	55,258		$	68,576
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	$	-		$	39,695
Accrued expenses		20,547			15,685
Accrued royalty payable		254,711			179,993
Accrued interest		135,233			35,460
Income taxes payable		5,930			5,930
Deferred revenue		115,551			184,378
Derivative liability		18,287			12,302
Notes payable, net of debt discount of $7,548 and $18,729 at September 30, 2018 and December 31, 2017, respectively		69,134			60,006
Notes payable – related party		113,750			45,328
Convertible notes payable, net of debt discount of $5,124 and $0 at September 30, 2018 and December 31, 2017, respectively		2,376			6,972
Total current liabilities		735,519			585,749
Non-current Liabilities
Notes payable, net of debt discount of $8,812 and $14,473 at September 30, 2018 and December 31, 2017, respectively		16,182			21,274
Notes payable – related party		1,251,250			839,306
Convertible notes payable, net of debt discount of $7,684 and $2,011 at September 30, 2018 and December 31, 2017, respectively		12,316			3,517
Total non-current liabilities		1,279,748			864,097
Total Liabilities		2,015,267			1,449,846
Stockholders’ Deficit
Preferred stock, par value $0.001, 20,000,000 shares authorized, 1,000,000 and 1,000,000 shares issued or issuable and outstanding as of September 30, 2018 and December 31, 2017, respectively		1,000			1,000
Common stock, par value $0.0001, 100,000,000 shares authorized, 31,611,785 and 26,223,834 shares issued or issuable and outstanding as of September 30, 2018 and December 31, 2017, respectively		3,161			2,622
Additional paid-in capital		3,485,203			2,911,753
Accumulated deficit		(5,449,373	)		(4,296,645	)
Total stockholders’ deficit		(1,960,009	)		(1,381,270	)
Total liabilities and stockholders’ equity (deficit)	$	55,258		$	68,576

The accompanying notes are an integral part of these financial statements.

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BLOW & DRIVE INTERLOCK CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017 (restated)			2018			2017 (restated)
Monitoring revenues	$	221,418		$	394,139		$	664,649		$	674,197
Distributorship revenues		20,240			85,286			59,505			286,729
Total revenues		241,658			479,415			724,154			960,926
Monitoring cost of revenue		18,724			57,817			95,405			111,884
Distributorship cost of revenue		-			1,000			-			7,739
Total cost of revenue		18,724			58,817			95,405			119,623
Gross profit		222,934			420,598			628,749			841,303
Operating expenses
Payroll		240,499			272,900			706,648			457,288
Professional fees		26,175			16,603			114,230			93,505
General and administrative		170,504			269,039			639,598			579,172
Depreciation		-			90,512			-			234,654
Total operating expenses		437,178			649,054			1,460,476			1,364,619
Loss from operations		(214,244	)		(228,456	)		(831,727	)		(523,316	)
Other income (expense)
Interest expense, net		(119,028	)		(145,740	)		(329,586	)		(440,538	)
Change in fair value of derivative liability		5,093			(6,474	)		9,385			11,018
Gain (loss) on extinguishment of debt		-			-			-			(305,000	)
Total other income (expenses)		(113,935	)		(152,214	)		(320,201	)		(734,520	)
Loss before provision for income taxes		(328,179	)		(380,670	)		(1,151,928	)		(1,257,836	)
Provision for income taxes		-			-			800			1,600
Net loss	$	(328,179	)	$	(380,760	)	$	(1,152,728	)	$	(1,259,436	)
Basic and Diluted Loss Per Common Share	$	(0.01	)	$	(0.02	)	$	(0.04	)	$	(0.06	)
Basic and Diluted Weighted-Average Common Shares Outstanding		31,205,429			22,856,861			29,152,045			21,922,340

The accompanying notes are an integral part of these financial statements.

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BLOW & DRIVE INTERLOCK CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

	Preferred Stock - Series A				Common Stock					Additional Paid-In			Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares			Amount		Capital			Deficit			(Deficit)
Balance December 31, 2016 (restated)		-	$	-		19,575,605		$	1,958	$	1,594,721		$	(1,587,330	)	$	9,349
Shares issued for services						27,180			3		13,910			-			13,913
Warrants issued for services											278						278
Shares issued for cash		-		-		5,686,656			569		848,468			-			849,037
Shares issued related to debt		1,000,000		1,000		195,400			18		454,450						455,468
Shares issued related to anti-dilution		-		-		739,253			74		(74	)		-			-
Other		-		-		(260	)		-		-			-			-
Net loss		-		-		-			-		-			(2,709,315	)		(2,709,315	)
Balance December 31, 2017		1,000,000		1,000		26,223,834			2,622		2,911,753			(4,296,645	)		(1,381,270	)
Shares issued for services		-		-		476,000			48		110,153			-			110,201
Shares issued for cash		-		-		4,340,883			434		458,271			-			458,705
Shares issued related to anti-dilution		-		-		538,256			54		(54	)		-			-
Conversion of debt to common stock		-		-		32,812			3		5,080						5,083
Net loss		-		-		-			-		-			(1,152,728	)		(1,152,728	)
Balance September 30, 2018		1,000,000	$	1,000		31,611,785		$	3,161	$	3,485,203		$	(5,449,373	)	$	(1,960,009	)

The accompanying notes are an integral part of these financial statements.

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BLOW & DRIVE INTERLOCK CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended September 30,
	2018			2017 (restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,152,728	)	$	(1,259,436	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-			234,654
Loss on fixed assets disposals		-			12,989
Shares issued for services		110,200			14,188
Allowance for doubtful accounts		(26,541	)		5,412
Loss on extinguishments of debt		-			305,000
Debt converted to common shares		5,083			-
Amortization of debt discount		27,704			275,465
Change in fair value of derivative liability		(9,385	)		(11,019	)
Changes in operating assets and liabilities:
Accounts receivable		50,102			6,760
Prepaid expenses		6			792
Deposits		-			1,123
Accounts payable		(39,695	)		74,541
Accrued expenses		4,863			168,273
Accrued interest		99,773			30,968
Deferred revenue		(68,827	)		(64,274	)
Accrued royalties payable		74,718			25,136
Net cash used in operating activities		(924,727	)		(179,428	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		-			(817,026	)
Deposits on units		-			250,000
Net cash used in investing activities		-			(567,026	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuances of notes payable		21,600			-
Principal payments of notes payable		(34,405	)		(46,037	)
Proceeds from issuance of convertible notes payable		20,000			-
Principal payments of convertible notes payable		(5,000	)		-
Proceeds from issuances of related party notes payable		600,127			195,400
Principal payments of related party note payable		(126,050	)		(87,947	)
Proceeds from issuance of common stock		458,705			653,099
Net cash provided by financing activities		934,977			714,515
NET INCREASE (DECREASE) IN CASH		10,250			(31,939	)
CASH – beginning of period		31,874			116,309
CASH – end of period	$	42,124		$	84,570
ADDITIONAL CASH FLOW INFORMATION
Interest paid	$	91,634		$	134,105
Income taxes paid	$	-		$	-

The accompanying notes are an integral part of these financial statements.

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SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

	Nine Months Ended September 30,
	2018		2017
Common stock and warrants issued for services	$	110,200	$	14,188
Preferred stock issued for debt reduction and services	$	-	$	350,000

The accompanying notes are an integral part of these financial statements.

8

BLOW AND DRIVE INTERLOCK CORPORATION

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 1 - Organization and Nature of Business

Blow & Drive Interlock (“the Company”) was incorporated on July 2, 2013 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company markets and rents alcohol ignition interlock devices to DUI/DWI offenders as part of their mandatory court or motor vehicle department programs. The Company has approval for its device in the following states: California, Colorado, Kansas, New York, Tennessee, Arizona, Oregon, Kentucky, Oklahoma, Pennsylvania, and Texas.

In 2015, the Company formed BDI Manufacturing, Inc., an Arizona corporation which is a 100% wholly owned subsidiary of Blow & Drive Interlock Corporation. The Company markets, installs and monitors a breath alcohol ignition interlock device (BAIID) called the BDI-747/1, which is a mechanism that is installed on the steering column of an automobile and into which a driver exhales. The device in turn provides a blood-alcohol concentration analysis. If the driver’s blood-alcohol content is higher than a certain pre-programmed limit, the device prevents the ignition from engaging and the automobile from starting. These devices are often required for use by DUI or DWI (“driving under the influence” or “driving while intoxicated”) offenders as part of a mandatory court or motor vehicle department program.

The Company licenses the rights to third party distributors to promote the BDI-747/1 and provide services related to the device. The distributorships are for specific geographical areas (either entire states or certain counties within states). The Company currently has entered into six distributorship agreements. Under the distribution agreements the Company typically receives a onetime fee, and then is entitled to receive a per unit registration fee and a per unit monthly fee for each BDI-747/1 unit the distributor has in inventory or on the road beginning thirty (30) days after the distributor receives the unit.

On December 31, 2018, Laurence Wainer, CEO of the Company, and The Doheny Group, a major note holder of the Company, reached an agreement in which Laurence Wainer sold 8,924,000 shares of common stock and 1,000,000 shares of preferred stock for a total of $30,000. Upon completion of the sale, David Haridim, managing member of The Doheny Group, assumed the position of CEO of Blow and Drive.

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company.

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Consolidation

The accompanying consolidated financial statements include the results of operations of BDI Manufacturing (the Subsidiary). All material intercompany accounts and transactions between the Company and the Subsidiary have been eliminated in consolidation.

Going Concern

The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of September 30, 2018, the Company had an accumulated deficit of $5,449,373. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company will continue to raise funds through the sale of its equity securities or issuance of notes payable to obtain additional operating capital. The Company is dependent upon its ability to, and will continue to attempt to, secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern.

Based on the Company’s current rate of cash outflows, cash on hand and proceeds from the prior sale of equity securities and issuance of notes payable, management believes that its current cash will not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Company’s plans with respect to its liquidity issues include, but are not limited to, the following:

1)	Continue to issue restricted stock for compensation due to consultants and for its legacy accounts payable in lieu of cash payments; and
2)	Seek additional capital to continue its operations as it rolls out its current products. The Company is currently evaluating additional debt or equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction or consummate a transaction at favorable pricing.

10

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Restatements

The Company has restated its September 30, 2017 financial statements. The original September 30, 2017 financial statements erroneously recognized the entire upfront fees from two of its independent distributors in revenue at the time the Company delivered the exclusive license to the distributors rather than over the term of the agreements (5 years). To correct that error, the Company has shown the portion of the upfront fees attributable to that period only.

Reclassifications

Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue when earned and related costs of sales and expenses when incurred. The Company recognizes revenue in accordance with FASB ASC Topic 605-10-S99, Revenue Recognition, Overall, SEC Materials (“Section 605-10-S74”). Section 605-10-S99 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. Cost of revenue consists of the cost of the purchased goods and labor related to the corresponding sales transaction. When a right of return exists, the Company defers revenues until the right of return expires. The Company recognizes revenue from services at the time the services are completed. Monthly per unit fee revenue is earned and recognized over the term of the contract as support services are provided. Revenues from territory exclusivity are earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price has been determined and collectability has been reasonably assured.

11

Deferred revenue

Deferred revenue consists of customer orders paid in advance of the delivery of the order. Deferred revenue is classified as short-term as the typical order ships within approximately three weeks of placing the order. Deferred revenue is recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met.

Advertising and Marketing Costs

Advertising and marketing costs are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $81,652 and $139,811 for the nine months ended September 30, 2018 and 2017, respectively

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of September 30, 2018 and December 31, 2017 is adequate, but actual write-offs could exceed the recorded allowance.

Royalty Accrual

The Company entered into royalty agreement to be paid out in perpetuity based on number of units sold for specified product model in years 2018, 2017 and 2016 in connection with notes payable as discussed in Note 12. These estimates were performed at the inception for the notes to reflect the associated debt discount. The Company accruals royalties and is reduced by payments.

Derivative Liability

The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability.

12

Convertible Debt and Warrants Issued with Convertible Debt

Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options and ASC 740, Beneficial Conversion Features. The Company records a beneficial conversion feature (“BCF”) when convertible debt is issued with conversion features at fixed or adjustable rates that are below market value when issued. If, however, the conversion feature is dependent upon a condition being met or the occurrence of a specific event, the BCF will be recorded when the related contingency is met or occurs. The BCF for the convertible instrument is recorded as a reduction, or discount, to the carrying amount of the convertible instrument equal to the fair value of the conversion feature. The discount is then amortized to interest over the life of the underlying debt using the effective interest method.

The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation, except that the contractual life of the warrant is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense.

For modifications of convertible debt, the Company records a modification that changes the fair value of an embedded conversion feature, including a BCF, as a debt discount which is then amortized to interest expense over the remaining life of the debt. If modification is considered substantial (i.e. greater than 10% of the carrying value of the debt), an extinguishment of debt is deemed to have occurred, resulting in the recognition of an extinguishment gain or loss.

Fair Value of Financial Instruments

The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

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Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10:

	Fair Value Measurements Using
	Level 1		Level 2			Level 3
Balance December 31, 2017	$	-	$	12,302		$	-
Additions to fair value of derivative liability		-		15,370			-
Change in fair value of derivative liability		-		(9,385	)		-
Balance September 30, 2018 (unaudited)	$	-	$	18,287		$	-

Net Income (Loss) Per Share

Basic earnings per share is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive common share equivalents outstanding during the period.

Stock Based Compensation

The Company recognizes stock-based compensation in accordance with FASB ASC Topic 718 Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an employee stock purchase plan based on the estimated fair values.

For non-employee stock-based compensation, the Company applies FASB ASC Topic 505 Equity-Based Payments to Non-Employees, which requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with FASB ASC Topic 718.

Related Parties

Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company.

Concentrations

All of the Company’s ignition interlock devices are purchased from one supplier in China. The loss of this supplier could have a material impact on the Company’s ability to timely obtain additional units.

14

For the nine months ended September 30, 2018, one distributor, licensed in four states, makes up approximately 89% percent of all revenues from distributors at September 30, 2018. The loss of this distributer would have a material impact on the Company’s revenues. Per an agreement dated January 21, 2018 that memorialized a September 30, 2017 oral agreement, the Company and its largest distributor cancelled their distributorship agreement dated September 5, 2015. See Note 18 below.

Income Taxes

The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with ASC Topic 740, “Accounting for Income Taxes”. ASC 740-10-25 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Derivative Liabilities

The Company assessed the classification of its derivative financial instruments as of March 31, 2018, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as defined.

15

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”.

ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability.

Recently Issued Accounting Pronouncements

In March 2018 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-05, Income Taxes (Topic 740). The Tax Cut and Jobs Act of 2017 changes existing tax law and includes numerous provisions that will affect businesses. This guidance addresses the recognition of taxes payable or refundable for the current year and the recognition of deferred tax liabilities and deferred tax assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. The Company does not believe that this guidance will have an impact as the Company has been in a loss position and has not recognized federal taxes payable or refundable or deferred tax liabilities or deferred tax assets.

In November 2017, the FASB issued ASU No. 2017-14, Income Statement-Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). The ASU modified Topic 220 such that an operating-differential subsidy must be set forth as a separate line item in the statement of comprehensive income either under a revenue caption presented separately from revenue from contracts with customers accounted for under ASC Topic 606 or as credit in the costs and expenses section. The ASU essentially deleted Topic 605 and noted that it was superseded by Topic 606. The ASU modified Topic 606 for vaccine manufacturers to recognize revenue when vaccines are placed into Federal Governmental stockpile programs because control of the enumerated vaccines will have been transferred to the customer and the criteria to recognize revenue in a bill-and-hold arrangement under ASC Topic 606 will have been met. The Company is currently evaluating the impact of adopting this guidance.

In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition, Revenue from Contracts with Customers, Leases. The ASU adds SEC paragraphs to the new revenue and leases sections of the Accounting Standards Codification (ASC or Codification) on the announcement the SEC Observer made at the 20 July 2017 EITF meeting. The SEC Observer said that the SEC staff would not object if entities that are considered public business entities only because their financial statements or financial information is required to be included in another entity’s SEC filing use the effective dates for private companies when they adopt ASC 606, Revenue from Contracts with Customers, and ASC 842, Leases. This would include entities whose financial statements are included in another entity’s SEC filing because they are significant acquirees under Rule 3-05 of Regulation S-X, significant equity method investees under Rule 3-09 of Regulation S-X and equity method investees whose summarized financial information is included in a registrant’s financial statement notes under Rule 4-08(g) of Regulation S-X. The Company is currently evaluating the impact of adopting this guidance.

16

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share; Distinguishing Liabilities from Equity; Derivatives and Hedging; Accounting for Certain Financial Instruments with Down Round Features; Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. An entity will no longer have to consider “down round” features (i.e., a provision in an equity-linked financial instrument or an embedded feature that reduces the exercise price if the entity sells stock for a lower price or issues an equity-linked instrument with a lower exercise price) when determining whether certain equity-linked financial instruments or embedded features are indexed to its own stock. An entity that presents earnings per share (EPS) under ASC 260 will recognize the effect of a down round feature in a freestanding equity-classified financial instrument only when it is triggered. The effect of triggering such a feature will be recognized as a dividend and a reduction to income available to common shareholders in basic EPS. The new guidance will require new disclosures for financial instruments with down round features and other terms that change conversion or exercise prices. The ASU also replaces today’s indefinite deferral of the guidance in ASC 480-10 for certain mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests with a scope exception. This change does not require any transition guidance because it does not have an accounting effect. The Company is currently evaluating the impact of adopting this guidance.

In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes will be recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The effect of the adoption of the standard will depend on the nature and amount of any future transactions.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows; Classification of Certain Cash Receipts and Cash Payments. The new standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The eight issues are: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned insurance policies; distribution received from equity method investees; beneficial interests in securitization transactions; separately identifiable cash flows and application of the predominance principle. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within fiscal periods beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance.

17

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers. The new standard clarifies the implementation guidance on principal versus agent considerations in Topic 606, Revenue from Contracts with Customers. Topic 606 addresses that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. When an entity is a principal (that is, if it controls the specific good or service before that good or service is transferred to a customer) and satisfies a performance obligation, the entity recognizes revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specific good or service transferred to the customer. When an entity is an agent and satisfies a performance obligation, the entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specific good or service to be provided by the other party. The new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the impact of adopting this guidance.

In February 2016, the FASB issued ASU No. 2016-2, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for leases for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of adopting this guidance.

Note 3 - Restatements

Below are the restated September 30, 2017 financial statements. The original June 30, 2018 financial statements erroneously recognized the entire upfront fees from two of its independent distributors in revenue at the time the Company delivered the exclusive license to the distributors rather than over the term of the agreements (5 years). To correct that error, the Company has shown the portion of the upfront fees attributable to that period only.

18

Blow & Drive Interlock Corporation

Consolidated Balance Sheet

	September 30, 2017 as filed			adjustment			revised September 30, 2017
	(unaudited)			(unaudited)			(unaudited)
Assets
Current Assets
Cash	$	84,370					$	84,370
Accounts receivable, net		39,069						39,069
Prepaid Expenses		1,569						1,569
Inventories		10,650						10,650
Total Current Assets		135,658			-			135,658
Other Assets
Deposits		5,131						5,131
Furniture and equipment		925,728						925,728
Total Assets	$	1,066,517		$	-		$	1,066,517
Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts payable	$	102,791					$	102,791
Accrued expenses		235,398						235,398
Accrued royalty payable		145,317						145,317
Accrued interest		41,078						41,078
Income taxes payable		5,929						5,929
Deferred revenue		91,057			7,000			98,057
Derivative liability		62,537						62,537
Notes payable, net of debt discount of $22,431		154,069						154,069
Notes payable - related party, current portion		-						-
Convertible notes payable, net of debt discount of $3,115		54,385						54,385
Royalty notes payable, net of debt discount of $29,393		892						892
Total Current Liabilities		893,453			7,000			900,453
Long term liabilities
Notes payable, net of debt discount of $46,750		148,250						148,250
Notes payable - related party		-						-
Royalty notes payable, net of debt discount of $353,894		163,106						163,106
Accrued royalties payable		1,786						1,786
Total Liabilities		1,206,595			7,000			1,213,595
Stockholders’ Equity (Deficit)
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000,000 issued		1,000						1,000
Common stock, $0.0001 par value, 100,000,000 shares authorized, 24,057,961 outstanding		2,406						2,406
Additional paid-in capital		2,696,281						2,696,281
Accumulated deficit		(2,839,765	)		(7,000	)		(2,846,765	)
Total Stockholder’s Equity (Deficit)		(140,078	)		(7,000	)		(147,078	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	1,066,517		$	-		$	1,066,517

The accompanying notes are an integral part of these financial statements.

19

Blow & Drive Interlock Corporation

Consolidated Statements of Operations

(unaudited)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2017 as filed			adjustment		revised 2017			2017 as filed			adjustment		revised 2017
Monitoring revenue	$	394,139				$	394,139		$	674,197				$	674,197
Distributorship revenue		42,276			43,000		85,276			237,729			49,000		286,729
Total revenue		436,415			43,000		479,415			911,926			49,000		960,926
Monitoring cost of revenue		57,817					57,817			111,884					111,884
Distributorship cost of revenue		1,000					1,000			7,739					7,739
Total cost of revenue		58,817			-		58,817			119,623			-		119,623
Gross profit		377,598			43,000		420,598			792,303			49,000		841,303
Operating expenses
Payroll		272,900					272,900			457,288					457,288
Professional fees		16,603					16,603			93,505					93,505
General and administrative expenses		269,039					269,039			579,172					579,172
Depreciation		90,512					90,512			234,654					234,654
Total operating expenses		649,054			-		649,054			1,364,619			-		1,364,619
Loss from operations		(271,456	)		43,000		(228,456	)		(572,316	)		49,000		(523,316	)
Other income (expense)
Interest expense		(145,740	)				(145,740	)		(440,538	)				(440,538	)
Change in fair value of derivative liability		(6,474	)				(6,474	)		11,018					11,018
Loss on extinguishment of debt		-					-			(305,000	)				(305,000	)
Total other income (expense)		(152,214	)		-		(152,214	)		(734,520	)		-		(734,520	)
Loss before provision for income taxes		(423,670	)		43,000		(380,670	)		(1,306,836	)		49,000		(1,257,836	)
Provision for income taxes		-					-			1,600					1,600
Net loss	$	(423,670	)	$	43,000	$	(380,670	)	$	(1,308,436	)	$	49,000	$	(1,259,436	)
Basic and diluted loss per common share	$	(0.02	)			$	(0.02	)	$	(0.06	)			$	(0.06	)
Weighted average number of common shares outstanding - basic and diluted		22,856,861					22,856,861			21,922,340					21,922,340

The accompanying notes are an integral part of these financial statements.

20

Blow & Drive Interlock Corporation

Consolidated Statement of Cash Flows

(unaudited)

	Nine Months Ended September 30,
	2017 as filed			adjustment			revised 2017
Cash flows from operating activities:
Net loss	$	(1,308,436	)	$	49,000		$	(1,259,436	)
Adjustments to reconcile from net loss to net cash used in operating activities
Depreciation and amortization		234,654						234,654
Loss on fixed assets disposals		12,989						12,989
Shares issued for services		14,188						14,188
Allowance for doubtful accounts		5,412						5,412
Loss on extinguishment of debt		305,000						305,000
Amortization of debt discount		275,465						275,465
Change in fair value of derivative liability		(11,019	)					(11,019	)
Changes in operating assets and liabilities
Accounts receivable		6,760						6,760
Prepaid expenses		792						792
Deposits		1,123						1,123
Accounts payable		74,541						74,541
Accrued expenses		193,409						193,409
Accrued interest		30,968						30,968
Deferred revenue		(15,274	)		(49,000	)		(64,274	)
Net cash used in operating activities		(179,428	)		-			(179,428	)
Cash flows from investing activities:
Purchase of property and equipment		(817,026	)					(817,026	)
Deposits on units		250,000						250,000
Net cash used in investing activities		(567,026	)		-			(567,026	)
Cash flows from financing activities:
Proceeds from notes payable		195,400						195,400
Repayments of notes payable		(14,268	)					(14,268	)
Repayments of royalty notes payable		(65,529	)					(65,529	)
Repayment of related party notes payable		(54,187	)					(54,187	)
Proceeds from issuance of common stock		653,099						653,099
Net cash provided by financing activities		714,515			-			714,515
Net increase (decrease) in cash		(31,939	)		-			(31,939	)
Cash, beginning of period		116,309						116,309
Cash, end of period	$	84,370		$	-		$	84,370
Supplemental disclosure of cash information:
Cash paid during the period for:
Interest	$	134,105					$	134,105
Income taxes	$	-					$	-
Supplemental disclosure of non-cash investing and financing activities
Common stock and warrants issued for services	$	14,188					$	14,188
Establishment of debt discount for royalty notes	$	-					$	-
Preferred stock issued for debt reduction and services	$	350,000					$	350,000

The accompanying notes are an integral part of these financial statements.

21

Blow & Drive Interlock Corporation

Consolidated Statement of Shareholders’ Equity (Deficit)

(unaudited)

	Preferred Stock				Common Stock				Additional Paid-in			Accumulated						revised Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Capital			Deficit			adjustment			Deficit			(Deficit)
Balance December 31, 2016		-	$	-		19,575,605	$	1,958	$	1,594,721		$	(1,531,330	)	$	(56,000	)	$	(1,587,330	)	$	9,349
Shares issued for services		-		-		27,180		3		13,910												13,913
Warrants issued for services										278												278
Shares issued related to debt		1,000,000		1,000		195,400		19		434,700												435,719
Shares issued for cash		-		-		3,736,894		374		652,725												653,099
Shares issued related to anti-dilution		-		-		522,882		52		(52	)											-
Net loss		-		-		-		-		-			(1,308,436	)		49,000			(1,259,436	)		(1,259,436	)
Balance September 30, 2017		1,000,000	$	1,000		24,057,961	$	2,406	$	2,696,282		$	(2,839,766	)	$	(7,000	)	$	(2,846,766	)	$	(147,078	)

The accompanying notes are an integral part of these financial statements.

22

Note 4 – Segment Reporting

The Company has two reportable segments: (1) Monitoring and (2) Distributorships.

Monitoring fees on Company installed units

The Company rents units directly to customers and installs the units in the customer’s vehicles. The rental periods range from a few months to 2 years and include a combination of down payments made by the customer and monthly payments paid under the agreements with the Company. Revenue is recognized from these companies on the straight-line basis over the term of the agreement. Amounts collected in excess of those earned are classified as deferred revenue in the balance sheet, and amounts earned in excess of amounts collected are reflected in accounts receivable in the balance sheet at September 30, 2018 and December 31, 2017.

Distributorships

The Company enters into arrangements that include multiple deliverables, which typically consist of the sale of exclusive distributorship territory rights, startup supplies package, promotional material, three weeks of onsite training and ongoing monthly support services. The Company accounts for each material element within an arrangement with multiple deliverables as separate units of accounting. Revenue is allocated to each unit of accounting under the guidance of ASC Topic 605-25, Multiple-Element Revenue Arrangements, which provides criteria for separating consideration in multiple-deliverable arrangements by establishing a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third-party evidence is available. The Company is required to determine the best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis. The Company generally does not separately sell distributorships or training on a standalone basis. Therefore, the Company does not have VSOE for the selling price of these units nor is third party evidence available and thus management uses its best estimate of selling prices in their allocation of revenue to each deliverable in the multiple element arrangement.

23

The following table summarizes net sales and identifiable operating income by segment:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Segment gross profit (a):
Monitoring	$	202,694		$	336,322		$	569,244		$	562,313
Distributorships		20,240			84,276			59,505			278,990
Gross profit		222,934			420,598			628,749			841,303
Identifiable segment operating expenses (b):
Monitoring		-			86,543			-			143,955
Distributorships		-			3,552			-			89,642
		-			90,095			-			233,597
Identifiable segment operating income (c):
Monitoring		202,694			249,779			569,244			418,358
Distributorships		20,240			80,724			59,505			189,348
		222,934			330,503			628,749			607,706
Reconciliation of identifiable segment income to corporate income (d):
Payroll		240,499			272,900			706,648			457,288
Professional fees		26,175			16,603			114,230			93,505
General and administrative expenses		170,504			269,039			639,598			579,172
Depreciation		-			417			-			1,057
Interest expense		119,028			145,740			329,586			440,538
Change in fair value of derivative liability		(5,093	)		6,474			(9,385	)		(11,018	)
Loss on extinguishment of debt		-			-			-			305,000
Loss before provision for income taxes		(328,179	)		(380,670	)		(1,151,928	)		(1,257,836	)
Provision for income taxes		-			-			800			1,600
Net loss	$	(328,179	)	$	(380,670	)	$	(1,152,728	)	$	(1,259,436	)
Total net property, plant, and equipment assets
Monitoring							$	-		$	562,542
Distributorships								-			350,298
Corporate								-			12,889
							$	-		$	925,729

(a) Segment gross profit includes segment net sales less segment cost of sales

(b) Identifiable segment operating expenses consists of identifiable depreciation expense

(c) Identifiable segment operating incomes consists of segment gross profit less identifiable operating expense

(d) General corporate expense consists of all other non-identifiable expenses

24

Note 5 – Deposits

Deposits consist of the following:

	September 30, 2018		December 31, 2017
Lease Deposits	$	5,131	$	5,131

Note 6 – Accrued Expenses

Accrued Expenses consist of the following:

	September 30, 2018		December 31, 2017
Accrued payroll and payroll taxes	$	6,141	$	6,141
Deferred rent		5,306		4,945
Other accrued expenses		9,100		5,000
Total	$	20,547	$	15,685

Note 7 - Deferred Revenue

The Company classifies income as deferred until the terms of the contract or time frame have been met within the Company’s revenue recognition policy. As of September 30, 2018 and December 31, 2017, deferred revenue consists of the following:

	September 30, 2018		December 31, 2017
Monitoring deferred revenues	$	115,551	$	177,878
Distributorship deferred revenues		-		6,500
Total	$	115,551	$	184,378

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Note 8 – Notes Payable

Notes payable consist of the following:

	As of September 30, 2018									As of December 31, 2017
	Amount			Discount			Net Balance			Amount			Discount			Net Balance
January 2016 ($65,000) - 0% interest with payment of $937 per month for 4 months, $1,250 per month for 8 months, and $3,531 per month until fully paid.	$	940		$	-		$	940		$	4,482		$	(3,889	)	$	593
April 2016 ($50,000) - 18% interest at payment of $750 per month with unpaid balance due at March 31, 2018 including issuance of 50,000 common shares.		50,000			-			50,000			50,000			(7,292	)		42,708
September 2016 ($10,000) - 24% interest with outstanding balance with accrued interest due at October 31, 2018 with an option of accrued interest to be converted to common stock with 25% discount of trading price		10,000			-			10,000			10,000			-			10,000
December 2017 ($50,000) - 15% interest due in December 2020 including issuance of 100,000 shares of common stock with exercise price at $0.25 per share.		40,736			(16,360	)		24,376			50,000			(22,021	)		27,979
Total notes payable		101,676			(16,360	)		85,316			114,482			(33,202	)		81,280
Less: non-current portion		(24,994	)		8,812			(16,182	)		(35,747	)		14,473			(21,274	)
Notes payable, current portion	$	76,682		$	(7,548	)	$	69,134		$	78,735		$	(18,729	)	$	60,006

January 2016 - $65,000

On January 20, 2016, the Company entered into a non-interest bearing note payable and royalty agreement with a third party. Under the note, the Company borrowed $65,000 and began to repay the principal amount at a rate of approximately $937 per month with escalations to approximately $3,531 per month as of February 2017 until the note is paid in full. In addition, starting in February 2018, the Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. In connection with this note, the Company recorded a debt discount of $65,000 relating to the future royalty payments, to be amortized over the life of the note.

26

On September 30, 2016, the Company entered into Amendment No. 1 to Royalty note #1 in order to remove a security interest in the Company’s assets to secure repayment of the original note and amend the royalty provisions of the original note to be $1 for each Device on the road beginning in the 25th month after the date of the original note. In connection with this amendment, the Company issued 425,000 shares of restricted common stock. Pursuant to ASC 470 this amendment is a deemed extinguishment of the debt and the resulting revised debt is set up as a new note. In connection therewith, the Company recorded a loss on extinguishment of $116,541 during the year ended December 31, 2016.

Total interest expense was $0 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

April 2016 - $50,000

On March 30, 2016, the Company entered into a borrowing agreement with a third party. The note was for a principal balance of $50,000 and included 50,000 restricted common shares. The promissory note has a maturity date of June 30, 2018 and bears interest at 18% per annum. The purchaser did not sign the agreement nor deliver the proper consideration prior to March 31, 2016. The exchange of the $50,000 in cash consideration by the purchaser and the issuance of the 50,000 restricted common shares by the Company was made in conjunction with delivery of the signed purchase agreement and promissory note on April 5, 2016. The Company recorded a debt discount of $50,000 related to the relative fair value of the issued shares associated with the note to be amortized over the life of the note.

Total interest expense was $6,750 and $6,750 for the nine months ended September 30, 2018 and 2017, respectively.

September 2016 - $10,000

On September 23, 2016, the Company provided an agreement to a third party to obtain a $10,000 promissory note in exchange for 100,000 restricted common shares and $10,000 in cash. The promissory note had a maturity date of October 31, 2017 and bears interest at 24% per annum. On October 31, 2017, the note was amended to extend the maturity date to October 31, 2018. There are no other changes to the note. The Company recorded a debt discount of $10,000 related to the relative fair value of the issued shares associated with the note to be amortized over the life of the note.

Total interest expense was $1,800 and $1,800 for the nine months ended September 30, 2018 and 2017, respectively.

December 2017 - $50,000

On December 1, 2017, the Company provided an agreement to a third party to obtain a $50,000 promissory note in exchange for $50,000 in cash. The promissory note had a maturity date of December 1, 2020 and bears interest at 15% per annum. The note required total payments of $1,733 per month. The Company recorded a debt discount of $22,650 related to the value of the issued shares associated with the process of obtaining the note to be amortized over the life of the note.

Total interest expense was $5,111 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

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Note 9 – Notes Payable – Related Parties

Notes payable to related parties consist of the following:

	As of September 30, 2018											As of December 31, 2017
	Amount			Discount		Replacement			Net Balance			Amount			Discount			Net Balance
January 2016 ($55,000) – Payment of $937 per month for 4 months, $1,250 per month 5 months, and $3,531 per month until fully paid	$	-		$	-				$	-		$	5,923		$	(6,289	)	$	(366	)
November 2017 ($900,000) - 60 months of payments of $25,000 per month with $15,000 in principal payment and $10,000 in interest payment, first payment due on December 1, 2017 and the final payment on November 1, 2022.		765,000			-		(765,000	)		-			885,000			-			885,000
February 2018 ($100,000) – Fee payment of $2,500 per month, principal due February 1, 2019.		100,000			-		(100,000	)		-			-			-			-
March 2018 ($500,000) – Fee payment of $12,500 per month first year, $12,000 per month second year, $11,500 per month third year, $11,000 per month fourth year, $105,00 per month fifth year, principal due March 1, 2020.		500,000			-		(500,000	)		-			-			-			-
August 2018 ($1,365,000) – Replaced November 2017 note ($765,000 balance at August 1, 2018), February 2018 note ($100,000) and March 2018 note ($500,000). Interest only payment of $20,000 per month first nine months, then payment of $53,500 per month of principal and interest for forty-eight months after which principal will be fully paid		-			-		1,365,000			1,365,000			-			-			-
Total related party notes payable		1,365,000			-		-			1,365,000			890,923			(6,289	)		884,634
Less: non-current portion		(1,115,000	)		-		(136,250	)		(1,251,250	)		(839,306	)		-			(839,306	)
Related party notes payable, current portion	$	250,000		$	-		(136,250	)	$	113,750		$	51,617		$	(6,289	)	$	45,328

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January 2016 - $55,000

On March 29, 2016, the Company consummated a non-interest bearing note payable and royalty agreement with a relative of the CEO with terms almost identical to the note referenced above. Under the note, the Company borrowed $55,000 and began to repay the principal amount at a rate of approximately $937 per month with escalations to approximately $3,531 per month as of April 2017 until the note is paid in full. In addition, starting in February 2018, the Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. In connection with this note, the Company recorded a debt discount of $55,000 relating to the future royalty payments, to be amortized over the life of the note.

On September 30, 2016, the Company entered into Amendment No. 1 to Royalty note #2 to amend the royalty provisions of the original note to be $1 for each Device on the road beginning in the 25th month after the date of the Royalty note #2. In connection with this amendment, the Company issued 50,000 shares of restricted common stock and recorded an additional debt discount of $8,959. This amendment was accounted for as a debt modification pursuant to ASC 470.

Total interest expense was $0 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

November 2017 - $900,000

On November 1, 2017, the Company entered into an agreement with a related third party to exchange the September 2016 $36,100 note, the September 2016 $192,000 note, the October 2016 $24,960 note, the November 2016 $5,040 note, the November 2016 $50,000 note, the November 2016 $325,000 note, the January 2017 $50,400 note, the February 2017 $70,000 note, and the March 2017 $75,000 note for a new promissory note for $900,000. The new promissory note also included accrued interest payable and payment of Company expenses. The term of the loan is sixty months and payments are to be $25,000 per month with $15,000 in principal payment and $10,000 in interest payment. The first payment is to be on December 1, 2017 and the final payment on November 1, 2022. On August 1, 2018, the Company entered into an agreement with a related party to replace the balance ($765,000) on the note, the February 2018 note, and the March 2018 note with a new note for $1,365,000.

Total interest expense was $126,229 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

February 2018 - $100,000

On February 1, 2018, the Company entered into an agreement with a related third party to obtain a $100,000 promissory note in exchange for $100,000 cash. The note calls for a monthly fee of $2,500 and the principal is due February 1, 2019. On August 1, 2018, the Company entered into an agreement with a related party to replace the note, the March 2018 note, and the balance ($765,000) on the November 2017 note with a new note for $1,365,000.

Total interest expense was $15,000 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

March 2018 - $500,000

On March 1, 2018, the Company entered into an agreement with a related third party to obtain a $500,000 promissory note in exchange for $500,000 cash. The note calls for a monthly fee of $12,500 per month for the first year, $12,000 per month for the second year, $11,500 for the third year, $11,000 for the fourth year, and $10,500 for the fifth year, and the principal is due March 1, 2023. On August 1, 2018, the Company entered into an agreement with a related party to replace the note, the February 2018 note, and the balance ($765,000) on the November 2017 note with a new note for $1,365,000.

Total interest expense was $58,475 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

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August 2018 - $1,365,000

On August 1, 2018, the Company entered into an agreement with a related third party to replace the balance ($765,000) on the November 2017 note, the February 2018 note ($100,000), and the March 2018 note ($500,000) with a new note for $1,365,000. The note calls for interest only payments of $20,000 per month for the first nine months, and then payments of $53,500 per month for principal and interest. After the forty-eight months, the principal will be paid in full.

Total interest expense was $78,448 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

Note 10 – Convertible Notes Payable

Convertible notes payable consists of the following:

	As of September 30, 2018									As of December 31, 2017
	Amount			Discount			Net Balance			Amount			Discount			Net Balance
August 2015 ($15,000) - 7.5% interest bearing convertible debenture due on August 7, 2017 with interest only payments and due upon maturity.	$	7,500		$	-		$	7,500		$	7,500		$	-		$	7,500
November 2017 ($5,000) - 10% interest bearing convertible debenture due on October 27, 2020 with interest only payments and due upon maturity.		-			-			-			5,000			(2,011	)		2,989
March 2018 ($20,000) – 10% interest bearing convertible debenture due on March 9, 2021, with interest paid in cash for the first six months, and either in cash or shares of common stock thereafter. Principal is due March 9, 2021, paid either in cash or common stock, at the Company’s discretion		20,000			(12,808	)		7,192			-			-			-
Total convertible notes payable		27,500			(12,808	)		14,692			12,500			(2,011	)		10,489
Less: non-current portion		(20,000	)		7,684			(12,316	)		(5,000	)		1,483			(3,517	)
Convertible notes payable, current portion	$	7,500		$	(5,124	)	$	2,376		$	7,500		$	(528	)	$	6,972

August 2015 - $15,000

On August 7, 2015, the Company entered into an agreement with a third party non-affiliate and issued a 7.5% interest bearing convertible debenture for $15,000 due on August 7, 2017, with conversion features commencing after 180 days following the date of the note. Payments of interest only were due monthly beginning September 2015. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading days prior to the conversion date. In connection with this Convertible note payable, the Company recorded a $5,770 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 9). On May 6, 2016 the note holder elected to convert $7,500 in principal into 30,000 shares of common stock. The note is currently in default.

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In connection with the issuance of the August Convertible Note Payable, the Company issued a warrant on August 7, 2015 to purchase 30,000 shares of the Company’s common stock at a purchase price of $0.50 per share. The Black Scholes model was used in valuing the warrants in determining the relative fair value of the warrants issued in connection with the convertible note payable using the following inputs: Expected Term – 3 years, Expected Dividend Rate – 0%, Volatility – 100%, Risk Free Interest Rate -1.08%. The Company recorded an additional $4,873 discount on debt, related to the relative fair value of the warrants issued associated with the note to be amortized over the life of the note.

Total interest expense was $422 and $422 for the nine months ended September 30, 2018 and 2017, respectively.

November 2017 - $5,000

On November 1, 2017, the Company entered into an agreement with a non-affiliated shareholder and issued a 10% interest bearing convertible debenture for $5,000 due on October 27, 2020. Payments of interest only are due monthly beginning December 2017. The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. In connection with this Convertible Note Payable, the Company recorded a $5,000 discount on debt (the total discount was $6,825, of which $1,825 was expensed), related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value. In June 2018, the note and related accrued interest were converted to 32,812 shares of common stock.

In connection with the issuance of the November convertible note payable, the Company issued a warrant to purchase 10,000 shares of common stock at an exercise price of $1.00 per share. The warrant has an exercise period of four years from the date of issuance. The Black Scholes model was used in valuing the warrants in determining the relative fair value of the warrants issued in connection with the convertible note payable using the following inputs: Expected Term – 4 years, Expected Dividend Rate – 0%, Volatility – 373%, Risk Free Interest Rate – 2.37%. The Company recorded an additional $2,099 discount on debt, related to the relative fair value of the warrants issued associated with the note to be amortized over the life of the note.

Total interest expense was $250 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

March 2018 - $20,000

On March 9, 2018, the Company entered into an agreement with a non-affiliated shareholder and issued a 10% interest bearing convertible debenture for $20,000 due on March 9, 2021. Payments of interest is in cash for the first six months, thereafter, interest may be paid either in cash or common stock of the Company. The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. In connection with this Convertible Note Payable, the Company recorded a $20,000 discount on debt (the total discount was $47,768, of which $27,768 was expensed), related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value. As of September 30, 2018, this note has not been converted.

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Total interest expense was $1,126 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

Note 11 – Derivative Liabilities

Derivative liabilities consisted of the following:

	September 30, 2018		December 31, 2017
August 2015 - $15,000 convertible debt	$	3,599	$	7,310
November 2017 - $5,000 convertible debt		-		4,992
March 2018 - $20,000 convertible debt		14,688		-
Total derivative liabilities	$	18,287	$	12,302

The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model.

August 2015 Convertible Debt - $15,000

In August 2015, the Company entered into a $15,000 convertible note with variable conversion pricing. The following inputs were used within the Black Sholes Model to determine the initial relative fair values of the $15,000 convertible note with expected term of 1.58 years, expected dividend rate of 0%, volatility of 100% and risk free interest rate 0.61%.

November 2017 Convertible Debt - $5,000

In November 2017, the Company entered into a $5,000 convertible note with variable conversion pricing. The following inputs were used within the Black Sholes Model to determine the initial relative fair values of the $5,000 convertible note with expected term of 3.00 years, expected dividend rate of 0%, volatility of 312% and risk free interest rate 2.37%. This note was paid in June 2018.

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March 2018 Convertible Debt - $20,000

In March 2018, the Company entered into a $20,000 convertible note with variable conversion pricing. The following inputs were used within a binomial model to determine the initial relative fair values of the $20,000 convertible note with expected term of 2.44 years, expected dividend rate of 0%, volatility of 160% and risk free interest rate 2.49%.

The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability. The following table describes the Derivative liability as of December 31, 2017 and September 30, 2018.

	Balance							Balance
	at 12/31/17		Additions		Changes			at 09/30/18
August 2015 - $15,000 convertible debt	$	7,310	$	-	$	(3,711	)	$	3,599
November 2017 - $5,000 convertible debt		4,992				(4,992	)		-
March 2018 - $20,000 convertible debt		-		15,370		(682	)		14,688
Total	$	12,302	$	15,370	$	(9,385	)	$	18,287

Note 12 – Accrued Royalties Payable

The Company has estimated the royalties to be paid out in perpetuity under royalty agreements. The Company entered into royalty agreement as follows:

● January 2016 Royalty Agreement – Under the note payable and royalty agreements of $65,000, the Company is required to pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity.

● March 2016 Royalty Agreement – On March 29, 2016, the Company entered into a royalty agreement with a relative of the CEO together with note payable of $55,000. Under the royalty agreement and starting February 2018, the Company is required to pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity.

● September and November 2016 Royalty Agreements – The Company entered into royalty agreements on September 30, 2016 and November 4, 2016 with a related party in relation to notes payable of $192,000 and $325,000, respectively. Under the royalty agreements, the Company is required to pay a royalty fee of from $1 to $2 per month for every ignition interlock devise that the Company has on the road in customers’ vehicles, the amount depending on how many devices are installed.

● November 2017 Royalty Agreement – The Company entered into a royalty agreement with a related party on November 1, 2017 in relation to a note payable of $900,000. This note replaced the September and November 2016 Royalty Agreements. Under the royalty agreement, the Company is required to pay a royalty fee of from $1.50 to $3.00 per month for every ignition interlock devise that the Company has on the road in customers’ vehicles, the amount depending on how many devices are installed.

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Based on the royalty agreement, the Company had the following royalty accruals:

	September 30, 2018			December 31, 2017
January 2016 royalty agreement	$	113,941		$	86,230
March 2016 royalty agreement		126,318			88,010
September and November 2016 royalty agreements		(5,203	)		5,753
November 2017 royalty agreement		8,530			-
August 2018 royalty agreement		11,125			-
Total accrued royalties	$	254,711		$	179,993

Note 13 – Stockholders’ Equity

Preferred Stock

The Company’s articles of incorporation authorize the Company to issue up to 20,000,000 preferred shares of $0.001 par value.

Series A Preferred Stock

The Company has been authorized to issue 1,000,000 shares of Series A Preferred Stock. The Series A shares have the following preferences: no dividend rights; no liquidation preference over the Company’s common stock; no conversion rights; no redemption rights; no call rights by the Company; each share of Series A Preferred stock will have one hundred (100) votes on all matters validly brought to the Company’s common stockholders.

During the three months ended March 31, 2017, the Company entered into a material definitive agreement to issue 1,000,000 shares of series A preferred stock to an officer and director of the Company with a preliminary estimated value of $350,000. As of September 30, 2018, the total number of preferred shares issued or issuable was 1,000,000.

Common Stock

The Company has authorized 100,000,000 shares of $.0001. Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company’s ability to pay dividends on its common stock, subject to the requirements of the Delaware Revised Statutes. The Company has not declared any dividends since incorporation.

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During the nine months ended September 30, 2018, the Company issued 476,000 shares of its common stock for services valued at $110,200. In addition , the Company and sold 4,340,883 shares of its common stock to several investors for an aggregate purchase price of $458,705. In addition, the Company issued 538,256 common shares in accordance with the anti-dilution provisions of Royalty notes #3 and #4. In addition, the Company issued 32,812 common shares in the conversion of $5,083 of notes payable. The total number of shares issued or issuable as of September 30, 2018 was 31,611,785.

Note 14 – Warrants

The Company issued warrants in individual sales and in connection with common stock purchase agreements. The warrants have expiration dates ranging from three to four years from the date of grant and exercise prices ranging from $0.10 to $1.00.

A summary of warrant activity for the periods presented is as follows:

			Weighted Average
	Warrants for		Weighted Average		Remaining		Aggregate
	Common Shares		Exercise Price		Contractual Term		Intrinsic Value
Outstanding as of December 31, 2016		160,000	$	0.53		1.97		-
Granted		4,697,176		0.51		4.00
Exercised		-		-		-		-
Forfeited, cancelled, expired		-		-		-		-
Outstanding as of December 31, 2017		4,857,176	$	0.51		3.19		412,864
Granted		930,410		1.35		4.00		-
Exercised		-		-		-		-
Forfeited, cancelled, expired		-		-		-		-
Outstanding as of September 30, 2018		5,787,586	$	0.60		2.59		-

Note 15 – Income (Loss) Per Share

Net income (loss) per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net income (loss) per common share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive.

The following shares are not included in the computation of diluted income (loss) per share, because their inclusion would be anti-dilutive:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Preferred shares	-		-		-		-
Convertible notes		155,190		375,082		155,190		375,082
Warrants		5,787,586		5,137,298		5,787,586		5,137,298
Options		-		-		-		-
Total anti-dilutive weighted average shares		5,942,776		5,512,380		5,942,776		5,512,380

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If all dilutive securities had been exercised at September 30, 2018, the total number of common shares outstanding would be as follows:

Common Shares	31,611,785
Preferred Shares	-
Convertible notes	155,190
Warrants	5,787,586
Options	-
Total potential shares	37,554,561

Note 16 – Commitments and Contingencies

On December 1, 2016, the Company entered into a four-year lease with Cahuenga Management LLC for a storefront location at 15503 Cahuenga Blvd., North Hollywood, California 91601. Base rent under the lease is $2,200 per month, with an escalating provision up to $2,404 throughout the lease term. The rental agreement includes operating expenses such as common area maintenance, property taxes and insurance.

On August 28, 2017, the Company entered into a one-year lease with B3 Investments, LLC for a storefront location at Suites D104 and D105, 2406 24^th Street, South Phoenix, Arizona. Base rent under the lease is $1,350 per month plus 2% ($27) rental tax. The rental agreement includes operating expenses such as common area maintenance, property taxes and insurance.

Legal Proceedings

In the ordinary course of business, the Company from time to time is involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. However, in the opinion of management, other than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse effect on the Company’s financial position or results of operations.

Note 17 – Related Party Transactions

The Company had the following related party transactions:

Notes payable of $1,365,000 to the Doheny Group.

3,208,017 shares of common stock, of which 1,863,152 were granted to the Doheny Group in relation to notes payable and 1,294,865 were granted to the Doheny Group as anti-dilution shares.

50,000 warrants were granted to David Haridim.

Note 18 – Settlement with Distributor

On January 21, 2018, the Company and its major distributor memorialized a September 30, 2017 oral agreement that terminated their September 5, 2015 distributorship agreement. The distributor had failed to timely make required monthly payments. The Company agreed to not pursue amounts due it from the distributor. The Company has sent letters to all customers of the distributor and believes that it will retain most, if not all, customers. If customers are not retained, the customers will need to have the interlock device removed and returned to the Company. The Company had approximately 900 interlock units rented to the distributor. As of December 31, 2017, $35,979 in distributor revenue and accounts receivable were reversed out. As of October 1, 2017, the distributor became an employee of the Company and was to service the area that he had been a distributor of.

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Note 19 – Subsequent Events

The Company follows the guidance in FASB ASC Topic 855, Subsequent Events (“ASC 855”), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. ASC 855 sets forth (i) the period after the balance sheet date during which management of a reporting entity evaluates events or transactions that may occur for potential recognition or disclosure in the consolidated financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its consolidated financial statements, and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date.

On October 4, 2018, Michael Wainer entered into a personal loan agreement with Kabbage for $72.800. Michael Wainer then lent $72,800 to the Company. The loan was for twelve months and loan fees and interest were $37,128. Payments were $11,527 per month for the first six months and $6,795 per month for the final six months. Payments were to be paid by the Company to Kabbage. An initial payment of $11,527 was made in December 2018. On December 31, 2018, Michael Wainer released the Company from payment of the loan.

On October 11, 2018, the Company entered into a loan agreement with Forward Financing for $60,000. Total interest and fees on the loan were $18,600. Payments of $561.43 were automatically paid each business day starting October 15, 2018 and were to be for 140 days business days. On January 11, 2019, Forward Financing agreed to settle an outstanding balance of $49,580.64 for $30,805.64,

On December 1, 2018, an addendum (addendum #4) was made to the November 1, 2016 loan agreement with The Doheny Group. A December 1, 2018 payment by the Company was not made and thus the Company was in default to the Doheny Group. Therefore, the royalty will become $5.00 per unit on all units in perpetuity, the loan amount has increased to $2,000,000, as of December 1, 2018 payment of $20,000 was not made and the loan amount became $2,020,000, a new monthly payment of $50,500 interest only will be due as of January 1, 2019, if the full $50,500 cannot be paid, then a partial payment will be made with the unpaid amount added to the principal, and a balloon payment of the balance of principal owed shall be made on December 1, 2023.

On December 17, 2018, the Company entered into a loan agreement with The Doheny Group for $6,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $6,000 on December 17, 2019.

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On December 31, 2018, the Company entered into a loan agreement with The Doheny Group for $23,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $23,000 on December 31, 2019.

On December 31, 2018, the Company reached a settlement with note holder Rafael Mavashev in which a $10,000 promissory note and accrued interest were settled for payment of $1,000.

On December 31, 2018, the Company reached a settlement with note holder Edris Consulting in which a $65,000 royalty note and royalties owed were settled for payment of $3,000.

On December 31, 2018, the Company reached a settlement with note holder Oren Azulay in which a $50,000 promissory note and accrued interest payable were settled for payment of $13,000.

On December 31, 2018, Laurence Wainer, CEO of the Company, and The Doheny Group, a major note holder of the Company, reached an agreement in which Laurence Wainer sold 8,924,000 shares of common stock and 1,000,000 shares of preferred stock for a total of $30,000. Upon completion of the sale, David Haridim, managing member of The Doheny Group, assumed the position of CEO of Blow and Drive.

On January 3, 2019, the Company entered into a loan agreement with the Doheny Group for $32,700. The note has no interest (0%), no monthly payments, and a balloon payment of $32,700 on January 3, 2020.

On January 11, 2019, the Company entered into a loan agreement with the Doheny Group for $40,000. The note has no interest (0%), no monthly payments, and a balloon payment of $40,000 on January 11, 2020.

On January 15, 2019, the Company entered into a loan agreement with the Doheny Group for $14,500. The note has no interest (0%), no monthly payments, and a balloon payment of $14,500 on January 15, 2020.

On January 30, 2019, the Company reached a release of all claims with note holder Lucky Draw, LLC. The Company owed Lucky Draw a promissory note payable of $50,000 and accrued interest.

On February 1, 2019, the Company entered into a loan agreement with the Doheny Group for $15,000. The note has no interest (0%), no monthly payments, and a balloon payment of $15,000 on February 1, 2020.

On February 19, 2019, the Company entered into a loan agreement with The Doheny Group for $5,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $5,000 on February 19, 2020.

On March 4, 2019, the Company entered into a loan agreement with The Doheny Group for $10,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $10,000 on March 4, 2020.

On May 1, 2019, the Company entered into a loan agreement with The Doheny Group for $20,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $20,000 on May 1, 2020.

On June 3, 2019, the Company entered into a loan agreement with The Doheny Group for $89,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $89,000 on June 3, 2020.

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ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Disclaimer Regarding Forward Looking Statements

Our Management’s Discussion and Analysis or Plan of Operations contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

We are a previous development stage company that was incorporated in the State of Delaware in July 2013. In the year ending December 31, 2017, we generated total revenues of $1,235,433, compared to $303,765 in the year ending December 31, 2016. For the three months ended September 30, 2018 and 2017, we had total revenues of $241,658 and $479,415, respectively, and a net loss of $328,179 and $380,760, respectively.

We market distributorships and lease a breath alcohol ignition interlock device called the BDI-747/1, which is a mechanism that is installed on the steering column of an automobile and into which a driver exhales. The device in turn provides a blood-alcohol concentration analysis. If the driver’s blood-alcohol content is higher than a certain pre-programmed limit, the device prevents the ignition from engaging and the automobile from starting. These devices are often required for use by DUI or DWI (“driving under the influence” or “driving while intoxicated”) offenders as part of a mandatory court or motor vehicle department program.

We paid Well Electric, a company located in China with experience in design and manufacture of ignition interlock devices, $30,000 to design and manufacture the prototype ignition interlock device for us. Well Electric produced six prototype devices for us which we received in November 2014.

At July 27, 2015 we began production of our patent pending BDI Model #1 power line filter to attach to our BDI-747 Breath Alcohol Ignition Interlock Device which together were certified by NHSTA on June 17, 2015 to work to together to meet or exceed 2013 NHSTA guidelines.

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As of December 31, 2017, the BDI-747/1 was approved for use in five states, namely Oregon, Texas, Arizona, Kentucky, and Tennessee. As of December 31, 2018, the BDI-747/1 device was approved in Oregon, Texas, Arizona, and Kentucky. As of March 31, 2019, the BDI-747/1 device was only approved in Arizona and Texas. The states where our BDI-747/1 device is approved has decreased primarily as a result of new state certification rules that require increased capital investment that we are not able to afford.

We have a storefront location in Phoenix, Arizona and contract with four qualified contractors to install, calibrate, remove and monitor the devices. Our business plan includes growth of the company by continuing to complete and submit more state applications and to build up our service infrastructure by utilizing our own retail infrastructure, distributors and franchisees.

As of December 31, 2017, we had approximately 1,558 units on the road, with approximately 1,451 devices being leased directly from us and approximately 107 devices leased through our distributors. As of September 30, 2018, we had approximately 1,081 units on the road, with approximately 892 devices being leased directly from us and approximately 186 devices leased through our distributors. As of December 31, 2018, we had approximately 1,100 units on the road, with approximately 885 devices being leased directly from us and approximately 215 devices leased through our distributors. The decrease in the total number of devices we have on the road is primarily due to the fact the BDI-747/1 devices was approved in fewer states in 2018 compared to 2017.

Due to the decrease in the number of states where our BDI-747/1 device is approved, and the resulting decrease in the number of devices we have on the road, our management is currently exploring all options related to our business, including, but not limited to: (i) taking out loans or selling our stock in order to raise money to continue, and try to expand, our current business; (ii) trying to acquire a synergistic business and grow our current business; or (iii) selling our current business and trying to find another business to, in or out of our current business segment, to take over the public corporation.

Our website is www.blowanddrive.com.

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Results of Operations

Three Months Ended September 30, 2018 (Unaudited) Compared to Three Months Ended September 30, 2017 (Unaudited)

	For the three months ended September 30,
	2018			2017
				(restated)
Revenue
Monitoring revenue	$	221,418		$	394,139
Distributorship revenue		20,240			85,276
Total revenue		241,658			479,415
Monitoring cost of revenue		18,724			57,817
Distributorship cost of revenue		-			1,000
Total cost of revenue		18,724			58,817
Gross profit	$	222,934		$	420,598
Operating expenses
Payroll		240,499			272,900
Professional fees		26,175			16,603
General and administrative expenses		170,504			269,039
Depreciation		-			90,512
Total operating expenses		437,178			649,054
Loss from operations		(214,244	)		(228,456	)
Other income (expense)
Interest expense, net		(119,028	)		(145,740	)
Change in fair value of derivative liability		5,093			(6,474	)
Gain (loss) on extinguishment of debt		-			-
Total other income (expense)		(113,935	)		(152,214	)
Net loss	$	(328,179	)	$	(380,760	)

Operating Loss; Net Loss

Our net loss decreased by $52,581, from ($380,760) for the three months ended September 30, 2017 to ($328,179) for the three months ended September 30, 2018. Our operating loss decreased by $14,212, from ($228,456) to ($214,233) for the same periods. The decrease in our net loss for the three months ended September 30, 2018, compared to the three months ended September 30, 2017, is primarily the result of decreases in our general and administrative expenses, payroll and depreciation, partially offset by a slight increase in our professional fees. These changes are detailed below.

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Revenue

During the three months ended September 30, 2018 we had $241,658 in revenues, with $221,418 coming from revenue from the monthly recurring payments we received from our customers that rent our BDI-747/1 breathalyzer device for the ongoing monitoring services related to the devices, and $20,240 coming from revenues received from our distributors, compared to $394,139 and $85,276 from these revenue sources for the same period one year ago, respectively. Notably, the source of our revenue continued to shift from revenue received our distributors to the revenue we receive from the monthly recurring payments we received from our customers that rent our BDI-747/1 breathalyzer device for the ongoing monitoring services related to the devices in the period ended September 30, 2018, compared to September 30, 2017. We expect the majority of our revenue in the future to come from the monthly recurring payments we receive from our customers that rent our BDI-747/1 breathalyzer device for the ongoing monitoring services related to the devices and not from distributors as we shift away from using distributors and more towards direct retail of our devices.

Cost of Revenue

Our cost of revenue for the three months ended September 30, 2018 was $18,724, compared to $58,817 for the three months ended September 30, 2017. Our cost of revenue for the three months ended September 30, 2018 was completely related to our monthly monitoring services we provide to our customers. For the three months ended September 30, 2017, our cost of revenue was attributed as $57,817 to monitoring cost of revenue and $1,000 to distributorship cost of revenue. Again, we expect this shift in our cost of revenue to monitoring cost of revenue to continue as we move away from using distributors and more towards direct retail of our devices.

Payroll

Our payroll decreased by $32,401 from $272,900 for the three months ended September 30, 2017 to $240,499 for the three months ended September 30, 2018. This decrease was related to needing fewer personnel as we have fewer units on the road, which relates to a decrease in estimated payroll taxes. If we continue to decrease the number of units we have on the road we expect our payroll will continue to decrease.

Professional Fees

Our professional fees increased by $9,572 from $16,603 for the three months ended September 30, 2017 to $26,175 for the three months ended September 30, 2018. These fees are largely related to fees paid for legal, accounting and audit services. We expect these fees to grow steadily if our business expands. In the event we undertake an unusual transaction, such as an acquisition, securities offering, or file a registration statement, we would expect these fees to substantially increase during that period.

General and Administrative Expenses

General and administrative expenses decreased by $98,535 from $269,039 for the three months ended September 30, 2017 to $170,504 for the three months ended September 30, 2018. Decreases were $54,738 for advertising, $23,433 for fixed assets adjustment, $22,020 for bad debt expense, $14,275 for commissions, $13,446 for investor relations, and $30,072 miscellaneous small expenses, offset by increases of $29,866 for software expense, $17,167 for special parts, and $12,416 for rent expense.

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Depreciation

Our depreciation decreased from $90,512 for the three months ended September 30, 2017 to $0 for the three months ended September 30, 2018. Our depreciation expense in the period ended September 30, 2017 was primarily related to the depreciation of the BDI-747/1 device. Since we fully impaired our remaining BDI-747/1 devices for the period ended September 30, 2018, due to the uncertainty with the direction of our business going forward, we did not have a depreciation expense for the three months ended September 30, 2018.

Interest Expense

Interest expense decreased by $26,712 from $145,740 for the three months ended September 30, 2017 to $119,028 for the three months ended September 30, 2018. The interest expense decreased for the period ended September 30, 2018, compared to the same period one year ago, due to a decrease in our outstanding debt compared to one year ago, which primarily relate to the loans we received from Doheny Group, LLC.

Change in Fair Value of Derivative Liability

During the three months ended September 30, 2018, we had a change in fair value of derivative liability of $5,093 compared to ($6,474) for the three months ended September 30, 2017. The change in fair value of derivative liability for both periods relates to the conversion feature of a promissory note we had outstanding during these periods. Since the conversion price on the promissory note is calculated based on a discount to the closing price of our common stock, as our closing price fluctuates it changes the fair value of the derivative liability.

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Nine Months Ended September 30, 2018 (Unaudited) Compared to Nine Months Ended September 30, 2017 (Unaudited)

	For the Nine Months ended September 30,
	2018			2017
				(restated)
Revenue
Monitoring revenue	$	664,649		$	674,197
Distributorship revenue		59,505			286,729
Total revenue		724,154			960,926
Monitoring cost of revenue		95,405			111,884
Distributorship cost of revenue		-			7,739
Total cost of revenue		95,405			119,623
Gross profit	$	628,749		$	841,303
Operating expenses
Payroll		706,648			457,288
Professional fees		114,230			93,505
General and administrative expenses		639,598			579,172
Depreciation		-			234,654
Total operating expenses		1,460,476			1,364,619
Loss from operations		(831,727	)		(523,316	)
Other income (expense)
Interest expense, net		(329,586	)		(440,538	)
Change in fair value of derivative liability		9,385			11,018
Gain (loss) on extinguishment of debt		-			(305,000	)
Total other income (expense)		(320,201	)		(734,520	)
Provision for income taxes		800			1,600
Net loss	$	(1,152,728	)	$	(1,259,436	)

Operating Loss; Net Loss

Our net loss decreased by $106,708, from ($1,259,436) for the nine months ended September 30, 2017 to ($1,152,728) for the nine months ended September 30, 2018. Our operating loss increased by $308,411, from ($523,316) to ($831,727) for the same periods. We only had a slight decrease in our net loss for the nine months ended September 30, 2018, compared to the nine months ended September 30, 2017, despite the fact we had less revenue and higher operating expenses, primarily due to the fact we did not have the one-time loss on extinguishment of debt in 2018 that we had in 2017. These changes are detailed below.

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Revenue

During the nine months ended September 30, 2018 we had $724,154 in revenues, with $664,649 coming from revenue from the monthly recurring payments we received from our customers that rent our BDI-747/1 breathalyzer device for the ongoing monitoring services related to the devices, and $59,505 coming from revenues received from our distributors, compared to $674,197 and $286,729 from these revenue sources for the same period one year ago, respectively. Notably, the source of our revenue continued to shift significantly from revenue received our distributors in the period ended September 30, 2017, to the revenue we receive from the monthly recurring payments we received from our customers that rent our BDI-747/1 breathalyzer device for the ongoing monitoring services related to the devices in the period ended September 30, 2018. We expect the majority of our revenue in the future to come from the monthly recurring payments we receive from our customers that rent our BDI-747/1 breathalyzer device for the ongoing monitoring services related to the devices and not from distributors as we shift away from using distributors and more towards direct retail of our devices.

Cost of Revenue

Our cost of revenue for the nine months ended September 30, 2018 was $95,405, compared to $119,623 for the nine months ended September 30, 2017. Our cost of revenue for the nine months ended September 30, 2018 was completely related to our monthly monitoring services we provide to our customers. For the nine months ended September 30, 2017, our cost of revenue was attributed as $111,884 to monitoring cost of revenue and $7,739 to distributorship cost of revenue. Again, we expect this shift in our cost of revenue to monitoring cost of revenue to continue as we move away from using distributors and more towards direct retail of our devices.

Payroll

Our payroll increased by $249,360 from $457,288 for the nine months ended September 30, 2017 to $706,648 for the nine months ended September 30, 2018. This increase was related to hiring additional personnel as we put more units on the road and to a large increase in estimated payroll taxes. If we expand our operations, especially by renting units to individuals directly from us (as opposed to through distributors), we expect our payroll will continue to increase as we put additional units on the road.

Professional Fees

Our professional fees increased by $20,725 from $93,505 for the nine months ended September 30, 2017 to $114,230 for the nine months ended September 30, 2018. These fees are largely related to fees paid for legal, accounting and audit services. We expect these fees to continue grow steadily if our business expands. In the event we undertake an unusual transaction, such as an acquisition, securities offering, or file a registration statement, we would expect these fees to substantially increase during that period.

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General and Administrative Expenses

General and administrative expenses increased by $60,426 from $579,172 for the nine months ended September 30, 2017 to $639,598 for the nine months ended September 30, 2018. Increases were $166,579 for software expense, $70,079 for royalty expense, $41,200 for special parts expense, $34,836 for telephone expense, $34,462 for investor relations, $29,836 and for rent expense, offset by decreases of $58,159 for advertising expense, $52,683 for fixed assets adjustment, $44,000 for settlement with former officer, $40,858 for commissions, $27,593 for postage and delivery, $22,020 for bad debt expense, and $71,253 for small miscellaneous expenses. Notably, in the nine months ended September 30, 2017, we paid a settlement of $50,000 to an ex-employee and removed the higher amount we had accrued for that employee, and we amended our preferred stock purchase agreement with Mr. Laurence Wainer such that his payment for the shares was full satisfaction of approximately $45,000 of debt owed to him rather than $25,500 of accrued salary, which was the original payment. We did not have these types of one-time transactions in the nine months ended September 30, 2018. In quarters that we do not have similar one-time transactions we expect our general and administrative expenses to be around $125,000 to $150,000 per quarter for the foreseeable future.

Depreciation

Our depreciation decreased from $234,654 for the nine months ended September 30, 2017 to $0 for the nine months ended September 30, 2018. Our depreciation expense in the period ended September 30, 2017 was primarily related to the depreciation of the BDI-747/1 device. Since we fully impaired our remaining BDI-747/1 devices for the period ended September 30, 2018, due to the uncertainty with the direction of our business going forward, we did not have a depreciation expense for the nine months ended September 30, 2018.

Interest Expense

Interest expense decreased by $110,952 from $440,538 for the nine months ended September 30, 2017 to $329,586 for the nine months ended September 30, 2018. The interest expense decreased for the period ended September 30, 2018, compared to the same period one year ago, due to a decrease in our outstanding debt compared to one year ago, which primarily relates to the loans we received from Doheny Group, LLC.

Change in Fair Value of Derivative Liability

During the nine months ended September 30, 2018, we had a change in fair value of derivative liability of $9,385 compared to $11,018 for the nine months ended September 30, 2017. The change in fair value of derivative liability for both periods relates to the conversion feature of a promissory note we had outstanding during these periods. Since the conversion price on the promissory note is calculated based on a discount to the closing price of our common stock, as our closing price fluctuates it changes the fair value of the derivative liability.

Loss on Extinguishment of Debt

During the nine months ended September 30, 2018, we had loss on extinguishment of debt of $0, compared to $305,000 during the same period in 2017. The loss on extinguishment of debt during the period in 2017 related to debt retired through the issuance of preferred stock to Laurence Wainer.

Liquidity and Capital Resources for the Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017

Introduction

Our cash on hand as of September 30, 2018 was $42,124, compared to $31,874 at December 31, 2017. During the nine months ended September 30, 2018 and 2017, because of our operating losses, we did not generate positive operating cash flows. As a result, we have short term cash needs. These needs are being satisfied through proceeds from the sales of our securities and loans from both related parties and third parties. We currently do not believe we will be able to satisfy our cash needs from our revenues for some time.

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Our cash, current assets, total assets, current liabilities, and total liabilities as of September 30, 2018 and as of December 31, 2017, respectively, are as follows:

	September 30, 2018		December 31, 2017		Change
Cash	$	42,124	$	31,874	$	10,250
Total current assets	$	50,127	$	63,445	$	(13,318	)
Total assets	$	55,258	$	68,576	$	(13,318	)
Total current liabilities	$	735,519	$	585,749	$	149,770
Total liabilities	$	2,015,267	$	1,449,846	$	565,421

Our current assets decreased as of September 30, 2018 as compared to December 31, 2017, primarily due to us having less accounts receivable, net, partially offset by more cash on hand. The decrease in our total assets between the two periods was also primarily related to having less accounts receivable, net, partially offset by more cash on hand.

Our current liabilities increased as of September 30, 2018 as compared to December 31, 2017. This increase was primarily due to increases in our accrued expenses, accrued royalty payable, accrued interest, derivative liability, notes payable, and notes payable-related party, offset by decreases in accounts payable and deferred revenue.

In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources. There is no assurance, however, that we will be successful in these efforts.

Sources and Uses of Cash

Operations

We had net cash used in operating activities of $924,727 for the nine months ended September 30, 2018, as compared to $179,428 for the nine months ended September 30, 2017. For the period in 2018, the net cash used in operating activities consisted primarily of our net income (loss) of ($1,152,728), an allowance for doubtful accounts of ($26,541), adjusted primarily by non-cash change in fair value of derivative liability of $9,385, shares issued for services of $110,200, debt converted to common shares of $5,083 and amortization of debt discount of $27,704, as well as changes in, accrued expenses of $4,863, accounts receivable of $50,102, prepaid expenses of $7, deferred revenue of ($68,827), accounts payable of ($36,695), accrued royalties payable of $74,718, and accrued interest of $99,773. For the period in 2017, the net cash used in operating activities consisted primarily of our net loss of $1,259,436 (restated), a decrease in deferred revenue of $64,274 (restated), and a non-cash change in fair value of derivative liability of $11,019, offset by a decrease in accounts receivable of $6,760, an increase in accounts payable of $74,541, an increase in accrued expenses of $193,409, an increase in accrued interest of $30,968, a decrease in deposits of $1,123, a decrease in prepaid expenses of $792, and changes in non-cash loss on extinguishment of debt of $305,000, amortization of debt discount of $275,465, depreciation of $234,654, shares issued for services of $14,188, fixed assets disposed of $12,989, and allowance for doubtful accounts of $5,412.

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Investments

We did not have any cash provided by/used in investing activities in the nine months ended September 30, 2018, compared to cash used in investing activities of $567,026 for the nine months ended September 30, 2017. For the nine months ended September 30, 2017, the cash used in investing activities was related to purchases of furniture and equipment of ($817,026), partially offset by deposits on units of $250,000.

Financing

We had net cash provided by financing activities for the nine months ended September 30, 2018 of $934,977, compared to $714,515 for the nine months ended September 30, 2017. For the nine months ended September 30, 2018, our net cash from financing activities consisted of proceeds from convertible notes payable of $20,000, proceeds from related party notes payable of $600,127, proceeds of notes payable of $21,600, and proceeds from issuance of common stock of $458,705, partially offset by repayments of notes payable of $34,405, repayments of convertible notes payable of $5,000, and repayments of related party notes payable of $126,050. For the nine months ended September 30, 2017, our net cash from financing activities consisted of proceeds from notes payable of $195,400 and proceeds from issuance of common stock of $653,099, partially offset by repayments of notes payable of $46,037, and repayments relate party note payable of $87,947.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements.

Commitments and Contingent Liabilities

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. As of September 30, 2018, we have no contingent liability that is required to be recorded nor disclosed.

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 4 Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to rules adopted by the Securities and Exchange Commission we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to rules promulgated under the Securities Exchange Act of 1934. This evaluation was done as of the end of September 30, 2018 under the supervision and with the participation of our principal executive officer and our principal financial officer.

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Based upon our evaluation, our principal executive and financial officer concluded that, as of September 30, 2018, our existing disclosure controls and procedures were not effective. Disclosure controls and procedures means controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management, including the principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. With only two officers in charge of such reporting controls, there is no backup to the oversight of such individual and thus such disclosure controls and procedures may not be considered effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our first quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Internal Control over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting in accordance with Rule 13a-15 of the Securities Exchange Act of 1934. Our president conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2018, based on the criteria establish in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was ineffective as of September 30, 2018, based on those criteria. A control system can provide only reasonably, not absolute, assurance that the objectives of the control system are met and no evaluation of controls can provide absolute assurance that all control issues have been detected.

Management assessed the effectiveness of our internal control over financial reporting as of September 30, 2018 and identified the following material weaknesses, which are outlined further in our Annual Report on Form 10-K for the year ended December 31, 2017:

Inadequate segregation of duties: We have an inadequate number of personnel to properly implement control procedures.

We have not documented our internal controls: We have limited policies and procedures that cover the recording and reporting of financial transactions and accounting provisions. As a result we may be delayed in our ability to calculate certain accounting provisions.

We do not have effective controls over the control environment. A formally adopted written code of business conduct and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed and effectively communicated to our employees its accounting policies and procedures. This has resulted in inconsistent practices. We also do not have independent members on our Board of Directors.

We have not been able to timely and accurately record convertible debt transactions, deferred revenue, and derivative liabilities in the financial statements. As a result, we have needed additional time, beyond the filing deadlines, to file our periodic reports.

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PART II – OTHER INFORMATION

ITEM 1 Legal Proceedings

On February 21, 2018, we filed a Complaint in the Superior Court of the State of Arizona, County of Maricopa against EZ Interlock, LLC (Blow & Drive Interlock Corp. v. EZ Interlock, LLC (Case No. CV2018-051689, Superior Court of the State of Arizona, Maricopa County) for Conversion, Implied/Quasi Contract and Quantum Meruit, Unjust Enrichment, Tortious Interference with Business Expectancy/Prospective Business Relations, and Lost Profits. The basis for our lawsuit was that EZ Interlock an authorized installer of ours in the State of Arizona, was a customer of BDI Interlock, LLC, one of our distributors, and EZ Interlock was installing our BDI-747/1 devices for customers in Arizona and collecting fees from such customers, but stopped remitting payment to BDI Interlock, LLC, which, in turn, was unable to remit funds to us. We filed the lawsuit to have EZ Interlock stop installing our devices, return our devices in its possession, and pay the amounts owed to BDI Interlock and us for the customers paying EZ Interlock for our devices. EZ Interlock filed an Answer and Counterclaim on July 23, 2018. Shortly after filing our Complaint, the Court granted our request for a Temporary Restraining Order and Preliminary Injunction from continuing to install devices and return the devices in its possession. On February 7, 2019, our new management elected to dismiss the lawsuit, without prejudice, based on their opinion that our chances of recovering money from EZ Interlock was slim compared to amount that would be necessary to fund the litigation. We received most of our devices back from EZ Interlock. No discovery was conducted during the litigation.

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

ITEM 1A Risk Factors

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended September 30, 2018, we issued the following unregistered securities:

During the quarter ended September 30, 2018, we issued an aggregate of 1,237,500 shares of our common stock to 11 non-affiliated investors in exchange for $98,000. These shares were issued pursuant to stock purchase agreements and were issued with a standard restrictive legend. In connection with these share issuances we also issued warrants to acquire an aggregate of 515,000 shares of our common stock, with exercise prices ranging from $0.10 to $1.00 per share and that expire either three or four years from the date of grant. The issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, due to the fact the investors are sophisticated investors, known to our management and familiar with our operations.

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During the quarter ended September 30, 2018, we issued 137,349 shares of our common stock to The Doheny Group, LLC, under the anti-dilution provisions of certain royalty agreements we have with The Doheny Group, LLC. These shares were issued with a standard restrictive legend. As of September 30, 2018, we were obligated to issue an additional 511,102 shares of our common stock to Doheny Group, LLC, pursuant to the anti-dilution rights they have with us, but have not yet issued the shares. These shares will be issued with a standard restrictive legend. The issuances of the shares to The Doheny Group, LLC, were and will be exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, due to the fact the purchaser is a sophisticated investor, known to our management and familiar with our operations.

ITEM 3 Defaults Upon Senior Securities

There have been no events which are required to be reported under this Item.

ITEM 4 Mine Safety Disclosures

There have been no events which are required to be reported under this Item.

ITEM 5 Other Information

There have been no events which are required to be reported under this Item.

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ITEM 6 Exhibits

Item No.	Description
3.1 (1)	Certificate of Incorporation of Jam Run Acquisition Corporation dated June 28, 2013
3.2 (17)	Articles of Amendment to Articles of Incorporation to Jam Run Acquisition Corporation dated February 6, 2014 (changing corporate name to Blow & Drive Interlock Corporation)
3.3 (1)	Bylaws of Jam Run Acquisition Corporation (now Blow & Drive Interlock Corporation) dated June 2013
10.1 (2)	Agreement between Tiber Creek Corporation and Laurence Wainer dated January 25, 2014
10.2 (2)	Promissory Note between the Company and Laurence Wainer dated February 16, 2014
10.3 (3)	Lease Agreement by and between Marsel Plaza LLC and Laurence Wainer and Blow and Drive Interlock Corporation dated January 21, 2015
10.4 (4)	Exclusive Distributorship Agreement with Theenk Inc. dated August 21, 2015
10.5 (4)	Exclusive Distributorship Agreement with Jay Lopez dated July 24, 2015
10.6 (4)	Independent Contractor Agreement with Laurence Wainer dated September 11, 2015
10.7 (5)	Exclusive Distributorship Agreement with Stephen Ferraro dated November 9, 2015
10.4 (6)	Supply Agreement by and between BDI Manufacturing, Inc., an Arizona corporation, and C4 Development Ltd. dated June 29, 2015
10.5 (7)	Securities Purchase Agreement with David Stuart Petlak entered into on November 19, 2015
10.6 (7)	Convertible Promissory Note issued to David Stuart Petlak dated November 19, 2015
10.7 (7)	Common Stock Warrant issued to David Stuart Petlak dated November 19, 2015
10.8 (8)	Exclusive Distributorship Agreement with dba Blow & Drive Houston dated January 11, 2016
10.9 (9)	Secured Promissory Note and Agreement with Ira Silver dated January 20, 2016
10.10 (9)	Secured Promissory Note and Agreement with Chaim K. Wainer dated October 29, 2015
10.11 (10)	Securities Purchase Agreement with Dr. Oren Azulay dated March 30, 2016
10.12 (10)	Common Stock Purchase Agreement with Gustavo Arceo dated April 2016
10.13 (10)	Common Stock Purchase Agreement with LGL LLC dated May 6, 2016
10.14 (11)	Loan and Security Agreement with Doheny Group, LLC dated September 30, 2016
10.15 (11)	Phase 1 Loan Agreement with Doheny Group, LLC dated September 30, 2016
10.16 (11)	Royalty Agreement with Doheny Group, LLC dated September 30, 2016
10.17 (11)	Common Stock Purchase Agreement with Doheny Group, LLC dated September 30, 2016

52

10.18 (11)	Agreement with Abraham Summers and Gnossis International, LLC dated November 15, 2016
10.19 (12)	Termination of Services Agreement by and between Blow & Drive Interlock Corporation, Abraham Summers and Gnosiis International, LLC dated June 19, 2017
10.20 (13)	Amendment No. 1 to Debt Conversion and Series A Preferred Stock Purchase Agreement dated May 17, 2017
10.21 (13)	Amendment No. 1 to Loan and Security Agreement with Doheny Group, LLC dated June 3, 2017
10.22 (13)	Amendment No. 1 to Royalty Agreement with Doheny Group, LLC dated June 3, 2017
10.23 (14)	Form of Securities Purchase Agreement
10.24 (14)	Settlement Agreement by and between Blow & Drive Interlock Corporation and J C Lopez/BDI Interlock, LLC dated January 21, 2018 (memorializing oral agreement between the parties dated March 31, 2018)
10.25 (15)	Agreement to Purchase Common and Preferred Stock dated December 31, 2018
10.26 (16)	Debt Conversion and Series A Preferred Stock Purchase Agreement by and between Blow & Drive Interlock Corporation and Laurence Wainer dated March 7, 2017
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer (filed herewith).
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Accounting Officer (filed herewith).
32.1	Section 1350 Certification of Chief Executive Officer (filed herewith).
32.2	Section 1350 Certification of Chief Accounting Officer (filed herewith).
101.INS **	XBRL Instance Document
101.SCH **	XBRL Taxonomy Extension Schema Document
101.CAL **	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **	XBRL Taxonomy Extension Label Linkbase Document
101.PRE **	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

53

(1)	Incorporated by reference from our Registration Statement on Form 10, filed with the Commission on September 30, 2013.
(2)	Incorporated by reference from our Registration Statement on Form S-1, filed with the Commission on July 24, 2014.
(3)	Incorporated by reference from our Annual Report on Form 10-K, filed with the Commission on March 30, 2015.
(4)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on September 11, 2015.
(5)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on November 12, 2015.
(6)	Incorporated by reference from our Quarterly Report on Form 10-Q, filed with the Commission on August 13, 2015.
(7)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on December 2, 2015.
(8)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on February 22, 2016.
(9)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on March 17, 2016.
(10)	Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on August 22, 2016.
(11)	Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on November 21, 2016.
(12)	Incorporated by reference from our Current Report on Form 10-Q filed with the Commission on July 3, 2017.
(13)	Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on August 21, 2017.
(14)	Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on February 9, 2018.
(15)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on January 11, 2019.
(16)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on March 15, 2017
(17)	Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on June 27, 2019

54

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Blow & Drive Interlock Corporation
Dated: July 5, 2019		/s/ David Haridim
	By:	David Haridim
		President (Principal Executive Officer)

55

EX-31.1

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

I, David Haridim, certify that:

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

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

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

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

Dated: July 5, 2019
		/s/ David Haridim
	By:	David Haridim
		President

EX-31.2

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

I, David Haridim, certify that:

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

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

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

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

Dated: July 5, 2019
		/s/ David Haridim
	By:	David Haridim
		Chief Financial Officer and Chief Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Blow & Drive Interlock Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2018, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, David Haridim, President of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 5, 2019
		/s/ David Haridim
	By:	David Haridim
		President

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

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Blow & Drive Interlock Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2018, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, David Haridim, Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 5, 2019
		/s/ David Haridim
	By:	David Haridim
		Chief Financial Officer and Chief Accounting Officer

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

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Jul. 01, 2019
Document And Entity Information
Entity Registrant Name	Blow & Drive Interlock Corp
Entity Central Index Key	0001586495
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		31,350,683
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current Assets
Cash	$ 42,124	$ 31,874
Accounts receivable, net of allowance for doubtful accounts of $0 and $0 at September 30, 2018 and December 31, 2017, respectively	5,355	28,916
Prepaid Expenses	2,648	2,655
Total current assets	50,127	63,445
Deposits	5,131	5,131
Total assets	55,258	68,576
Current Liabilities
Accounts payable		39,695
Accrued expenses	20,547	15,685
Accrued royalty payable	254,711	179,993
Accrued interest	135,233	35,460
Income taxes payable	5,930	5,930
Deferred revenue	115,551	184,378
Derivative liability	18,287	12,302
Notes payable, net of debt discount of $7,548 and $18,729 at September 30, 2018 and December 31, 2017, respectively	69,134	60,006
Notes payable - related party	113,750	45,328
Convertible notes payable, net of debt discount of $5,124 and $0 at September 30, 2018 and December 31, 2017, respectively	2,376	6,972
Total current liabilities	735,519	585,749
Non-current Liabilities
Notes payable, net of debt discount of $8,812 and $14,473 at September 30, 2018 and December 31, 2017, respectively	16,182	21,274
Notes payable - related party	1,251,250	839,306
Convertible notes payable, net of debt discount of $7,684 and $2,011 at September 30, 2018 and December 31, 2017, respectively	12,316	3,517
Total non-current liabilities	1,279,748	864,097
Total Liabilities	2,015,267	1,449,846
Stockholders' Deficit
Preferred stock, par value $0.001, 20,000,000 shares authorized, 1,000,000 and 1,000,000 shares issued or issuable and outstanding as of September 30, 2018 and December 31, 2017, respectively	1,000	1,000
Common stock, par value $0.0001, 100,000,000 shares authorized, 31,611,785 and 26,223,834 shares issued or issuable and outstanding as of September 30, 2018 and December 31, 2017, respectively	3,161	2,622
Additional paid-in capital	3,485,203	2,911,753
Accumulated deficit	(5,449,373)	(4,296,645)
Total stockholders' deficit	(1,960,009)	(1,381,270)
Total liabilities and stockholders' equity (deficit)	$ 55,258	$ 68,576

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Allowance for doubtful accounts, current	$ 0	$ 0
Notes payable, debt discount current	7,548	18,729
Convertible notes payable, debt discount current	5,124	0
Notes payable, debt discount noncurrent	8,812	14,473
Convertible notes payable, debt discount noncurrent	$ 7,684	$ 2,011
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	1,000,000	1,000,000
Preferred stock, shares outstanding	1,000,000	1,000,000
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	31,611,785	26,223,834
Common stock, shares outstanding	31,611,785	26,223,834

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Total revenues	$ 241,658	$ 479,415	$ 724,154	$ 960,926
Total cost of revenue	18,724	58,817	95,405	119,623
Gross profit	222,934	420,598	628,749	841,303
Operating expenses
Payroll	240,499	272,900	706,648	457,288
Professional fees	26,175	16,603	114,230	93,505
General and administrative	170,504	269,039	639,598	579,172
Depreciation		90,512		234,654
Total operating expenses	437,178	649,054	1,460,476	1,364,619
Loss from operations	(214,244)	(228,456)	(831,727)	(523,316)
Other income (expense)
Interest expense, net	(119,028)	(145,740)	(329,586)	(440,538)
Change in fair value of derivative liability	5,093	(6,474)	9,385	11,018
Gain (loss) on extinguishment of debt				(305,000)
Total other income (expenses)	(113,935)	(152,214)	(320,201)	(734,520)
Loss before provision for income taxes	(328,179)	(380,670)	(1,151,928)	(1,257,836)
Provision for income taxes			800	1,600
Net loss	$ (328,179)	$ (380,760)	$ (1,152,728)	$ (1,259,436)
Basic and Diluted Loss Per Common Share	$ (0.01)	$ (0.02)	$ (0.04)	$ (0.06)
Basic and Diluted Weighted-Average Common Shares Outstanding	31,205,429	22,856,861	29,152,045	21,922,340
Monitoring Revenues [Member]
Total revenues	$ 221,418	$ 394,139	$ 664,649	$ 674,197
Total cost of revenue	18,724	57,817	95,405	111,884
Distributorship Revenues [Member]
Total revenues	20,240	85,286	59,505	286,729
Total cost of revenue		$ 1,000		$ 7,739

XML

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($)	Series A Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Beginning Balance at Dec. 31, 2016		$ 1,958	$ 1,594,721	$ (1,587,330)	$ 9,349
Beginning Balance, shares at Dec. 31, 2016		19,575,605
Shares issued for services		$ 3	13,910	13,913	13,913
Shares issued for services, shares		27,180
Warrants issued for services			278	278
Shares issued for cash		$ 374	652,725		653,099
Shares issued for cash, shares		3,736,894
Shares issued related to debt		$ 19	434,700		435,719
Shares issued related to debt, shares		195,400
Shares issued related to anti-dilution		$ 52	(52)
Shares issued related to anti-dilution, shares		522,882
Net loss					(1,259,436)
Ending Balance at Sep. 30, 2017					(147,078)
Beginning Balance at Dec. 31, 2016		$ 1,958	1,594,721	(1,587,330)	9,349
Beginning Balance, shares at Dec. 31, 2016		19,575,605
Shares issued for services		$ 3	13,910		13,913
Shares issued for services, shares		27,180
Warrants issued for services			278		278
Shares issued for cash		$ 569	848,468		849,037
Shares issued for cash, shares		5,686,656
Shares issued related to debt	$ 1,000	$ 18	454,450		455,468
Shares issued related to debt, shares	1,000,000	195,400
Shares issued related to anti-dilution		$ 74	(74)
Shares issued related to anti-dilution, shares		739,253
Other
Other, shares		(260)
Net loss				(2,709,315)	(2,709,315)
Ending Balance at Dec. 31, 2017	$ 1,000	$ 2,622	2,911,753	(4,296,645)	(1,381,270)
Ending Balance, shares at Dec. 31, 2017	1,000,000	26,223,834
Shares issued for services		$ 48	110,153		110,201
Shares issued for services, shares		476,000
Shares issued for cash		$ 434	458,271		458,705
Shares issued for cash, shares		4,340,883
Shares issued related to anti-dilution		$ 54	(54)
Shares issued related to anti-dilution, shares		538,256
Conversion of debt to common stock		$ 3	5,080		5,083
Conversion of debt to common stock, shares		32,812
Net loss				(1,152,728)	(1,152,728)
Ending Balance at Sep. 30, 2018	$ 1,000	$ 3,161	$ 3,485,203	$ (5,449,373)	$ (1,960,009)
Ending Balance, shares at Sep. 30, 2018	1,000,000	31,611,785

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (328,179)	$ (380,760)	$ (1,152,728)	$ (1,259,436)	$ (2,709,315)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		90,512		234,654
Loss on fixed assets disposals				12,989
Shares issued for services			110,200	14,188
Allowance for doubtful accounts			(26,541)	5,412
Loss on extinguishments of debt				305,000		$ (116,541)
Debt converted to common shares			5,083
Amortization of debt discount			27,704	275,465
Change in fair value of derivative liability		6,474	(9,385)	(11,019)
Changes in operating assets and liabilities:
Accounts receivable			50,102	6,760
Prepaid expenses			6	792
Deposits				1,123
Accounts payable			(39,695)	74,541
Accrued expenses			4,863	168,273
Accrued interest			99,773	30,968
Deferred revenue			(68,827)	(64,274)
Accrued royalties payable			74,718	25,136
Net cash used in operating activities			(924,727)	(179,428)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment				(817,026)
Deposits on units				250,000
Net cash used in investing activities				(567,026)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuances of notes payable			21,600
Principal payments of notes payable			(34,405)	(46,037)
Proceeds from issuance of convertible notes payable			20,000
Principal payments of convertible notes payable			(5,000)
Proceeds from issuances of related party notes payable			600,127	195,400
Principal payments of related party note payable			(126,050)	(87,947)
Proceeds from issuance of common stock			458,705	653,099
Net cash provided by financing activities			934,977	714,515
NET INCREASE (DECREASE) IN CASH			10,250	(31,939)
CASH - beginning of period			31,874	116,309	116,309
CASH - end of period	$ 42,124	$ 84,570	42,124	84,570	$ 31,874	$ 116,309
ADDITIONAL CASH FLOW INFORMATION
Interest paid			91,634	134,105
Income taxes paid
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock and warrants issued for services			110,200	14,188
Preferred stock issued for debt reduction and services				$ 350,000

XML

Organization and Nature of Business

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Business

Note 1 - Organization and Nature of Business

Blow & Drive Interlock (“the Company”) was incorporated on July 2, 2013 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company markets and rents alcohol ignition interlock devices to DUI/DWI offenders as part of their mandatory court or motor vehicle department programs. The Company has approval for its device in the following states: California, Colorado, Kansas, New York, Tennessee, Arizona, Oregon, Kentucky, Oklahoma, Pennsylvania, and Texas.

In 2015, the Company formed BDI Manufacturing, Inc., an Arizona corporation which is a 100% wholly owned subsidiary of Blow & Drive Interlock Corporation. The Company markets, installs and monitors a breath alcohol ignition interlock device (BAIID) called the BDI-747/1, which is a mechanism that is installed on the steering column of an automobile and into which a driver exhales. The device in turn provides a blood-alcohol concentration analysis. If the driver’s blood-alcohol content is higher than a certain pre-programmed limit, the device prevents the ignition from engaging and the automobile from starting. These devices are often required for use by DUI or DWI (“driving under the influence” or “driving while intoxicated”) offenders as part of a mandatory court or motor vehicle department program.

The Company licenses the rights to third party distributors to promote the BDI-747/1 and provide services related to the device. The distributorships are for specific geographical areas (either entire states or certain counties within states). The Company currently has entered into six distributorship agreements. Under the distribution agreements the Company typically receives a onetime fee, and then is entitled to receive a per unit registration fee and a per unit monthly fee for each BDI-747/1 unit the distributor has in inventory or on the road beginning thirty (30) days after the distributor receives the unit.

On December 31, 2018, Laurence Wainer, CEO of the Company, and The Doheny Group, a major note holder of the Company, reached an agreement in which Laurence Wainer sold 8,924,000 shares of common stock and 1,000,000 shares of preferred stock for a total of $30,000. Upon completion of the sale, David Haridim, managing member of The Doheny Group, assumed the position of CEO of Blow and Drive.

XML

Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company.

Consolidation

The accompanying consolidated financial statements include the results of operations of BDI Manufacturing (the Subsidiary). All material intercompany accounts and transactions between the Company and the Subsidiary have been eliminated in consolidation.

Going Concern

The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of September 30, 2018, the Company had an accumulated deficit of $5,449,373. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company will continue to raise funds through the sale of its equity securities or issuance of notes payable to obtain additional operating capital. The Company is dependent upon its ability to, and will continue to attempt to, secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern.

Based on the Company’s current rate of cash outflows, cash on hand and proceeds from the prior sale of equity securities and issuance of notes payable, management believes that its current cash will not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Company’s plans with respect to its liquidity issues include, but are not limited to, the following:

1)	Continue to issue restricted stock for compensation due to consultants and for its legacy accounts payable in lieu of cash payments; and
2)	Seek additional capital to continue its operations as it rolls out its current products. The Company is currently evaluating additional debt or equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction or consummate a transaction at favorable pricing.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Restatements

The Company has restated its September 30, 2017 financial statements. The original September 30, 2017 financial statements erroneously recognized the entire upfront fees from two of its independent distributors in revenue at the time the Company delivered the exclusive license to the distributors rather than over the term of the agreements (5 years). To correct that error, the Company has shown the portion of the upfront fees attributable to that period only.

Reclassifications

Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue when earned and related costs of sales and expenses when incurred. The Company recognizes revenue in accordance with FASB ASC Topic 605-10-S99, Revenue Recognition, Overall, SEC Materials (“Section 605-10-S74”). Section 605-10-S99 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. Cost of revenue consists of the cost of the purchased goods and labor related to the corresponding sales transaction. When a right of return exists, the Company defers revenues until the right of return expires. The Company recognizes revenue from services at the time the services are completed. Monthly per unit fee revenue is earned and recognized over the term of the contract as support services are provided. Revenues from territory exclusivity are earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price has been determined and collectability has been reasonably assured.

Deferred revenue

Deferred revenue consists of customer orders paid in advance of the delivery of the order. Deferred revenue is classified as short-term as the typical order ships within approximately three weeks of placing the order. Deferred revenue is recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met.

Advertising and Marketing Costs

Advertising and marketing costs are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $81,652 and $139,811 for the nine months ended September 30, 2018 and 2017, respectively

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of September 30, 2018 and December 31, 2017 is adequate, but actual write-offs could exceed the recorded allowance.

Royalty Accrual

The Company entered into royalty agreement to be paid out in perpetuity based on number of units sold for specified product model in years 2018, 2017 and 2016 in connection with notes payable as discussed in Note 12. These estimates were performed at the inception for the notes to reflect the associated debt discount. The Company accruals royalties and is reduced by payments.

Derivative Liability

The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability.

Convertible Debt and Warrants Issued with Convertible Debt

Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options and ASC 740, Beneficial Conversion Features. The Company records a beneficial conversion feature (“BCF”) when convertible debt is issued with conversion features at fixed or adjustable rates that are below market value when issued. If, however, the conversion feature is dependent upon a condition being met or the occurrence of a specific event, the BCF will be recorded when the related contingency is met or occurs. The BCF for the convertible instrument is recorded as a reduction, or discount, to the carrying amount of the convertible instrument equal to the fair value of the conversion feature. The discount is then amortized to interest over the life of the underlying debt using the effective interest method.

The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation, except that the contractual life of the warrant is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense.

For modifications of convertible debt, the Company records a modification that changes the fair value of an embedded conversion feature, including a BCF, as a debt discount which is then amortized to interest expense over the remaining life of the debt. If modification is considered substantial (i.e. greater than 10% of the carrying value of the debt), an extinguishment of debt is deemed to have occurred, resulting in the recognition of an extinguishment gain or loss.

Fair Value of Financial Instruments

The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10:

	Fair Value Measurements Using
	Level 1		Level 2			Level 3
Balance December 31, 2017	$	-	$	12,302		$	-
Additions to fair value of derivative liability		-		15,370			-
Change in fair value of derivative liability		-		(9385	)		-
Balance September 30, 2018 (unaudited)	$	-	$	18,287		$	-

Net Income (Loss) Per Share

Basic earnings per share is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive common share equivalents outstanding during the period.

Stock Based Compensation

The Company recognizes stock-based compensation in accordance with FASB ASC Topic 718 Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an employee stock purchase plan based on the estimated fair values.

For non-employee stock-based compensation, the Company applies FASB ASC Topic 505 Equity-Based Payments to Non-Employees, which requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with FASB ASC Topic 718.

Related Parties

Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company.

Concentrations

All of the Company’s ignition interlock devices are purchased from one supplier in China. The loss of this supplier could have a material impact on the Company’s ability to timely obtain additional units.

For the nine months ended September 30, 2018, one distributor, licensed in four states, makes up approximately 89% percent of all revenues from distributors at September 30, 2018. The loss of this distributer would have a material impact on the Company’s revenues. Per an agreement dated January 21, 2018 that memorialized a September 30, 2017 oral agreement, the Company and its largest distributor cancelled their distributorship agreement dated September 5, 2015. See Note 18 below.

Income Taxes

The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with ASC Topic 740, “Accounting for Income Taxes”. ASC 740-10-25 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Derivative Liabilities

The Company assessed the classification of its derivative financial instruments as of March 31, 2018, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as defined.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”.

ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability.

Recently Issued Accounting Pronouncements

In March 2018 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-05, Income Taxes (Topic 740). The Tax Cut and Jobs Act of 2017 changes existing tax law and includes numerous provisions that will affect businesses. This guidance addresses the recognition of taxes payable or refundable for the current year and the recognition of deferred tax liabilities and deferred tax assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. The Company does not believe that this guidance will have an impact as the Company has been in a loss position and has not recognized federal taxes payable or refundable or deferred tax liabilities or deferred tax assets.

In November 2017, the FASB issued ASU No. 2017-14, Income Statement-Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). The ASU modified Topic 220 such that an operating-differential subsidy must be set forth as a separate line item in the statement of comprehensive income either under a revenue caption presented separately from revenue from contracts with customers accounted for under ASC Topic 606 or as credit in the costs and expenses section. The ASU essentially deleted Topic 605 and noted that it was superseded by Topic 606. The ASU modified Topic 606 for vaccine manufacturers to recognize revenue when vaccines are placed into Federal Governmental stockpile programs because control of the enumerated vaccines will have been transferred to the customer and the criteria to recognize revenue in a bill-and-hold arrangement under ASC Topic 606 will have been met. The Company is currently evaluating the impact of adopting this guidance.

In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition, Revenue from Contracts with Customers, Leases. The ASU adds SEC paragraphs to the new revenue and leases sections of the Accounting Standards Codification (ASC or Codification) on the announcement the SEC Observer made at the 20 July 2017 EITF meeting. The SEC Observer said that the SEC staff would not object if entities that are considered public business entities only because their financial statements or financial information is required to be included in another entity’s SEC filing use the effective dates for private companies when they adopt ASC 606, Revenue from Contracts with Customers, and ASC 842, Leases. This would include entities whose financial statements are included in another entity’s SEC filing because they are significant acquirees under Rule 3-05 of Regulation S-X, significant equity method investees under Rule 3-09 of Regulation S-X and equity method investees whose summarized financial information is included in a registrant’s financial statement notes under Rule 4-08(g) of Regulation S-X. The Company is currently evaluating the impact of adopting this guidance.

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share; Distinguishing Liabilities from Equity; Derivatives and Hedging; Accounting for Certain Financial Instruments with Down Round Features; Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. An entity will no longer have to consider “down round” features (i.e., a provision in an equity-linked financial instrument or an embedded feature that reduces the exercise price if the entity sells stock for a lower price or issues an equity-linked instrument with a lower exercise price) when determining whether certain equity-linked financial instruments or embedded features are indexed to its own stock. An entity that presents earnings per share (EPS) under ASC 260 will recognize the effect of a down round feature in a freestanding equity-classified financial instrument only when it is triggered. The effect of triggering such a feature will be recognized as a dividend and a reduction to income available to common shareholders in basic EPS. The new guidance will require new disclosures for financial instruments with down round features and other terms that change conversion or exercise prices. The ASU also replaces today’s indefinite deferral of the guidance in ASC 480-10 for certain mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests with a scope exception. This change does not require any transition guidance because it does not have an accounting effect. The Company is currently evaluating the impact of adopting this guidance.

In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes will be recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The effect of the adoption of the standard will depend on the nature and amount of any future transactions.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows; Classification of Certain Cash Receipts and Cash Payments. The new standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The eight issues are: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned insurance policies; distribution received from equity method investees; beneficial interests in securitization transactions; separately identifiable cash flows and application of the predominance principle. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within fiscal periods beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers. The new standard clarifies the implementation guidance on principal versus agent considerations in Topic 606, Revenue from Contracts with Customers. Topic 606 addresses that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. When an entity is a principal (that is, if it controls the specific good or service before that good or service is transferred to a customer) and satisfies a performance obligation, the entity recognizes revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specific good or service transferred to the customer. When an entity is an agent and satisfies a performance obligation, the entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specific good or service to be provided by the other party. The new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the impact of adopting this guidance.

In February 2016, the FASB issued ASU No. 2016-2, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for leases for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of adopting this guidance.

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Restatements

9 Months Ended

Sep. 30, 2018

Accounting Changes and Error Corrections [Abstract]

Restatements

Note 3 - Restatements

Below are the restated September 30, 2017 financial statements. The original June 30, 2018 financial statements erroneously recognized the entire upfront fees from two of its independent distributors in revenue at the time the Company delivered the exclusive license to the distributors rather than over the term of the agreements (5 years). To correct that error, the Company has shown the portion of the upfront fees attributable to that period only.

Blow & Drive Interlock Corporation

Consolidated Balance Sheet

	September 30, 2017 as filed			adjustment			revised September 30, 2017
	(unaudited)			(unaudited)			(unaudited)
Assets
Current Assets
Cash	$	84,370					$	84,370
Accounts receivable, net		39,069						39,069
Prepaid Expenses		1,569						1,569
Inventories		10,650						10,650
Total Current Assets		135,658			-			135,658
Other Assets
Deposits		5,131						5,131
Furniture and equipment		925,728						925,728
Total Assets	$	1,066,517		$	-		$	1,066,517
Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts payable	$	102,791					$	102,791
Accrued expenses		235,398						235,398
Accrued royalty payable		145,317						145,317
Accrued interest		41,078						41,078
Income taxes payable		5,929						5,929
Deferred revenue		91,057			7,000			98,057
Derivative liability		62,537						62,537
Notes payable, net of debt discount of $22,431		154,069						154,069
Notes payable - related party, current portion		-						-
Convertible notes payable, net of debt discount of $3,115		54,385						54,385
Royalty notes payable, net of debt discount of $29,393		892						892
Total Current Liabilities		893,453			7,000			900,453
Long term liabilities
Notes payable, net of debt discount of $46,750		148,250						148,250
Notes payable - related party		-						-
Royalty notes payable, net of debt discount of $353,894		163,106						163,106
Accrued royalties payable		1,786						1,786
Total Liabilities		1,206,595			7,000			1,213,595
Stockholders’ Equity (Deficit)
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000,000 issued		1,000						1,000
Common stock, $0.0001 par value, 100,000,000 shares authorized, 24,057,961 outstanding		2,406						2,406
Additional paid-in capital		2,696,281						2,696,281
Accumulated deficit		(2,839,765	)		(7,000	)		(2,846,765	)
Total Stockholder’s Equity (Deficit)		(140,078	)		(7,000	)		(147,078	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	1,066,517		$	-		$	1,066,517

Blow & Drive Interlock Corporation

Consolidated Statements of Operations

(unaudited)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2017 as filed			adjustment		revised 2017			2017 as filed			adjustment		revised 2017
Monitoring revenue	$	394,139				$	394,139		$	674,197				$	674,197
Distributorship revenue		42,276			43,000		85,276			237,729			49,000		286,729
Total revenue		436,415			43,000		479,415			911,926			49,000		960,926
Monitoring cost of revenue		57,817					57,817			111,884					111,884
Distributorship cost of revenue		1,000					1,000			7,739					7,739
Total cost of revenue		58,817			-		58,817			119,623			-		119,623
Gross profit		377,598			43,000		420,598			792,303			49,000		841,303
Operating expenses
Payroll		272,900					272,900			457,288					457,288
Professional fees		16,603					16,603			93,505					93,505
General and administrative expenses		269,039					269,039			579,172					579,172
Depreciation		90,512					90,512			234,654					234,654
Total operating expenses		649,054			-		649,054			1,364,619			-		1,364,619
Loss from operations		(271,456	)		43,000		(228,456	)		(572,316	)		49,000		(523,316	)
Other income (expense)
Interest expense		(145,740	)				(145,740	)		(440,538	)				(440,538	)
Change in fair value of derivative liability		(6,474	)				(6,474	)		11,018					11,018
Loss on extinguishment of debt		-					-			(305,000	)				(305,000	)
Total other income (expense)		(152,214	)		-		(152,214	)		(734,520	)		-		(734,520	)
Loss before provision for income taxes		(423,670	)		43,000		(380,670	)		(1,306,836	)		49,000		(1,257,836	)
Provision for income taxes		-					-			1,600					1,600
Net loss	$	(423,670	)	$	43,000	$	(380,670	)	$	(1,308,436	)	$	49,000	$	(1,259,436	)
Basic and diluted loss per common share	$	(0.02	)			$	(0.02	)	$	(0.06	)			$	(0.06	)
Weighted average number of common shares outstanding - basic and diluted		22,856,861					22,856,861			21,922,340					21,922,340

Blow & Drive Interlock Corporation

Consolidated Statement of Cash Flows

(unaudited)

	Nine Months Ended September 30,
	2017 as filed			adjustment			revised 2017
Cash flows from operating activities:
Net loss	$	(1,308,436	)	$	49,000		$	(1,259,436	)
Adjustments to reconcile from net loss to net cash used in operating activities
Depreciation and amortization		234,654						234,654
Loss on fixed assets disposals		12,989						12,989
Shares issued for services		14,188						14,188
Allowance for doubtful accounts		5,412						5,412
Loss on extinguishment of debt		305,000						305,000
Amortization of debt discount		275,465						275,465
Change in fair value of derivative liability		(11,019	)					(11,019	)
Changes in operating assets and liabilities
Accounts receivable		6,760						6,760
Prepaid expenses		792						792
Deposits		1,123						1,123
Accounts payable		74,541						74,541
Accrued expenses		193,409						193,409
Accrued interest		30,968						30,968
Deferred revenue		(15,274	)		(49,000	)		(64,274	)
Net cash used in operating activities		(179,428	)		-			(179,428	)
Cash flows from investing activities:
Purchase of property and equipment		(817,026	)					(817,026	)
Deposits on units		250,000						250,000
Net cash used in investing activities		(567,026	)		-			(567,026	)
Cash flows from financing activities:
Proceeds from notes payable		195,400						195,400
Repayments of notes payable		(14,268	)					(14,268	)
Repayments of royalty notes payable		(65,529	)					(65,529	)
Repayment of related party notes payable		(54,187	)					(54,187	)
Proceeds from issuance of common stock		653,099						653,099
Net cash provided by financing activities		714,515			-			714,515
Net increase (decrease) in cash		(31,939	)		-			(31,939	)
Cash, beginning of period		116,309						116,309
Cash, end of period	$	84,370		$	-		$	84,370
Supplemental disclosure of cash information:
Cash paid during the period for:
Interest	$	134,105					$	134,105
Income taxes	$	-					$	-
Supplemental disclosure of non-cash investing and financing activities
Common stock and warrants issued for services	$	14,188					$	14,188
Establishment of debt discount for royalty notes	$	-					$	-
Preferred stock issued for debt reduction and services	$	350,000					$	350,000

Blow & Drive Interlock Corporation

Consolidated Statement of Shareholders’ Equity (Deficit)

(unaudited)

	Preferred Stock				Common Stock				Additional Paid-in			Accumulated						revised Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Capital			Deficit			adjustment			Deficit			(Deficit)
Balance December 31, 2016		-	$	-		19,575,605	$	1,958	$	1,594,721		$	(1,531,330	)	$	(56,000	)	$	(1,587,330	)	$	9,349
Shares issued for services		-		-		27,180		3		13,910												13,913
Warrants issued for services										278												278
Shares issued related to debt		1,000,000		1,000		195,400		19		434,700												435,719
Shares issued for cash		-		-		3,736,894		374		652,725												653,099
Shares issued related to anti-dilution		-		-		522,882		52		(52	)											-
Net loss		-		-		-		-		-			(1,308,436	)		49,000			(1,259,436	)		(1,259,436	)
Balance September 30, 2017		1,000,000	$	1,000		24,057,961	$	2,406	$	2,696,282		$	(2,839,766	)	$	(7,000	)	$	(2,846,766	)	$	(147,078	)

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Segment Reporting

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment Reporting

Note 4 – Segment Reporting

The Company has two reportable segments: (1) Monitoring and (2) Distributorships.

Monitoring fees on Company installed units

The Company rents units directly to customers and installs the units in the customer’s vehicles. The rental periods range from a few months to 2 years and include a combination of down payments made by the customer and monthly payments paid under the agreements with the Company. Revenue is recognized from these companies on the straight-line basis over the term of the agreement. Amounts collected in excess of those earned are classified as deferred revenue in the balance sheet, and amounts earned in excess of amounts collected are reflected in accounts receivable in the balance sheet at September 30, 2018 and December 31, 2017.

Distributorships

The Company enters into arrangements that include multiple deliverables, which typically consist of the sale of exclusive distributorship territory rights, startup supplies package, promotional material, three weeks of onsite training and ongoing monthly support services. The Company accounts for each material element within an arrangement with multiple deliverables as separate units of accounting. Revenue is allocated to each unit of accounting under the guidance of ASC Topic 605-25, Multiple-Element Revenue Arrangements, which provides criteria for separating consideration in multiple-deliverable arrangements by establishing a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third-party evidence is available. The Company is required to determine the best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis. The Company generally does not separately sell distributorships or training on a standalone basis. Therefore, the Company does not have VSOE for the selling price of these units nor is third party evidence available and thus management uses its best estimate of selling prices in their allocation of revenue to each deliverable in the multiple element arrangement.

The following table summarizes net sales and identifiable operating income by segment:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Segment gross profit (a):
Monitoring	$	202,694		$	336,322		$	569,244		$	562,313
Distributorships		20,240			84,276			59,505			278,990
Gross profit		222,934			420,598			628,749			841,303
Identifiable segment operating expenses (b):
Monitoring		-			86,543			-			143,955
Distributorships		-			3,552			-			89,642
		-			90,095			-			233,597
Identifiable segment operating income (c):
Monitoring		202,694			249,779			569,244			418,358
Distributorships		20,240			80,724			59,505			189,348
		222,934			330,503			628,749			607,706
Reconciliation of identifiable segment income to corporate income (d):
Payroll		240,499			272,900			706,648			457,288
Professional fees		26,175			16,603			114,230			93,505
General and administrative expenses		170,504			269,039			639,598			579,172
Depreciation		-			417			-			1,057
Interest expense		119,028			145,740			329,586			440,538
Change in fair value of derivative liability		(5,093	)		6,474			(9,385	)		(11,018	)
Loss on extinguishment of debt		-			-			-			305,000
Loss before provision for income taxes		(328,179	)		(380,670	)		(1,151,928	)		(1,257,836	)
Provision for income taxes		-			-			800			1,600
Net loss	$	(328,179	)	$	(380,670	)	$	(1,152,728	)	$	(1,259,436	)
Total net property, plant, and equipment assets
Monitoring							$	-		$	562,542
Distributorships								-			350,298
Corporate								-			12,889
							$	-		$	925,729

(a) Segment gross profit includes segment net sales less segment cost of sales

(b) Identifiable segment operating expenses consists of identifiable depreciation expense

(c) Identifiable segment operating incomes consists of segment gross profit less identifiable operating expense

(d) General corporate expense consists of all other non-identifiable expenses

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Deposits

9 Months Ended

Sep. 30, 2018

Deposit Assets Disclosure [Abstract]

Deposits

Note 5 – Deposits

Deposits consist of the following:

	September 30, 2018		December 31, 2017
Lease Deposits	$	5,131	$	5,131

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Accrued Expenses

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Accrued Expenses

Note 6 – Accrued Expenses

Accrued Expenses consist of the following:

	September 30, 2018		December 31, 2017
Accrued payroll and payroll taxes	$	6,141	$	6,141
Deferred rent		5,306		4,945
Other accrued expenses		9,100		5,000
Total	$	20,547	$	15,685

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Deferred Revenue

9 Months Ended

Sep. 30, 2018

Deferred Revenue Disclosure [Abstract]

Deferred Revenue

Note 7 - Deferred Revenue

The Company classifies income as deferred until the terms of the contract or time frame have been met within the Company’s revenue recognition policy. As of September 30, 2018 and December 31, 2017, deferred revenue consists of the following:

	September 30, 2018		December 31, 2017
Monitoring deferred revenues	$	115,551	$	177,878
Distributorship deferred revenues		-		6,500
Total	$	115,551	$	184,378

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Notes Payable

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Notes Payable

Note 8 – Notes Payable

Notes payable consist of the following:

	As of September 30, 2018									As of December 31, 2017
	Amount			Discount			Net Balance			Amount			Discount			Net Balance
January 2016 ($65,000) - 0% interest with payment of $937 per month for 4 months, $1,250 per month for 8 months, and $3,531 per month until fully paid.	$	940		$	-		$	940		$	4,482		$	(3,889	)	$	593
April 2016 ($50,000) - 18% interest at payment of $750 per month with unpaid balance due at March 31, 2018 including issuance of 50,000 common shares.		50,000			-			50,000			50,000			(7,292	)		42,708
September 2016 ($10,000) - 24% interest with outstanding balance with accrued interest due at October 31, 2018 with an option of accrued interest to be converted to common stock with 25% discount of trading price		10,000			-			10,000			10,000			-			10,000
December 2017 ($50,000) - 15% interest due in December 2020 including issuance of 100,000 shares of common stock with exercise price at $0.25 per share.		40,736			(16,360	)		24,376			50,000			(22,021	)		27,979
Total notes payable		101,676			(16,360	)		85,316			114,482			(33,202	)		81,280
Less: non-current portion		(24,994	)		8,812			(16,182	)		(35,747	)		14,473			(21,274	)
Notes payable, current portion	$	76,682		$	(7,548	)	$	69,134		$	78,735		$	(18,729	)	$	60,006

January 2016 - $65,000

On January 20, 2016, the Company entered into a non-interest bearing note payable and royalty agreement with a third party. Under the note, the Company borrowed $65,000 and began to repay the principal amount at a rate of approximately $937 per month with escalations to approximately $3,531 per month as of February 2017 until the note is paid in full. In addition, starting in February 2018, the Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. In connection with this note, the Company recorded a debt discount of $65,000 relating to the future royalty payments, to be amortized over the life of the note.

On September 30, 2016, the Company entered into Amendment No. 1 to Royalty note #1 in order to remove a security interest in the Company’s assets to secure repayment of the original note and amend the royalty provisions of the original note to be $1 for each Device on the road beginning in the 25th month after the date of the original note. In connection with this amendment, the Company issued 425,000 shares of restricted common stock. Pursuant to ASC 470 this amendment is a deemed extinguishment of the debt and the resulting revised debt is set up as a new note. In connection therewith, the Company recorded a loss on extinguishment of $116,541 during the year ended December 31, 2016.

Total interest expense was $0 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

April 2016 - $50,000

On March 30, 2016, the Company entered into a borrowing agreement with a third party. The note was for a principal balance of $50,000 and included 50,000 restricted common shares. The promissory note has a maturity date of June 30, 2018 and bears interest at 18% per annum. The purchaser did not sign the agreement nor deliver the proper consideration prior to March 31, 2016. The exchange of the $50,000 in cash consideration by the purchaser and the issuance of the 50,000 restricted common shares by the Company was made in conjunction with delivery of the signed purchase agreement and promissory note on April 5, 2016. The Company recorded a debt discount of $50,000 related to the relative fair value of the issued shares associated with the note to be amortized over the life of the note.

Total interest expense was $6,750 and $6,750 for the nine months ended September 30, 2018 and 2017, respectively.

September 2016 - $10,000

On September 23, 2016, the Company provided an agreement to a third party to obtain a $10,000 promissory note in exchange for 100,000 restricted common shares and $10,000 in cash. The promissory note had a maturity date of October 31, 2017 and bears interest at 24% per annum. On October 31, 2017, the note was amended to extend the maturity date to October 31, 2018. There are no other changes to the note. The Company recorded a debt discount of $10,000 related to the relative fair value of the issued shares associated with the note to be amortized over the life of the note.

Total interest expense was $1,800 and $1,800 for the nine months ended September 30, 2018 and 2017, respectively.

December 2017 - $50,000

On December 1, 2017, the Company provided an agreement to a third party to obtain a $50,000 promissory note in exchange for $50,000 in cash. The promissory note had a maturity date of December 1, 2020 and bears interest at 15% per annum. The note required total payments of $1,733 per month. The Company recorded a debt discount of $22,650 related to the value of the issued shares associated with the process of obtaining the note to be amortized over the life of the note.

Total interest expense was $5,111 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

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Notes Payable - Related Parties

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Notes Payable - Related Parties

Note 9 – Notes Payable – Related Parties

Notes payable to related parties consist of the following:

	As of September 30, 2018											As of December 31, 2017
	Amount			Discount		Replacement			Net Balance			Amount			Discount			Net Balance
January 2016 ($55,000) – Payment of $937 per month for 4 months, $1,250 per month 5 months, and $3,531 per month until fully paid	$	-		$	-				$	-		$	5,923		$	(6,289	)	$	(366	)
November 2017 ($900,000) - 60 months of payments of $25,000 per month with $15,000 in principal payment and $10,000 in interest payment, first payment due on December 1, 2017 and the final payment on November 1, 2022.		765,000			-		(765,000	)		-			885,000			-			885,000
February 2018 ($100,000) – Fee payment of $2,500 per month, principal due February 1, 2019.		100,000			-		(100,000	)		-			-			-			-
March 2018 ($500,000) – Fee payment of $12,500 per month first year, $12,000 per month second year, $11,500 per month third year, $11,000 per month fourth year, $105,00 per month fifth year, principal due March 1, 2020.		500,000			-		(500,000	)		-			-			-			-
August 2018 ($1,365,000) – Replaced November 2017 note ($765,000 balance at August 1, 2018), February 2018 note ($100,000) and March 2018 note ($500,000). Interest only payment of $20,000 per month first nine months, then payment of $53,500 per month of principal and interest for forty-eight months after which principal will be fully paid		-			-		1,365,000			1,365,000			-			-			-
Total related party notes payable		1,365,000			-		-			1,365,000			890,923			(6,289	)		884,634
Less: non-current portion		(1,115,000	)		-		(136,250	)		(1,251,250	)		(839,306	)		-			(839,306	)
Related party notes payable, current portion	$	250,000		$	-		(136,250	)	$	113,750		$	51,617		$	(6,289	)	$	45,328

January 2016 - $55,000

On March 29, 2016, the Company consummated a non-interest bearing note payable and royalty agreement with a relative of the CEO with terms almost identical to the note referenced above. Under the note, the Company borrowed $55,000 and began to repay the principal amount at a rate of approximately $937 per month with escalations to approximately $3,531 per month as of April 2017 until the note is paid in full. In addition, starting in February 2018, the Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. In connection with this note, the Company recorded a debt discount of $55,000 relating to the future royalty payments, to be amortized over the life of the note.

On September 30, 2016, the Company entered into Amendment No. 1 to Royalty note #2 to amend the royalty provisions of the original note to be $1 for each Device on the road beginning in the 25th month after the date of the Royalty note #2. In connection with this amendment, the Company issued 50,000 shares of restricted common stock and recorded an additional debt discount of $8,959. This amendment was accounted for as a debt modification pursuant to ASC 470.

Total interest expense was $0 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

November 2017 - $900,000

On November 1, 2017, the Company entered into an agreement with a related third party to exchange the September 2016 $36,100 note, the September 2016 $192,000 note, the October 2016 $24,960 note, the November 2016 $5,040 note, the November 2016 $50,000 note, the November 2016 $325,000 note, the January 2017 $50,400 note, the February 2017 $70,000 note, and the March 2017 $75,000 note for a new promissory note for $900,000. The new promissory note also included accrued interest payable and payment of Company expenses. The term of the loan is sixty months and payments are to be $25,000 per month with $15,000 in principal payment and $10,000 in interest payment. The first payment is to be on December 1, 2017 and the final payment on November 1, 2022. On August 1, 2018, the Company entered into an agreement with a related party to replace the balance ($765,000) on the note, the February 2018 note, and the March 2018 note with a new note for $1,365,000.

Total interest expense was $126,229 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

February 2018 - $100,000

On February 1, 2018, the Company entered into an agreement with a related third party to obtain a $100,000 promissory note in exchange for $100,000 cash. The note calls for a monthly fee of $2,500 and the principal is due February 1, 2019. On August 1, 2018, the Company entered into an agreement with a related party to replace the note, the March 2018 note, and the balance ($765,000) on the November 2017 note with a new note for $1,365,000.

Total interest expense was $15,000 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

March 2018 - $500,000

On March 1, 2018, the Company entered into an agreement with a related third party to obtain a $500,000 promissory note in exchange for $500,000 cash. The note calls for a monthly fee of $12,500 per month for the first year, $12,000 per month for the second year, $11,500 for the third year, $11,000 for the fourth year, and $10,500 for the fifth year, and the principal is due March 1, 2023. On August 1, 2018, the Company entered into an agreement with a related party to replace the note, the February 2018 note, and the balance ($765,000) on the November 2017 note with a new note for $1,365,000.

Total interest expense was $58,475 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

August 2018 - $1,365,000

On August 1, 2018, the Company entered into an agreement with a related third party to replace the balance ($765,000) on the November 2017 note, the February 2018 note ($100,000), and the March 2018 note ($500,000) with a new note for $1,365,000. The note calls for interest only payments of $20,000 per month for the first nine months, and then payments of $53,500 per month for principal and interest. After the forty-eight months, the principal will be paid in full.

Total interest expense was $78,448 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

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Convertible Notes Payable

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Convertible Notes Payable

Note 10 – Convertible Notes Payable

Convertible notes payable consists of the following:

	As of September 30, 2018									As of December 31, 2017
	Amount			Discount			Net Balance			Amount			Discount			Net Balance
August 2015 ($15,000) - 7.5% interest bearing convertible debenture due on August 7, 2017 with interest only payments and due upon maturity.	$	7,500		$	-		$	7,500		$	7,500		$	-		$	7,500
November 2017 ($5,000) - 10% interest bearing convertible debenture due on October 27, 2020 with interest only payments and due upon maturity.		-			-			-			5,000			(2,011	)		2,989
March 2018 ($20,000) – 10% interest bearing convertible debenture due on March 9, 2021, with interest paid in cash for the first six months, and either in cash or shares of common stock thereafter. Principal is due March 9, 2021, paid either in cash or common stock, at the Company’s discretion		20,000			(12,808	)		7,192			-			-			-
Total convertible notes payable		27,500			(12,808	)		14,692			12,500			(2,011	)		10,489
Less: non-current portion		(20,000	)		7,684			(12,316	)		(5,000	)		1,483			(3,517	)
Convertible notes payable, current portion	$	7,500		$	(5,124	)	$	2,376		$	7,500		$	(528	)	$	6,972

August 2015 - $15,000

On August 7, 2015, the Company entered into an agreement with a third party non-affiliate and issued a 7.5% interest bearing convertible debenture for $15,000 due on August 7, 2017, with conversion features commencing after 180 days following the date of the note. Payments of interest only were due monthly beginning September 2015. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading days prior to the conversion date. In connection with this Convertible note payable, the Company recorded a $5,770 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 9). On May 6, 2016 the note holder elected to convert $7,500 in principal into 30,000 shares of common stock. The note is currently in default.

In connection with the issuance of the August Convertible Note Payable, the Company issued a warrant on August 7, 2015 to purchase 30,000 shares of the Company’s common stock at a purchase price of $0.50 per share. The Black Scholes model was used in valuing the warrants in determining the relative fair value of the warrants issued in connection with the convertible note payable using the following inputs: Expected Term – 3 years, Expected Dividend Rate – 0%, Volatility – 100%, Risk Free Interest Rate -1.08%. The Company recorded an additional $4,873 discount on debt, related to the relative fair value of the warrants issued associated with the note to be amortized over the life of the note.

Total interest expense was $422 and $422 for the nine months ended September 30, 2018 and 2017, respectively.

November 2017 - $5,000

On November 1, 2017, the Company entered into an agreement with a non-affiliated shareholder and issued a 10% interest bearing convertible debenture for $5,000 due on October 27, 2020. Payments of interest only are due monthly beginning December 2017. The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. In connection with this Convertible Note Payable, the Company recorded a $5,000 discount on debt (the total discount was $6,825, of which $1,825 was expensed), related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value. In June 2018, the note and related accrued interest were converted to 32,812 shares of common stock.

In connection with the issuance of the November convertible note payable, the Company issued a warrant to purchase 10,000 shares of common stock at an exercise price of $1.00 per share. The warrant has an exercise period of four years from the date of issuance. The Black Scholes model was used in valuing the warrants in determining the relative fair value of the warrants issued in connection with the convertible note payable using the following inputs: Expected Term – 4 years, Expected Dividend Rate – 0%, Volatility – 373%, Risk Free Interest Rate – 2.37%. The Company recorded an additional $2,099 discount on debt, related to the relative fair value of the warrants issued associated with the note to be amortized over the life of the note.

Total interest expense was $250 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

March 2018 - $20,000

On March 9, 2018, the Company entered into an agreement with a non-affiliated shareholder and issued a 10% interest bearing convertible debenture for $20,000 due on March 9, 2021. Payments of interest is in cash for the first six months, thereafter, interest may be paid either in cash or common stock of the Company. The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. In connection with this Convertible Note Payable, the Company recorded a $20,000 discount on debt (the total discount was $47,768, of which $27,768 was expensed), related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value. As of September 30, 2018, this note has not been converted.

Total interest expense was $1,126 and $0 for the nine months ended September 30, 2018 and 2017, respectively.

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Derivative Liabilities

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liabilities

Note 11 – Derivative Liabilities

Derivative liabilities consisted of the following:

	September 30, 2018		December 31, 2017
August 2015 - $15,000 convertible debt	$	3,599	$	7,310
November 2017 - $5,000 convertible debt		-		4,992
March 2018 - $20,000 convertible debt		14,688		-
Total derivative liabilities	$	18,287	$	12,302

The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model.

August 2015 Convertible Debt - $15,000

In August 2015, the Company entered into a $15,000 convertible note with variable conversion pricing. The following inputs were used within the Black Sholes Model to determine the initial relative fair values of the $15,000 convertible note with expected term of 1.58 years, expected dividend rate of 0%, volatility of 100% and risk free interest rate 0.61%.

November 2017 Convertible Debt - $5,000

In November 2017, the Company entered into a $5,000 convertible note with variable conversion pricing. The following inputs were used within the Black Sholes Model to determine the initial relative fair values of the $5,000 convertible note with expected term of 3.00 years, expected dividend rate of 0%, volatility of 312% and risk free interest rate 2.37%. This note was paid in June 2018.

March 2018 Convertible Debt - $20,000

In March 2018, the Company entered into a $20,000 convertible note with variable conversion pricing. The following inputs were used within a binomial model to determine the initial relative fair values of the $20,000 convertible note with expected term of 2.44 years, expected dividend rate of 0%, volatility of 160% and risk free interest rate 2.49%.

The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability. The following table describes the Derivative liability as of December 31, 2017 and September 30, 2018.

	Balance							Balance
	at 12/31/17		Additions		Changes			at 09/30/18
August 2015 - $15,000 convertible debt	$	7,310	$	-	$	(3,711	)	$	3,599
November 2017 - $5,000 convertible debt		4,992				(4,992	)		-
March 2018 - $20,000 convertible debt		-		15,370		(682	)		14,688
Total	$	12,302	$	15,370	$	(9,385	)	$	18,287

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Accrued Royalties Payable

9 Months Ended

Sep. 30, 2018

Accrued Royalties Payable

Accrued Royalties Payable

Note 12 – Accrued Royalties Payable

The Company has estimated the royalties to be paid out in perpetuity under royalty agreements. The Company entered into royalty agreement as follows:

● January 2016 Royalty Agreement – Under the note payable and royalty agreements of $65,000, the Company is required to pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity.

● March 2016 Royalty Agreement – On March 29, 2016, the Company entered into a royalty agreement with a relative of the CEO together with note payable of $55,000. Under the royalty agreement and starting February 2018, the Company is required to pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity.

● September and November 2016 Royalty Agreements – The Company entered into royalty agreements on September 30, 2016 and November 4, 2016 with a related party in relation to notes payable of $192,000 and $325,000, respectively. Under the royalty agreements, the Company is required to pay a royalty fee of from $1 to $2 per month for every ignition interlock devise that the Company has on the road in customers’ vehicles, the amount depending on how many devices are installed.

● November 2017 Royalty Agreement – The Company entered into a royalty agreement with a related party on November 1, 2017 in relation to a note payable of $900,000. This note replaced the September and November 2016 Royalty Agreements. Under the royalty agreement, the Company is required to pay a royalty fee of from $1.50 to $3.00 per month for every ignition interlock devise that the Company has on the road in customers’ vehicles, the amount depending on how many devices are installed.

Based on the royalty agreement, the Company had the following royalty accruals:

	September 30, 2018			December 31, 2017
January 2016 royalty agreement	$	113,941		$	86,230
March 2016 royalty agreement		126,318			88,010
September and November 2016 royalty agreements		(5,203	)		5,753
November 2017 royalty agreement		8,530			-
August 2018 royalty agreement		11,125			-
Total accrued royalties	$	254,711		$	179,993

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Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Equity

Note 13 – Stockholders’ Equity

Preferred Stock

The Company’s articles of incorporation authorize the Company to issue up to 20,000,000 preferred shares of $0.001 par value.

Series A Preferred Stock

The Company has been authorized to issue 1,000,000 shares of Series A Preferred Stock. The Series A shares have the following preferences: no dividend rights; no liquidation preference over the Company’s common stock; no conversion rights; no redemption rights; no call rights by the Company; each share of Series A Preferred stock will have one hundred (100) votes on all matters validly brought to the Company’s common stockholders.

During the three months ended March 31, 2017, the Company entered into a material definitive agreement to issue 1,000,000 shares of series A preferred stock to an officer and director of the Company with a preliminary estimated value of $350,000. As of September 30, 2018, the total number of preferred shares issued or issuable was 1,000,000.

Common Stock

The Company has authorized 100,000,000 shares of $.0001. Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company’s ability to pay dividends on its common stock, subject to the requirements of the Delaware Revised Statutes. The Company has not declared any dividends since incorporation.

During the nine months ended September 30, 2018, the Company issued 476,000 shares of its common stock for services valued at $110,200. In addition , the Company and sold 4,340,883 shares of its common stock to several investors for an aggregate purchase price of $458,705. In addition, the Company issued 538,256 common shares in accordance with the anti-dilution provisions of Royalty notes #3 and #4. In addition, the Company issued 32,812 common shares in the conversion of $5,083 of notes payable. The total number of shares issued or issuable as of September 30, 2018 was 31,611,785.

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Warrants

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Warrants

Note 14 – Warrants

The Company issued warrants in individual sales and in connection with common stock purchase agreements. The warrants have expiration dates ranging from three to four years from the date of grant and exercise prices ranging from $0.10 to $1.00.

A summary of warrant activity for the periods presented is as follows:

			Weighted Average
	Warrants for		Weighted Average		Remaining		Aggregate
	Common Shares		Exercise Price		Contractual Term		Intrinsic Value
Outstanding as of December 31, 2016		160,000	$	0.53		1.97		-
Granted		4,697,176		0.51		4.00
Exercised		-		-		-		-
Forfeited, cancelled, expired		-		-		-		-
Outstanding as of December 31, 2017		4,857,176	$	0.51		3.19		412,864
Granted		930,410		1.35		4.00		-
Exercised		-		-		-		-
Forfeited, cancelled, expired		-		-		-		-
Outstanding as of September 30, 2018		5,787,586	$	0.60		2.59		-

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Income (Loss) Per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Income (Loss) Per Share

Note 15 – Income (Loss) Per Share

Net income (loss) per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net income (loss) per common share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive.

The following shares are not included in the computation of diluted income (loss) per share, because their inclusion would be anti-dilutive:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Preferred shares	-		-		-		-
Convertible notes		155,190		375,082		155,190		375,082
Warrants		5,787,586		5,137,298		5,787,586		5,137,298
Options		-		-		-		-
Total anti-dilutive weighted average shares		5,942,776		5,512,380		5,942,776		5,512,380

If all dilutive securities had been exercised at September 30, 2018, the total number of common shares outstanding would be as follows:

Common Shares	31,611,785
Preferred Shares	-
Convertible notes	155,190
Warrants	5,787,586
Options	-
Total potential shares	37,554,561

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 16 – Commitments and Contingencies

On December 1, 2016, the Company entered into a four-year lease with Cahuenga Management LLC for a storefront location at 15503 Cahuenga Blvd., North Hollywood, California 91601. Base rent under the lease is $2,200 per month, with an escalating provision up to $2,404 throughout the lease term. The rental agreement includes operating expenses such as common area maintenance, property taxes and insurance.

On August 28, 2017, the Company entered into a one-year lease with B3 Investments, LLC for a storefront location at Suites D104 and D105, 2406 24^th Street, South Phoenix, Arizona. Base rent under the lease is $1,350 per month plus 2% ($27) rental tax. The rental agreement includes operating expenses such as common area maintenance, property taxes and insurance.

Legal Proceedings

In the ordinary course of business, the Company from time to time is involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. However, in the opinion of management, other than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse effect on the Company’s financial position or results of operations.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Note 17 – Related Party Transactions

The Company had the following related party transactions:

Notes payable of $1,365,000 to the Doheny Group.

3,208,017 shares of common stock, of which 1,863,152 were granted to the Doheny Group in relation to notes payable and 1,294,865 were granted to the Doheny Group as anti-dilution shares.

50,000 warrants were granted to David Haridim.

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Settlement with Distributor

9 Months Ended

Sep. 30, 2018

Settlement With Distributor

Settlement with Distributor

Note 18 – Settlement with Distributor

On January 21, 2018, the Company and its major distributor memorialized a September 30, 2017 oral agreement that terminated their September 5, 2015 distributorship agreement. The distributor had failed to timely make required monthly payments. The Company agreed to not pursue amounts due it from the distributor. The Company has sent letters to all customers of the distributor and believes that it will retain most, if not all, customers. If customers are not retained, the customers will need to have the interlock device removed and returned to the Company. The Company had approximately 900 interlock units rented to the distributor. As of December 31, 2017, $35,979 in distributor revenue and accounts receivable were reversed out. As of October 1, 2017, the distributor became an employee of the Company and was to service the area that he had been a distributor of.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Note 19 – Subsequent Events

The Company follows the guidance in FASB ASC Topic 855, Subsequent Events (“ASC 855”), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. ASC 855 sets forth (i) the period after the balance sheet date during which management of a reporting entity evaluates events or transactions that may occur for potential recognition or disclosure in the consolidated financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its consolidated financial statements, and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date.

On October 4, 2018, Michael Wainer entered into a personal loan agreement with Kabbage for $72.800. Michael Wainer then lent $72,800 to the Company. The loan was for twelve months and loan fees and interest were $37,128. Payments were $11,527 per month for the first six months and $6,795 per month for the final six months. Payments were to be paid by the Company to Kabbage. An initial payment of $11,527 was made in December 2018. On December 31, 2018, Michael Wainer released the Company from payment of the loan.

On October 11, 2018, the Company entered into a loan agreement with Forward Financing for $60,000. Total interest and fees on the loan were $18,600. Payments of $561.43 were automatically paid each business day starting October 15, 2018 and were to be for 140 days business days. On January 11, 2019, Forward Financing agreed to settle an outstanding balance of $49,580.64 for $30,805.64,

On December 1, 2018, an addendum (addendum #4) was made to the November 1, 2016 loan agreement with The Doheny Group. A December 1, 2018 payment by the Company was not made and thus the Company was in default to the Doheny Group. Therefore, the royalty will become $5.00 per unit on all units in perpetuity, the loan amount has increased to $2,000,000, as of December 1, 2018 payment of $20,000 was not made and the loan amount became $2,020,000, a new monthly payment of $50,500 interest only will be due as of January 1, 2019, if the full $50,500 cannot be paid, then a partial payment will be made with the unpaid amount added to the principal, and a balloon payment of the balance of principal owed shall be made on December 1, 2023.

On December 17, 2018, the Company entered into a loan agreement with The Doheny Group for $6,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $6,000 on December 17, 2019.

On December 31, 2018, the Company entered into a loan agreement with The Doheny Group for $23,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $23,000 on December 31, 2019.

On December 31, 2018, the Company reached a settlement with note holder Rafael Mavashev in which a $10,000 promissory note and accrued interest were settled for payment of $1,000.

On December 31, 2018, the Company reached a settlement with note holder Edris Consulting in which a $65,000 royalty note and royalties owed were settled for payment of $3,000.

On December 31, 2018, the Company reached a settlement with note holder Oren Azulay in which a $50,000 promissory note and accrued interest payable were settled for payment of $13,000.

On December 31, 2018, Laurence Wainer, CEO of the Company, and The Doheny Group, a major note holder of the Company, reached an agreement in which Laurence Wainer sold 8,924,000 shares of common stock and 1,000,000 shares of preferred stock for a total of $30,000. Upon completion of the sale, David Haridim, managing member of The Doheny Group, assumed the position of CEO of Blow and Drive.

On January 3, 2019, the Company entered into a loan agreement with the Doheny Group for $32,700. The note has no interest (0%), no monthly payments, and a balloon payment of $32,700 on January 3, 2020.

On January 11, 2019, the Company entered into a loan agreement with the Doheny Group for $40,000. The note has no interest (0%), no monthly payments, and a balloon payment of $40,000 on January 11, 2020.

On January 15, 2019, the Company entered into a loan agreement with the Doheny Group for $14,500. The note has no interest (0%), no monthly payments, and a balloon payment of $14,500 on January 15, 2020.

On January 30, 2019, the Company reached a release of all claims with note holder Lucky Draw, LLC. The Company owed Lucky Draw a promissory note payable of $50,000 and accrued interest.

On February 1, 2019, the Company entered into a loan agreement with the Doheny Group for $15,000. The note has no interest (0%), no monthly payments, and a balloon payment of $15,000 on February 1, 2020.

On February 19, 2019, the Company entered into a loan agreement with The Doheny Group for $5,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $5,000 on February 19, 2020.

On March 4, 2019, the Company entered into a loan agreement with The Doheny Group for $10,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $10,000 on March 4, 2020.

On May 1, 2019, the Company entered into a loan agreement with The Doheny Group for $20,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $20,000 on May 1, 2020.

On June 3, 2019, the Company entered into a loan agreement with The Doheny Group for $89,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $89,000 on June 3, 2020.

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company.

Consolidation

Consolidation

The accompanying consolidated financial statements include the results of operations of BDI Manufacturing (the Subsidiary). All material intercompany accounts and transactions between the Company and the Subsidiary have been eliminated in consolidation.

Going Concern

Going Concern

The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of September 30, 2018, the Company had an accumulated deficit of $5,449,373. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company will continue to raise funds through the sale of its equity securities or issuance of notes payable to obtain additional operating capital. The Company is dependent upon its ability to, and will continue to attempt to, secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern.

Based on the Company’s current rate of cash outflows, cash on hand and proceeds from the prior sale of equity securities and issuance of notes payable, management believes that its current cash will not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Company’s plans with respect to its liquidity issues include, but are not limited to, the following:

1)	Continue to issue restricted stock for compensation due to consultants and for its legacy accounts payable in lieu of cash payments; and
2)	Seek additional capital to continue its operations as it rolls out its current products. The Company is currently evaluating additional debt or equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction or consummate a transaction at favorable pricing.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Restatements

Restatements

The Company has restated its September 30, 2017 financial statements. The original September 30, 2017 financial statements erroneously recognized the entire upfront fees from two of its independent distributors in revenue at the time the Company delivered the exclusive license to the distributors rather than over the term of the agreements (5 years). To correct that error, the Company has shown the portion of the upfront fees attributable to that period only.

Reclassifications

Reclassifications

Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue when earned and related costs of sales and expenses when incurred. The Company recognizes revenue in accordance with FASB ASC Topic 605-10-S99, Revenue Recognition, Overall, SEC Materials (“Section 605-10-S74”). Section 605-10-S99 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. Cost of revenue consists of the cost of the purchased goods and labor related to the corresponding sales transaction. When a right of return exists, the Company defers revenues until the right of return expires. The Company recognizes revenue from services at the time the services are completed. Monthly per unit fee revenue is earned and recognized over the term of the contract as support services are provided. Revenues from territory exclusivity are earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price has been determined and collectability has been reasonably assured.

Deferred Revenue

Deferred revenue

Deferred revenue consists of customer orders paid in advance of the delivery of the order. Deferred revenue is classified as short-term as the typical order ships within approximately three weeks of placing the order. Deferred revenue is recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met.

Advertising and Marketing Costs

Advertising and Marketing Costs

Advertising and marketing costs are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $81,652 and $139,811 for the nine months ended September 30, 2018 and 2017, respectively

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of September 30, 2018 and December 31, 2017 is adequate, but actual write-offs could exceed the recorded allowance.

Royalty Accrual

Royalty Accrual

The Company entered into royalty agreement to be paid out in perpetuity based on number of units sold for specified product model in years 2018, 2017 and 2016 in connection with notes payable as discussed in Note 12. These estimates were performed at the inception for the notes to reflect the associated debt discount. The Company accruals royalties and is reduced by payments.

Derivative Liability

Derivative Liability

The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability.

Convertible Debt and Warrants Issued with Convertible Debt

Convertible Debt and Warrants Issued with Convertible Debt

Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options and ASC 740, Beneficial Conversion Features. The Company records a beneficial conversion feature (“BCF”) when convertible debt is issued with conversion features at fixed or adjustable rates that are below market value when issued. If, however, the conversion feature is dependent upon a condition being met or the occurrence of a specific event, the BCF will be recorded when the related contingency is met or occurs. The BCF for the convertible instrument is recorded as a reduction, or discount, to the carrying amount of the convertible instrument equal to the fair value of the conversion feature. The discount is then amortized to interest over the life of the underlying debt using the effective interest method.

The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation, except that the contractual life of the warrant is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense.

For modifications of convertible debt, the Company records a modification that changes the fair value of an embedded conversion feature, including a BCF, as a debt discount which is then amortized to interest expense over the remaining life of the debt. If modification is considered substantial (i.e. greater than 10% of the carrying value of the debt), an extinguishment of debt is deemed to have occurred, resulting in the recognition of an extinguishment gain or loss.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10:

	Fair Value Measurements Using
	Level 1		Level 2			Level 3
Balance December 31, 2017	$	-	$	12,302		$	-
Additions to fair value of derivative liability		-		15,370			-
Change in fair value of derivative liability		-		(9385	)		-
Balance September 30, 2018 (unaudited)	$	-	$	18,287		$	-

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Basic earnings per share is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive common share equivalents outstanding during the period.

Stock Based Compensation

Stock Based Compensation

The Company recognizes stock-based compensation in accordance with FASB ASC Topic 718 Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an employee stock purchase plan based on the estimated fair values.

For non-employee stock-based compensation, the Company applies FASB ASC Topic 505 Equity-Based Payments to Non-Employees, which requires stock-based compensation related to non-employees to be accounted for based on the fair value of the related stock or options or the fair value of the services on the grant date, whichever is more readily determinable in accordance with FASB ASC Topic 718.

Related Parties

Related Parties

Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company.

Concentrations

Concentrations

All of the Company’s ignition interlock devices are purchased from one supplier in China. The loss of this supplier could have a material impact on the Company’s ability to timely obtain additional units.

For the nine months ended September 30, 2018, one distributor, licensed in four states, makes up approximately 89% percent of all revenues from distributors at September 30, 2018. The loss of this distributer would have a material impact on the Company’s revenues. Per an agreement dated January 21, 2018 that memorialized a September 30, 2017 oral agreement, the Company and its largest distributor cancelled their distributorship agreement dated September 5, 2015. See Note 18 below.

Income Taxes

Income Taxes

The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with ASC Topic 740, “Accounting for Income Taxes”. ASC 740-10-25 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Derivative Liabilities

Derivative Liabilities

The Company assessed the classification of its derivative financial instruments as of March 31, 2018, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as defined.

Convertible Instruments

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”.

ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In March 2018 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-05, Income Taxes (Topic 740). The Tax Cut and Jobs Act of 2017 changes existing tax law and includes numerous provisions that will affect businesses. This guidance addresses the recognition of taxes payable or refundable for the current year and the recognition of deferred tax liabilities and deferred tax assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. The Company does not believe that this guidance will have an impact as the Company has been in a loss position and has not recognized federal taxes payable or refundable or deferred tax liabilities or deferred tax assets.

In November 2017, the FASB issued ASU No. 2017-14, Income Statement-Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). The ASU modified Topic 220 such that an operating-differential subsidy must be set forth as a separate line item in the statement of comprehensive income either under a revenue caption presented separately from revenue from contracts with customers accounted for under ASC Topic 606 or as credit in the costs and expenses section. The ASU essentially deleted Topic 605 and noted that it was superseded by Topic 606. The ASU modified Topic 606 for vaccine manufacturers to recognize revenue when vaccines are placed into Federal Governmental stockpile programs because control of the enumerated vaccines will have been transferred to the customer and the criteria to recognize revenue in a bill-and-hold arrangement under ASC Topic 606 will have been met. The Company is currently evaluating the impact of adopting this guidance.

In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition, Revenue from Contracts with Customers, Leases. The ASU adds SEC paragraphs to the new revenue and leases sections of the Accounting Standards Codification (ASC or Codification) on the announcement the SEC Observer made at the 20 July 2017 EITF meeting. The SEC Observer said that the SEC staff would not object if entities that are considered public business entities only because their financial statements or financial information is required to be included in another entity’s SEC filing use the effective dates for private companies when they adopt ASC 606, Revenue from Contracts with Customers, and ASC 842, Leases. This would include entities whose financial statements are included in another entity’s SEC filing because they are significant acquirees under Rule 3-05 of Regulation S-X, significant equity method investees under Rule 3-09 of Regulation S-X and equity method investees whose summarized financial information is included in a registrant’s financial statement notes under Rule 4-08(g) of Regulation S-X. The Company is currently evaluating the impact of adopting this guidance.

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share; Distinguishing Liabilities from Equity; Derivatives and Hedging; Accounting for Certain Financial Instruments with Down Round Features; Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. An entity will no longer have to consider “down round” features (i.e., a provision in an equity-linked financial instrument or an embedded feature that reduces the exercise price if the entity sells stock for a lower price or issues an equity-linked instrument with a lower exercise price) when determining whether certain equity-linked financial instruments or embedded features are indexed to its own stock. An entity that presents earnings per share (EPS) under ASC 260 will recognize the effect of a down round feature in a freestanding equity-classified financial instrument only when it is triggered. The effect of triggering such a feature will be recognized as a dividend and a reduction to income available to common shareholders in basic EPS. The new guidance will require new disclosures for financial instruments with down round features and other terms that change conversion or exercise prices. The ASU also replaces today’s indefinite deferral of the guidance in ASC 480-10 for certain mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests with a scope exception. This change does not require any transition guidance because it does not have an accounting effect. The Company is currently evaluating the impact of adopting this guidance.

In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes will be recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The effect of the adoption of the standard will depend on the nature and amount of any future transactions.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows; Classification of Certain Cash Receipts and Cash Payments. The new standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The eight issues are: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned insurance policies; distribution received from equity method investees; beneficial interests in securitization transactions; separately identifiable cash flows and application of the predominance principle. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within fiscal periods beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers. The new standard clarifies the implementation guidance on principal versus agent considerations in Topic 606, Revenue from Contracts with Customers. Topic 606 addresses that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. When an entity is a principal (that is, if it controls the specific good or service before that good or service is transferred to a customer) and satisfies a performance obligation, the entity recognizes revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specific good or service transferred to the customer. When an entity is an agent and satisfies a performance obligation, the entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specific good or service to be provided by the other party. The new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the impact of adopting this guidance.

In February 2016, the FASB issued ASU No. 2016-2, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for leases for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of adopting this guidance.

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Basis of Presentation and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Schedule of Financial Instruments Measured at Fair Value on Recurring Basis

The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10:

	Fair Value Measurements Using
	Level 1		Level 2			Level 3
Balance December 31, 2017	$	-	$	12,302		$	-
Additions to fair value of derivative liability		-		15,370			-
Change in fair value of derivative liability		-		(9385	)		-
Balance September 30, 2018 (unaudited)	$	-	$	18,287		$	-

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Restatements (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Changes and Error Corrections [Abstract]

Schedule of Restated Statements

Blow & Drive Interlock Corporation

Consolidated Balance Sheet

	September 30, 2017 as filed			adjustment			revised September 30, 2017
	(unaudited)			(unaudited)			(unaudited)
Assets
Current Assets
Cash	$	84,370					$	84,370
Accounts receivable, net		39,069						39,069
Prepaid Expenses		1,569						1,569
Inventories		10,650						10,650
Total Current Assets		135,658			-			135,658
Other Assets
Deposits		5,131						5,131
Furniture and equipment		925,728						925,728
Total Assets	$	1,066,517		$	-		$	1,066,517
Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts payable	$	102,791					$	102,791
Accrued expenses		235,398						235,398
Accrued royalty payable		145,317						145,317
Accrued interest		41,078						41,078
Income taxes payable		5,929						5,929
Deferred revenue		91,057			7,000			98,057
Derivative liability		62,537						62,537
Notes payable, net of debt discount of $22,431		154,069						154,069
Notes payable - related party, current portion		-						-
Convertible notes payable, net of debt discount of $3,115		54,385						54,385
Royalty notes payable, net of debt discount of $29,393		892						892
Total Current Liabilities		893,453			7,000			900,453
Long term liabilities
Notes payable, net of debt discount of $46,750		148,250						148,250
Notes payable - related party		-						-
Royalty notes payable, net of debt discount of $353,894		163,106						163,106
Accrued royalties payable		1,786						1,786
Total Liabilities		1,206,595			7,000			1,213,595
Stockholders’ Equity (Deficit)
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000,000 issued		1,000						1,000
Common stock, $0.0001 par value, 100,000,000 shares authorized, 24,057,961 outstanding		2,406						2,406
Additional paid-in capital		2,696,281						2,696,281
Accumulated deficit		(2,839,765	)		(7,000	)		(2,846,765	)
Total Stockholder’s Equity (Deficit)		(140,078	)		(7,000	)		(147,078	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	1,066,517		$	-		$	1,066,517

Blow & Drive Interlock Corporation

Consolidated Statements of Operations

(unaudited)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2017 as filed			adjustment		revised 2017			2017 as filed			adjustment		revised 2017
Monitoring revenue	$	394,139				$	394,139		$	674,197				$	674,197
Distributorship revenue		42,276			43,000		85,276			237,729			49,000		286,729
Total revenue		436,415			43,000		479,415			911,926			49,000		960,926
Monitoring cost of revenue		57,817					57,817			111,884					111,884
Distributorship cost of revenue		1,000					1,000			7,739					7,739
Total cost of revenue		58,817			-		58,817			119,623			-		119,623
Gross profit		377,598			43,000		420,598			792,303			49,000		841,303
Operating expenses
Payroll		272,900					272,900			457,288					457,288
Professional fees		16,603					16,603			93,505					93,505
General and administrative expenses		269,039					269,039			579,172					579,172
Depreciation		90,512					90,512			234,654					234,654
Total operating expenses		649,054			-		649,054			1,364,619			-		1,364,619
Loss from operations		(271,456	)		43,000		(228,456	)		(572,316	)		49,000		(523,316	)
Other income (expense)
Interest expense		(145,740	)				(145,740	)		(440,538	)				(440,538	)
Change in fair value of derivative liability		(6,474	)				(6,474	)		11,018					11,018
Loss on extinguishment of debt		-					-			(305,000	)				(305,000	)
Total other income (expense)		(152,214	)		-		(152,214	)		(734,520	)		-		(734,520	)
Loss before provision for income taxes		(423,670	)		43,000		(380,670	)		(1,306,836	)		49,000		(1,257,836	)
Provision for income taxes		-					-			1,600					1,600
Net loss	$	(423,670	)	$	43,000	$	(380,670	)	$	(1,308,436	)	$	49,000	$	(1,259,436	)
Basic and diluted loss per common share	$	(0.02	)			$	(0.02	)	$	(0.06	)			$	(0.06	)
Weighted average number of common shares outstanding - basic and diluted		22,856,861					22,856,861			21,922,340					21,922,340

Blow & Drive Interlock Corporation

Consolidated Statement of Cash Flows

(unaudited)

	Nine Months Ended September 30,
	2017 as filed			adjustment			revised 2017
Cash flows from operating activities:
Net loss	$	(1,308,436	)	$	49,000		$	(1,259,436	)
Adjustments to reconcile from net loss to net cash used in operating activities
Depreciation and amortization		234,654						234,654
Loss on fixed assets disposals		12,989						12,989
Shares issued for services		14,188						14,188
Allowance for doubtful accounts		5,412						5,412
Loss on extinguishment of debt		305,000						305,000
Amortization of debt discount		275,465						275,465
Change in fair value of derivative liability		(11,019	)					(11,019	)
Changes in operating assets and liabilities
Accounts receivable		6,760						6,760
Prepaid expenses		792						792
Deposits		1,123						1,123
Accounts payable		74,541						74,541
Accrued expenses		193,409						193,409
Accrued interest		30,968						30,968
Deferred revenue		(15,274	)		(49,000	)		(64,274	)
Net cash used in operating activities		(179,428	)		-			(179,428	)
Cash flows from investing activities:
Purchase of property and equipment		(817,026	)					(817,026	)
Deposits on units		250,000						250,000
Net cash used in investing activities		(567,026	)		-			(567,026	)
Cash flows from financing activities:
Proceeds from notes payable		195,400						195,400
Repayments of notes payable		(14,268	)					(14,268	)
Repayments of royalty notes payable		(65,529	)					(65,529	)
Repayment of related party notes payable		(54,187	)					(54,187	)
Proceeds from issuance of common stock		653,099						653,099
Net cash provided by financing activities		714,515			-			714,515
Net increase (decrease) in cash		(31,939	)		-			(31,939	)
Cash, beginning of period		116,309						116,309
Cash, end of period	$	84,370		$	-		$	84,370
Supplemental disclosure of cash information:
Cash paid during the period for:
Interest	$	134,105					$	134,105
Income taxes	$	-					$	-
Supplemental disclosure of non-cash investing and financing activities
Common stock and warrants issued for services	$	14,188					$	14,188
Establishment of debt discount for royalty notes	$	-					$	-
Preferred stock issued for debt reduction and services	$	350,000					$	350,000

Blow & Drive Interlock Corporation

Consolidated Statement of Shareholders’ Equity (Deficit)

(unaudited)

	Preferred Stock				Common Stock				Additional Paid-in			Accumulated						revised Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Capital			Deficit			adjustment			Deficit			(Deficit)
Balance December 31, 2016		-	$	-		19,575,605	$	1,958	$	1,594,721		$	(1,531,330	)	$	(56,000	)	$	(1,587,330	)	$	9,349
Shares issued for services		-		-		27,180		3		13,910												13,913
Warrants issued for services										278												278
Shares issued related to debt		1,000,000		1,000		195,400		19		434,700												435,719
Shares issued for cash		-		-		3,736,894		374		652,725												653,099
Shares issued related to anti-dilution		-		-		522,882		52		(52	)											-
Net loss		-		-		-		-		-			(1,308,436	)		49,000			(1,259,436	)		(1,259,436	)
Balance September 30, 2017		1,000,000	$	1,000		24,057,961	$	2,406	$	2,696,282		$	(2,839,766	)	$	(7,000	)	$	(2,846,766	)	$	(147,078	)

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule of Net Sales and Identifiable Operating Income by Segment

The following table summarizes net sales and identifiable operating income by segment:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Segment gross profit (a):
Monitoring	$	202,694		$	336,322		$	569,244		$	562,313
Distributorships		20,240			84,276			59,505			278,990
Gross profit		222,934			420,598			628,749			841,303
Identifiable segment operating expenses (b):
Monitoring		-			86,543			-			143,955
Distributorships		-			3,552			-			89,642
		-			90,095			-			233,597
Identifiable segment operating income (c):
Monitoring		202,694			249,779			569,244			418,358
Distributorships		20,240			80,724			59,505			189,348
		222,934			330,503			628,749			607,706
Reconciliation of identifiable segment income to corporate income (d):
Payroll		240,499			272,900			706,648			457,288
Professional fees		26,175			16,603			114,230			93,505
General and administrative expenses		170,504			269,039			639,598			579,172
Depreciation		-			417			-			1,057
Interest expense		119,028			145,740			329,586			440,538
Change in fair value of derivative liability		(5,093	)		6,474			(9,385	)		(11,018	)
Loss on extinguishment of debt		-			-			-			305,000
Loss before provision for income taxes		(328,179	)		(380,670	)		(1,151,928	)		(1,257,836	)
Provision for income taxes		-			-			800			1,600
Net loss	$	(328,179	)	$	(380,670	)	$	(1,152,728	)	$	(1,259,436	)
Total net property, plant, and equipment assets
Monitoring							$	-		$	562,542
Distributorships								-			350,298
Corporate								-			12,889
							$	-		$	925,729

(a) Segment gross profit includes segment net sales less segment cost of sales

(b) Identifiable segment operating expenses consists of identifiable depreciation expense

(c) Identifiable segment operating incomes consists of segment gross profit less identifiable operating expense

(d) General corporate expense consists of all other non-identifiable expenses

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Deposits (Tables)

9 Months Ended

Sep. 30, 2018

Deposit Assets Disclosure [Abstract]

Schedule of Deposits

Deposits consist of the following:

	September 30, 2018		December 31, 2017
Lease Deposits	$	5,131	$	5,131

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Schedule of Accrued Expense

Accrued Expenses consist of the following:

	September 30, 2018		December 31, 2017
Accrued payroll and payroll taxes	$	6,141	$	6,141
Deferred rent		5,306		4,945
Other accrued expenses		9,100		5,000
Total	$	20,547	$	15,685

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Deferred Revenue (Tables)

9 Months Ended

Sep. 30, 2018

Deferred Revenue Disclosure [Abstract]

Schedule of Deferred Revenue

As of September 30, 2018 and December 31, 2017, deferred revenue consists of the following:

	September 30, 2018		December 31, 2017
Monitoring deferred revenues	$	115,551	$	177,878
Distributorship deferred revenues		-		6,500
Total	$	115,551	$	184,378

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Notes Payable (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Notes Payable

Notes payable consist of the following:

	As of September 30, 2018									As of December 31, 2017
	Amount			Discount			Net Balance			Amount			Discount			Net Balance
January 2016 ($65,000) - 0% interest with payment of $937 per month for 4 months, $1,250 per month for 8 months, and $3,531 per month until fully paid.	$	940		$	-		$	940		$	4,482		$	(3,889	)	$	593
April 2016 ($50,000) - 18% interest at payment of $750 per month with unpaid balance due at March 31, 2018 including issuance of 50,000 common shares.		50,000			-			50,000			50,000			(7,292	)		42,708
September 2016 ($10,000) - 24% interest with outstanding balance with accrued interest due at October 31, 2018 with an option of accrued interest to be converted to common stock with 25% discount of trading price		10,000			-			10,000			10,000			-			10,000
December 2017 ($50,000) - 15% interest due in December 2020 including issuance of 100,000 shares of common stock with exercise price at $0.25 per share.		40,736			(16,360	)		24,376			50,000			(22,021	)		27,979
Total notes payable		101,676			(16,360	)		85,316			114,482			(33,202	)		81,280
Less: non-current portion		(24,994	)		8,812			(16,182	)		(35,747	)		14,473			(21,274	)
Notes payable, current portion	$	76,682		$	(7,548	)	$	69,134		$	78,735		$	(18,729	)	$	60,006

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Notes Payable - Related Parties (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Notes Payable Related Parties

Notes payable to related parties consist of the following:

	As of September 30, 2018											As of December 31, 2017
	Amount			Discount		Replacement			Net Balance			Amount			Discount			Net Balance
January 2016 ($55,000) – Payment of $937 per month for 4 months, $1,250 per month 5 months, and $3,531 per month until fully paid	$	-		$	-				$	-		$	5,923		$	(6,289	)	$	(366	)
November 2017 ($900,000) - 60 months of payments of $25,000 per month with $15,000 in principal payment and $10,000 in interest payment, first payment due on December 1, 2017 and the final payment on November 1, 2022.		765,000			-		(765,000	)		-			885,000			-			885,000
February 2018 ($100,000) – Fee payment of $2,500 per month, principal due February 1, 2019.		100,000			-		(100,000	)		-			-			-			-
March 2018 ($500,000) – Fee payment of $12,500 per month first year, $12,000 per month second year, $11,500 per month third year, $11,000 per month fourth year, $105,00 per month fifth year, principal due March 1, 2020.		500,000			-		(500,000	)		-			-			-			-
August 2018 ($1,365,000) – Replaced November 2017 note ($765,000 balance at August 1, 2018), February 2018 note ($100,000) and March 2018 note ($500,000). Interest only payment of $20,000 per month first nine months, then payment of $53,500 per month of principal and interest for forty-eight months after which principal will be fully paid		-			-		1,365,000			1,365,000			-			-			-
Total related party notes payable		1,365,000			-		-			1,365,000			890,923			(6,289	)		884,634
Less: non-current portion		(1,115,000	)		-		(136,250	)		(1,251,250	)		(839,306	)		-			(839,306	)
Related party notes payable, current portion	$	250,000		$	-		(136,250	)	$	113,750		$	51,617		$	(6,289	)	$	45,328

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Convertible Notes Payable (Table)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Convertible Notes Payable

Convertible notes payable consists of the following:

	As of September 30, 2018									As of December 31, 2017
	Amount			Discount			Net Balance			Amount			Discount			Net Balance
August 2015 ($15,000) - 7.5% interest bearing convertible debenture due on August 7, 2017 with interest only payments and due upon maturity.	$	7,500		$	-		$	7,500		$	7,500		$	-		$	7,500
November 2017 ($5,000) - 10% interest bearing convertible debenture due on October 27, 2020 with interest only payments and due upon maturity.		-			-			-			5,000			(2,011	)		2,989
March 2018 ($20,000) – 10% interest bearing convertible debenture due on March 9, 2021, with interest paid in cash for the first six months, and either in cash or shares of common stock thereafter. Principal is due March 9, 2021, paid either in cash or common stock, at the Company’s discretion		20,000			(12,808	)		7,192			-			-			-
Total convertible notes payable		27,500			(12,808	)		14,692			12,500			(2,011	)		10,489
Less: non-current portion		(20,000	)		7,684			(12,316	)		(5,000	)		1,483			(3,517	)
Convertible notes payable, current portion	$	7,500		$	(5,124	)	$	2,376		$	7,500		$	(528	)	$	6,972

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Derivative Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Liabilities

Derivative liabilities consisted of the following:

	September 30, 2018		December 31, 2017
August 2015 - $15,000 convertible debt	$	3,599	$	7,310
November 2017 - $5,000 convertible debt		-		4,992
March 2018 - $20,000 convertible debt		14,688		-
Total derivative liabilities	$	18,287	$	12,302

Schedule of Revalue of Derivatives Using Black Scholes Model

The following table describes the Derivative liability as of December 31, 2017 and September 30, 2018.

	Balance							Balance
	at 12/31/17		Additions		Changes			at 09/30/18
August 2015 - $15,000 convertible debt	$	7,310	$	-	$	(3,711	)	$	3,599
November 2017 - $5,000 convertible debt		4,992				(4,992	)		-
March 2018 - $20,000 convertible debt		-		15,370		(682	)		14,688
Total	$	12,302	$	15,370	$	(9,385	)	$	18,287

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Accrued Royalties Payable (Tables)

9 Months Ended

Sep. 30, 2018

Accrued Royalties Payable

Schedule of Accrued Royalties

Based on the royalty agreement, the Company had the following royalty accruals:

	September 30, 2018			December 31, 2017
January 2016 royalty agreement	$	113,941		$	86,230
March 2016 royalty agreement		126,318			88,010
September and November 2016 royalty agreements		(5,203	)		5,753
November 2017 royalty agreement		8,530			-
August 2018 royalty agreement		11,125			-
Total accrued royalties	$	254,711		$	179,993

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Warrants (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Warrant Activity

A summary of warrant activity for the periods presented is as follows:

			Weighted Average
	Warrants for		Weighted Average		Remaining		Aggregate
	Common Shares		Exercise Price		Contractual Term		Intrinsic Value
Outstanding as of December 31, 2016		160,000	$	0.53		1.97		-
Granted		4,697,176		0.51		4.00
Exercised		-		-		-		-
Forfeited, cancelled, expired		-		-		-		-
Outstanding as of December 31, 2017		4,857,176	$	0.51		3.19		412,864
Granted		930,410		1.35		4.00		-
Exercised		-		-		-		-
Forfeited, cancelled, expired		-		-		-		-
Outstanding as of September 30, 2018		5,787,586	$	0.60		2.59		-

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Income (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following shares are not included in the computation of diluted income (loss) per share, because their inclusion would be anti-dilutive:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Preferred shares	-		-		-		-
Convertible notes		155,190		375,082		155,190		375,082
Warrants		5,787,586		5,137,298		5,787,586		5,137,298
Options		-		-		-		-
Total anti-dilutive weighted average shares		5,942,776		5,512,380		5,942,776		5,512,380

Schedule of Dilutive Securities of Common Shares Outstanding

If all dilutive securities had been exercised at September 30, 2018, the total number of common shares outstanding would be as follows:

Common Shares	31,611,785
Preferred Shares	-
Convertible notes	155,190
Warrants	5,787,586
Options	-
Total potential shares	37,554,561

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Organization and Nature of Business (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2015
December 31, 2018 [Member]
Number of stock sold during period value	$ 30,000
Common Stock [Member] | December 31, 2018 [Member]
Number of stock sold during period	8,924,000
Preferred Stock [Member] | December 31, 2018 [Member]
Number of stock sold during period	1,000,000
Arizona Corporation [Member]
Ownership percent		100.00%

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Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Accumulated deficit	$ (5,449,373)	$ (2,846,765)	$ (4,296,645)
Term of agreement	5 years
Advertising and marketing expenses	$ 81,652	$ 139,811
Maximum percentage of carrying value of debt	10.00%
One Distributer [Member] | Revenue [Member]
Concentration risk, percentage	89.00%

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Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Financial Instruments Measured at Fair Value on Recurring Basis (Details)	9 Months Ended
	Sep. 30, 2018 USD ($)
Fair Value, Inputs, Level 1 [Member]
Balance, beginning
Additions to fair value of derivative liability
Change in fair value of derivative liability
Balance, ending
Fair Value, Inputs, Level 2 [Member]
Balance, beginning	12,302
Additions to fair value of derivative liability	15,370
Change in fair value of derivative liability	(9,385)
Balance, ending	18,287
Fair Value, Inputs, Level 3 [Member]
Balance, beginning
Additions to fair value of derivative liability
Change in fair value of derivative liability
Balance, ending

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Restatements (Details Narrative)	9 Months Ended
	Sep. 30, 2018
Accounting Changes and Error Corrections [Abstract]
Term of agreements	5 years

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Restatements - Schedule of Restated Statements (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017	Dec. 31, 2016
Cash		$ 84,370		$ 116,309	$ 116,309	$ 116,309	$ 84,370	$ 116,309
Accounts receivable, net	$ 5,355		$ 5,355		28,916		39,069
Prepaid Expenses	2,648		2,648		2,655		1,569
Inventories							10,650
Total Current Assets	50,127		50,127		63,445		135,658
Deposits	5,131		5,131		5,131		5,131
Furniture and equipment							925,728
Total Assets	55,258		55,258		68,576		1,066,517
Accounts payable					39,695		102,791
Accrued expenses	20,547		20,547		15,685		235,398
Accrued royalty payable							145,317
Accrued interest	135,233		135,233		35,460		41,078
Income taxes payable	5,930		5,930		5,930		5,929
Deferred revenue							98,057
Derivative liability	18,287		18,287		12,302		62,537
Notes payable, net of debt discount of $22,431	69,134		69,134		60,006		154,069
Notes payable - related party, current portion	113,750		113,750		45,328
Convertible notes payable, net of debt discount of $3,115	2,376		2,376		6,972		54,385
Royalty notes payable, net of debt discount of $29,393							892
Total Current Liabilities	735,519		735,519		585,749		900,453
Notes payable, net of debt discount of $46,750	16,182		16,182		21,274		148,250
Notes payable - related party
Royalty notes payable, net of debt discount of $353,894							163,106
Accrued royalties payable							1,786
Total Liabilities	2,015,267		2,015,267		1,449,846		1,213,595
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000,000 issued	1,000		1,000		1,000		1,000
Common stock, $0.0001 par value, 100,000,000 shares authorized, 24,057,961 outstanding	3,161		3,161		2,622		2,406
Additional paid-in capital	3,485,203		3,485,203		2,911,753		2,696,281
Accumulated deficit	(5,449,373)		(5,449,373)		(4,296,645)		(2,846,765)
Total Stockholder's Equity (Deficit)	(1,960,009)		(1,960,009)		(1,381,270)		(147,078)	9,349
Total Liabilities and Stockholders' Equity (Deficit)	55,258		55,258		68,576		1,066,517
Monitoring revenue		394,139		674,197
Distributorship revenue		85,276		286,729
Total revenue	241,658	479,415	724,154	960,926
Monitoring cost of revenue		57,817		111,884
Distributorship cost of revenue		1,000		7,739
Total cost of revenue	18,724	58,817	95,405	119,623
Gross profit	222,934	420,598	628,749	841,303
Payroll	240,499	272,900	706,648	457,288
Professional fees	26,175	16,603	114,230	93,505
General and administrative expenses	170,504	269,039	639,598	579,172
Depreciation		90,512		234,654
Total operating expenses	437,178	649,054	1,460,476	1,364,619
Loss from operations	(214,244)	(228,456)	(831,727)	(523,316)
Interest expense	(119,028)	(145,740)	(329,586)	(440,538)
Change in fair value of derivative liability		(6,474)	9,385	11,019
Loss on extinguishment of debt				(305,000)		116,541
Total other income (expense)	(113,935)	(152,214)	(320,201)	(734,520)
Loss before provision for income taxes		(380,670)		(1,257,836)
Provision for income taxes			800	1,600
Net loss	$ (328,179)	$ (380,760)	$ (1,152,728)	$ (1,259,436)	(2,709,315)
Basic and diluted loss per common share	$ (0.01)	$ (0.02)	$ (0.04)	$ (0.06)
Weighted average number of common shares outstanding - basic and diluted	31,205,429	22,856,861	29,152,045	21,922,340
Loss on fixed assets disposals				$ 12,989
Shares issued for services			110,200	14,188
Allowance for doubtful accounts			(26,541)	5,412
Amortization of debt discount			27,704	275,465
Accounts receivable			50,102	6,760
Prepaid expenses			6	792
Deposits				1,123
Accounts payable			(39,695)	74,541
Accrued expenses			4,863	168,273
Accrued interest			99,773	30,968
Deferred revenue			(68,827)	(64,274)
Net cash used in operating activities			(924,727)	(179,428)
Purchase of property and equipment				(817,026)
Deposits on units				250,000
Net cash used in investing activities				(567,026)
Proceeds from notes payable			21,600
Repayments of notes payable			(34,405)	(46,037)
Repayments of royalty notes payable				(65,529)
Repayment of related party notes payable			126,050	87,947
Proceeds from issuance of common stock			458,705	653,099
Net cash provided by financing activities			934,977	714,515
Net increase (decrease) in cash			10,250	(31,939)
Cash, beginning of period				116,309	116,309
Cash, end of period		$ 84,370		84,370		116,309
Interest			91,634	134,105
Income taxes
Common stock and warrants issued for services			110,200	14,188
Establishment of debt discount for royalty notes
Preferred stock issued for debt reduction and services				350,000
Beginning balance				9,349	9,349
Shares issued for services			110,201	13,913	13,913
Warrants issued for services					278
Shares issued related to debt				435,719	455,468
Shares issued for cash			458,705	653,099	849,037
Shares issued related to anti-dilution
Net loss				(1,259,436)
Ending balance		(147,078)		(147,078)		9,349
Preferred Stock [Member]
Beginning balance
Beginning balance, shares
Shares issued for services
Shares issued for services, shares
Warrants issued for services
Shares issued related to debt				$ 1,000
Shares issued related to debt, shares				1,000,000
Shares issued for cash
Shares issued for cash, shares
Shares issued related to anti-dilution
Net loss
Ending balance		$ 1,000		$ 1,000
Ending balance, shares		1,000,000		1,000,000
Common Stock [Member]
Total Stockholder's Equity (Deficit)	$ 3,161		3,161		$ 2,622			1,958
Net loss
Beginning balance				$ 1,958	$ 1,958
Beginning balance, shares				19,575,605	19,575,605
Shares issued for services			$ 48	$ 3	$ 3
Shares issued for services, shares			476,000	27,180	27,180
Warrants issued for services
Shares issued related to debt				$ 19	$ 18
Shares issued related to debt, shares				195,400	195,400
Shares issued for cash			$ 434	$ 374	$ 569
Shares issued for cash, shares			4,340,883	3,736,894	5,686,656
Shares issued related to anti-dilution			$ 54	$ 52	$ 74
Shares issued related to anti-dilution, shares			538,256	522,882	739,253
Net loss
Ending balance		$ 2,406		$ 2,406		$ 1,958
Ending balance, shares		24,057,961		24,057,961		19,575,605
Additional Paid-In Capital [Member]
Total Stockholder's Equity (Deficit)	3,485,203		$ 3,485,203		$ 2,911,753			1,594,721
Net loss
Beginning balance				$ 1,594,721	1,594,721
Shares issued for services			110,153	13,910	13,910
Warrants issued for services				278	278
Shares issued related to debt				434,700	454,450
Shares issued for cash			458,271	652,725	848,468
Shares issued related to anti-dilution			(54)	(52)	(74)
Net loss
Ending balance		$ 2,696,282		2,696,282		$ 1,594,721
Accumulated Deficit [Member]
Total Stockholder's Equity (Deficit)	$ (5,449,373)		(5,449,373)		(4,296,645)			(1,587,330)
Net loss			(1,152,728)		(2,709,315)
Beginning balance				(1,587,330)	(1,587,330)
Shares issued for services				13,913
Warrants issued for services				278
Shares issued related to debt
Shares issued for cash
Shares issued related to anti-dilution
Net loss				(1,259,436)
Ending balance		(2,846,766)		(2,846,766)		(1,587,330)
Previously Reported [Member]
Cash		84,370		116,309	116,309	116,309	84,370	$ 116,309
Accounts receivable, net							39,069
Prepaid Expenses							1,569
Inventories							10,650
Total Current Assets							135,658
Deposits							5,131
Furniture and equipment							925,728
Total Assets							1,066,517
Accounts payable							102,791
Accrued expenses							235,398
Accrued royalty payable							145,317
Accrued interest							41,078
Income taxes payable							5,929
Deferred revenue							91,057
Derivative liability							62,537
Notes payable, net of debt discount of $22,431							154,069
Notes payable - related party, current portion
Convertible notes payable, net of debt discount of $3,115							54,385
Royalty notes payable, net of debt discount of $29,393							892
Total Current Liabilities							893,453
Notes payable, net of debt discount of $46,750							148,250
Notes payable - related party
Royalty notes payable, net of debt discount of $353,894							163,106
Accrued royalties payable							1,786
Total Liabilities							1,206,595
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000,000 issued							1,000
Common stock, $0.0001 par value, 100,000,000 shares authorized, 24,057,961 outstanding							2,406
Additional paid-in capital							2,696,281
Accumulated deficit							(2,839,765)
Total Stockholder's Equity (Deficit)							(140,078)
Total Liabilities and Stockholders' Equity (Deficit)							1,066,517
Monitoring revenue		394,139		674,197
Distributorship revenue		42,276		237,729
Total revenue		436,415		911,926
Monitoring cost of revenue		57,817		111,884
Distributorship cost of revenue		1,000		7,739
Total cost of revenue		58,817		119,623
Gross profit		377,598		792,303
Payroll		272,900		457,288
Professional fees		16,603		93,505
General and administrative expenses		269,039		579,172
Depreciation		90,512		234,654
Total operating expenses		649,054		1,364,619
Loss from operations		(271,456)		(572,316)
Interest expense		(145,740)		(440,538)
Change in fair value of derivative liability		(6,474)		11,018
Loss on extinguishment of debt				(305,000)
Total other income (expense)		(152,214)		(734,520)
Loss before provision for income taxes		(423,670)		(1,306,836)
Provision for income taxes				1,600
Net loss		$ (423,670)		$ (1,308,436)
Basic and diluted loss per common share		$ (0.02)		$ (0.06)
Weighted average number of common shares outstanding - basic and diluted		22,856,861		21,922,340
Loss on fixed assets disposals				$ 12,989
Shares issued for services				14,188
Allowance for doubtful accounts				5,412
Amortization of debt discount				275,465
Accounts receivable				6,760
Prepaid expenses				792
Deposits				1,123
Accounts payable				74,541
Accrued expenses				193,409
Accrued interest				30,968
Deferred revenue				(15,274)
Net cash used in operating activities				(179,428)
Purchase of property and equipment				(817,026)
Deposits on units				250,000
Net cash used in investing activities				(567,026)
Proceeds from notes payable				195,400
Repayments of notes payable				(14,268)
Repayments of royalty notes payable				(65,529)
Repayment of related party notes payable				(54,187)
Proceeds from issuance of common stock				653,099
Net cash provided by financing activities				714,515
Net increase (decrease) in cash				(31,939)
Cash, beginning of period				116,309	116,309
Cash, end of period		$ 84,370		84,370		116,309
Interest				134,105
Income taxes
Common stock and warrants issued for services				14,188
Establishment of debt discount for royalty notes
Preferred stock issued for debt reduction and services				350,000
Previously Reported [Member] | Accumulated Deficit [Member]
Beginning balance				(1,531,330)	(1,531,330)
Shares issued for services
Warrants issued for services
Shares issued related to debt
Shares issued for cash
Shares issued related to anti-dilution
Net loss				(1,308,436)
Ending balance		(2,839,766)		(2,839,766)		(1,531,330)
Restatement Adjustment [Member]
Cash
Total Current Assets
Total Assets
Deferred revenue							7,000
Total Current Liabilities							7,000
Total Liabilities							7,000
Accumulated deficit							(7,000)
Total Stockholder's Equity (Deficit)							(7,000)
Total Liabilities and Stockholders' Equity (Deficit)
Distributorship revenue		43,000		49,000
Total revenue		43,000		49,000
Total cost of revenue
Gross profit		43,000		49,000
Total operating expenses
Loss from operations		43,000		49,000
Total other income (expense)
Loss before provision for income taxes		43,000		49,000
Net loss		43,000		49,000
Deferred revenue				(49,000)
Net cash used in operating activities
Net cash used in investing activities
Net cash provided by financing activities
Net increase (decrease) in cash
Cash, end of period
Restatement Adjustment [Member] | Accumulated Deficit [Member]
Beginning balance				(56,000)	$ (56,000)
Shares issued for services
Warrants issued for services
Shares issued related to debt
Shares issued for cash
Shares issued related to anti-dilution
Net loss				49,000
Ending balance		$ (7,000)		$ (7,000)		$ (56,000)

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Restatements - Schedule of Restated Statements (Details) (Parenthetical) - USD ($)	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Accounting Changes and Error Corrections [Abstract]
Notes payable, debt discount current	$ 7,548	$ 18,729	$ 22,431
Convertible notes payable, debt discount current	5,124	0	3,115
Royalty notes payable, debt discount current			29,393
Notes payable, debt discount noncurrent	$ 8,812	$ 14,473	46,750
Royalty notes payable, debt discount noncurrent			$ 353,894
Preferred stock, par value	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000	20,000,000
Preferred stock, shares issued	1,000,000	1,000,000	1,000,000
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000	100,000,000
Common stock, shares issued	31,611,785	26,223,834	24,057,961

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Segment Reporting (Details Narrative)	9 Months Ended
	Sep. 30, 2018 Installments
Segment Reporting [Abstract]
Number of reportable segments	2
Rental period description	The rental periods range from a few months to 2 years and include a combination of down payments made by the customer and monthly payments paid under the agreements with the Company.

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Segment Reporting - Schedule of Net Sales and Identifiable Operating Income by Segment (Details) - USD ($)		3 Months Ended		9 Months Ended		12 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Gross Profit		$ 222,934	$ 420,598	$ 628,749	$ 841,303
Payroll		240,499	272,900	706,648	457,288
Professional fees		26,175	16,603	114,230	93,505
General and administrative expenses		170,504	269,039	639,598	579,172
Depreciation			90,512		234,654
Interest expense		119,028	145,740	329,586	440,538
Change in fair value of derivative liability			6,474	(9,385)	(11,019)
Loss on extinguishment of debt					(305,000)		$ 116,541
Loss before provision for income taxes		(328,179)	(380,670)	(1,151,928)	(1,257,836)
Provision for income taxes				800	1,600
Net loss		(328,179)	(380,760)	(1,152,728)	(1,259,436)	$ (2,709,315)
Total net property, plant, and equipment assets			925,728		925,728
Monitoring [Member]
Gross Profit	[1]	202,694	336,322	569,244	562,313
Identifiable segment operating expenses	[2]		86,543		143,955
Identifiable segment operating income	[3]	202,694	249,779	569,244	418,358
Total net property, plant, and equipment assets			562,542		562,542
Distributorships [Member]
Gross Profit	[1]	20,240	84,276	59,505	278,990
Identifiable segment operating expenses	[2]		3,552		89,642
Identifiable segment operating income	[3]	20,240	80,724	59,505	189,348
Total net property, plant, and equipment assets			350,298		350,298
Operating Segment [Member]
Gross Profit	[1]	222,934	420,598	628,749	841,303
Identifiable segment operating expenses	[2]		90,095		233,597
Identifiable segment operating income	[3]	222,934	330,503	628,749	607,706
Payroll	[4]	240,499	272,900	706,648	457,288
Professional fees	[4]	26,175	16,603	114,230	93,505
General and administrative expenses	[4]	170,504	269,039	639,598	579,172
Depreciation	[4]		417		1,057
Interest expense	[4]	119,028	145,740	329,586	440,538
Change in fair value of derivative liability	[4]	(5,093)	6,474	(9,385)	(11,018)
Loss on extinguishment of debt	[4]				305,000
Loss before provision for income taxes	[4]	(328,179)	(380,670)	(1,151,928)	(1,257,836)
Provision for income taxes				800	1,600
Net loss		(328,179)	(380,670)	(1,152,728)	(1,259,436)
Total net property, plant, and equipment assets			925,729		925,729
Corporate [Member]
Total net property, plant, and equipment assets			$ 12,889		$ 12,889

[1] Segment gross profit includes segment net sales less segment cost of sales

[2] Identifiable segment operating expenses consists of identifiable depreciation expense

[3] Identifiable segment operating incomes consists of segment gross profit less identifiable operating expense

[4] General corporate expense consists of all other non-identifiable expenses

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Deposits - Schedule of Deposits (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Deposit Assets Disclosure [Abstract]
Lease Deposits	$ 5,131	$ 5,131

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Accrued Expenses - Schedule of Accrued Expense (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Payables and Accruals [Abstract]
Accrued payroll and payroll taxes	$ 6,141	$ 6,141
Deferred rent	5,306	4,945
Other accrued expenses	9,100	5,000
Total	$ 20,547	$ 15,685	$ 235,398

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Deferred Revenue - Schedule of Deferred Revenue (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Deferred revenue	$ 115,551	$ 184,378
Monitoring Deferred Revenues [Member]
Deferred revenue	115,551	177,878
Distributorships Deferred Revenues [Member]
Deferred revenue		$ 6,500

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Notes Payable (Details Narrative) - USD ($)							3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 01, 2017	Oct. 31, 2017	Sep. 30, 2016	Sep. 23, 2016	Mar. 30, 2016	Jan. 20, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Amortization of debt discount									$ 27,704	$ 275,465
Loss on extinguishments of debt										(305,000)		$ 116,541
January 2016 Non-Interest Bearing Note Payable [Member]
Notes payable						$ 65,000
Principal per month, amount						937
Periodic payments, principal						3,531			3,531		$ 3,531
Pay to lender royalty fee per month			$ 1			$ 5
Royalty note, description						The Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers' vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity.
Amortization of debt discount						$ 65,000
Shares of restricted common stock			425,000
Interest expense									0	0
Note for principal balance							$ 55,000		55,000		$ 55,000
Promissory note interest, percentage						0.00%
April 2016 Note [Member]
Principal per month, amount					$ 750
Amortization of debt discount					$ 50,000
Shares of restricted common stock					50,000
Interest expense									6,750	6,750
Note for principal balance					$ 50,000
Convertible debt due date					Jun. 30, 2018
Promissory note interest, percentage					18.00%
Number of restricted shares issued for exchange for cash					$ 50,000
Number of restricted shares issued for exchange					50,000
September 2016 Note [Member]
Notes payable				$ 10,000
Amortization of debt discount				$ 10,000
Interest expense									1,800	1,800
Convertible debt due date		Oct. 31, 2018		Oct. 31, 2017
Promissory note interest, percentage				24.00%
Number of restricted shares issued for exchange for cash				$ 10,000
Number of restricted shares issued for exchange				100,000
December 2017 Note [Member]
Notes payable	$ 50,000
Principal per month, amount	1,733
Amortization of debt discount	$ 22,650
Interest expense									$ 5,111	$ 0
Convertible debt due date	Dec. 01, 2020
Promissory note interest, percentage	15.00%
December 2017 Note [Member] | Third Party [Member]
Notes payable	$ 50,000

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Notes Payable - Schedule of Notes Payable (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Notes payable, gross amount	$ 101,676	$ 114,482
Notes payable, discount	(16,360)	(33,202)
Notes payable, net balance	85,316	81,280
Less: non-current portion, gross	(24,994)	(35,747)
Less: non-current portion, discount	8,812	14,473
Less: non-current portion, net	(16,182)	(21,274)	$ (148,250)
Notes payable, current portion, gross	76,682	78,735
Notes payable, current portion, discount	(7,548)	(18,729)
Notes payable, current portion	69,134	60,006	$ 154,069
January 2016 Non-Interest Bearing Note Payable [Member]
Notes payable, gross amount	940	4,482
Notes payable, discount		(3,889)
Notes payable, net balance	940	593
April 2016 Note [Member]
Notes payable, gross amount	50,000	50,000
Notes payable, discount		(7,292)
Notes payable, net balance	50,000	42,708
September 2016 Note [Member]
Notes payable, gross amount	10,000	10,000
Notes payable, discount
Notes payable, net balance	10,000	10,000
December 2017 Note [Member]
Notes payable, gross amount	40,736	50,000
Notes payable, discount	(16,360)	(22,021)
Notes payable, net balance	$ 24,376	$ 27,979

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Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($)							9 Months Ended	12 Months Ended
	Dec. 01, 2017	Oct. 31, 2017	Sep. 30, 2016	Sep. 23, 2016	Mar. 30, 2016	Jan. 20, 2016	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Common stock shares issued							31,611,785	26,223,834	24,057,961
January 2016 Non-Interest Bearing Note Payable [Member]
Notes payable						$ 65,000
Interest bearing percentage						0.00%
Per month amount						$ 937
Periodic payments, principal						3,531	$ 3,531	$ 3,531
Note for principal balance							$ 55,000	$ 55,000
Restricted of common shares			425,000
January 2016 Non-Interest Bearing Note Payable [Member] | 8 Months Payment Arrangement [Member]
Per month amount						$ 1,250
April 2016 Note [Member]
Interest bearing percentage					18.00%
Per month amount					$ 750
Note for principal balance					$ 50,000
Debt due date					Jun. 30, 2018
Restricted of common shares					50,000
September 2016 Note [Member]
Notes payable				$ 10,000
Interest bearing percentage				24.00%
Debt due date		Oct. 31, 2018		Oct. 31, 2017
Percentage of accrued interest to be converted to common stock				25.00%
December 2017 Note [Member]
Notes payable	$ 50,000
Interest bearing percentage	15.00%
Per month amount	$ 1,733
Debt due date	Dec. 01, 2020
Common stock shares issued	100,000
Exercise price per share	$ 0.25

XML

Notes Payable - Related Parties (Details Narrative) - USD ($)								9 Months Ended		12 Months Ended
	Mar. 01, 2018	Feb. 01, 2018	Feb. 01, 2018	Nov. 01, 2017	Apr. 30, 2017	Sep. 30, 2016	Mar. 29, 2016	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Aug. 01, 2018
Amortization of debt discount								$ 27,704	$ 275,465
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement [Member]
Note for principal balance							$ 55,000
Interest expense, related party debt								0	0
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement [Member] | CEO [Member]
Principal payments, monthly					$ 3,531		$ 937
Royalty note, description			The Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers' vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity.
Amortization of debt discount			$ 55,000
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement [Member] | CEO [Member] | Minimum [Member]
Royalty fee, per month			5
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement [Member] | CEO [Member] | Maximum [Member]
Royalty fee, per month			800
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement Note Two [Member]
Royalty note, description						The Company entered into Amendment No. 1 to Royalty note #2 to amend the royalty provisions of the original note to be $1 for each Device on the road beginning in the 25th month after the date of the Royalty note #2.
Royalty fee, per month						$ 1
Amortization of debt discount						$ 8,959
Restricted common shares						50,000
September 2016, Promissory Note [Member]
Note for principal balance				$ 36,100
September 2016, Promissory Note One [Member]
Note for principal balance				192,000
October 2016, Promissory Note [Member]
Note for principal balance				24,960
November 2016, Promissory Note [Member]
Note for principal balance				5,040
November 2016, Promissory Note One [Member]
Note for principal balance				50,000
November 2016, Promissory Note Two [Member]
Note for principal balance				325,000
January 2017, Promissory Note [Member]
Note for principal balance				50,400
February 2017, Promissory Note [Member]
Note for principal balance				70,000
March 2017, Promissory Note [Member]
Note for principal balance				75,000
November 2017, New Promissory Note [Member]
Note for principal balance				900,000				900,000		$ 900,000
Principal payments, monthly				$ 15,000				15,000		15,000
Interest expense, related party debt								126,229	0
Loan term				60 months
Principal and interest payments				$ 25,000				25,000		25,000
Interest only payments, monthly				$ 10,000				$ 10,000		$ 10,000
Debt instrument, maturity date				Nov. 01, 2022				Nov. 01, 2022		Nov. 01, 2022
November 2017, New Promissory Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance											$ (765,000)
August 2018, New Promissory Note [Member]
Note for principal balance								$ 1,365,000		$ 1,365,000	1,365,000
Interest expense, related party debt								78,448	0
Principal and interest payments								53,500		53,500
Interest only payments, monthly								20,000		20,000
August 2018, New Promissory Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance											1,365,000
February 2018, Promissory Note [Member]
Note for principal balance		$ 100,000	$ 100,000					100,000		$ 100,000
Note for principal balance											(100,000)
Interest expense, related party debt								$ 15,000	0
Note monthly fees		$ 2,500
Debt instrument, maturity date		Feb. 01, 2019						Feb. 01, 2019		Feb. 01, 2019
February 2018, Promissory Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance								$ 100,000		$ 100,000
March 2018 Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance											(765,000)
New Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance	$ 1,365,000										1,365,000
March 2018, Promissory Note [Member]
Note for principal balance	$ 500,000							500,000		$ 500,000
Interest expense, related party debt								$ 58,475	$ 0
Debt instrument, maturity date	Mar. 01, 2023							Mar. 01, 2020		Mar. 01, 2020
March 2018, Promissory Note [Member] | First Year [Member]
Note monthly fees	$ 12,500
March 2018, Promissory Note [Member] | Second Year [Member]
Note monthly fees	12,000
March 2018, Promissory Note [Member] | Third Year [Member]
Note monthly fees	11,500
March 2018, Promissory Note [Member] | Fourth Year [Member]
Note monthly fees	11,000
March 2018, Promissory Note [Member] | Fifth Year [Member]
Note monthly fees	10,500
March 2018, Promissory Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance								$ 500,000		$ 500,000
Note for principal balance	$ (765,000)
March 2018 Convertible Debt [Member]
Note for principal balance											$ (500,000)

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Notes Payable - Related Parties - Schedule of Notes Payable Related Parties (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Total notes payable	$ 1,365,000	$ 884,634
Less: non-current portion	(1,251,250)	(839,306)
Notes payable, current portion	113,750	45,328
Amount [Member]
Total notes payable	1,365,000	890,923
Less: non-current portion	(1,115,000)	(839,306)
Notes payable, current portion	250,000	51,617
Discount [Member]
Total notes payable
Total notes payable		(6,289)
Less: non-current portion
Notes payable, current portion
Notes payable, current portion		(6,289)
Replacement [Member]
Total notes payable
Less: non-current portion	(136,250)
Notes payable, current portion	(136,250)
January 2016 Non-Interest Bearing Note Payable [Member]
Total notes payable
Total notes payable		(366)
January 2016 Non-Interest Bearing Note Payable [Member] | Amount [Member]
Total notes payable		5,923
January 2016 Non-Interest Bearing Note Payable [Member] | Discount [Member]
Total notes payable
Total notes payable		(6,289)
January 2016 Non-Interest Bearing Note Payable [Member] | Replacement [Member]
Total notes payable
November 2017, New Promissory Note [Member]
Total notes payable		885,000
November 2017, New Promissory Note [Member] | Amount [Member]
Total notes payable	765,000	885,000
November 2017, New Promissory Note [Member] | Discount [Member]
Total notes payable
November 2017, New Promissory Note [Member] | Replacement [Member]
Total notes payable	(765,000)
February 2018, Promissory Note [Member]
Total notes payable
February 2018, Promissory Note [Member] | Amount [Member]
Total notes payable	100,000
February 2018, Promissory Note [Member] | Discount [Member]
Total notes payable
February 2018, Promissory Note [Member] | Replacement [Member]
Total notes payable	(100,000)
March 2018, Promissory Note [Member]
Total notes payable
March 2018, Promissory Note [Member] | Amount [Member]
Total notes payable	500,000
March 2018, Promissory Note [Member] | Discount [Member]
Total notes payable
March 2018, Promissory Note [Member] | Replacement [Member]
Total notes payable	(500,000)
August 2018, New Promissory Note [Member]
Total notes payable	1,365,000
August 2018, New Promissory Note [Member] | Amount [Member]
Total notes payable
August 2018, New Promissory Note [Member] | Discount [Member]
Total notes payable
August 2018, New Promissory Note [Member] | Replacement [Member]
Total notes payable	$ 1,365,000

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Notes Payable - Related Parties - Schedule of Notes Payable Related Parties (Details) (Parenthetical)					9 Months Ended	12 Months Ended
	Mar. 01, 2018 USD ($)	Feb. 01, 2018 USD ($)	Nov. 01, 2017 USD ($)	Jan. 20, 2016 USD ($)	Sep. 30, 2018 USD ($) Device	Dec. 31, 2017 USD ($) Installments	Aug. 01, 2018 USD ($)
January 2016 Non-Interest Bearing Note Payable [Member]
Note for principal balance					$ 55,000	$ 55,000
Principal payments, monthly				$ 3,531	3,531	3,531
Principal and interest payments				$ 937
January 2016 Non-Interest Bearing Note Payable [Member] | Four Months [Member]
Principal payments, monthly					937	937
January 2016 Non-Interest Bearing Note Payable [Member] | Five Months [Member]
Principal payments, monthly					1,250	1,250
November 2017, New Promissory Note [Member]
Note for principal balance			$ 900,000		900,000	900,000
Principal payments, monthly			15,000		$ 15,000	$ 15,000
Interest payable monthly installments					60	60
Principal and interest payments			$ 25,000		$ 25,000	$ 25,000
Debt instrument, maturity date			Nov. 01, 2022		Nov. 01, 2022	Nov. 01, 2022
Interest only payments, monthly			$ 10,000		$ 10,000	$ 10,000
February 2018, Promissory Note [Member]
Note for principal balance		$ 100,000			$ 100,000	$ 100,000
Debt instrument, maturity date		Feb. 01, 2019			Feb. 01, 2019	Feb. 01, 2019
Note fee payment					$ 2,500	$ 2,500
February 2018, Promissory Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance					100,000	100,000
March 2018, Promissory Note [Member]
Note for principal balance	$ 500,000				$ 500,000	$ 500,000
Debt instrument, maturity date	Mar. 01, 2023				Mar. 01, 2020	Mar. 01, 2020
March 2018, Promissory Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance					$ 500,000	$ 500,000
March 2018, Promissory Note [Member] | First Year [Member]
Note fee payment					12,500	12,500
March 2018, Promissory Note [Member] | Second Year [Member]
Note fee payment					12,000	12,000
March 2018, Promissory Note [Member] | Third Year [Member]
Note fee payment					11,500	11,500
March 2018, Promissory Note [Member] | Fourth Year [Member]
Note fee payment					11,000	11,000
March 2018, Promissory Note [Member] | Fifth Year [Member]
Note fee payment					10,500	105,000
August 2018, New Promissory Note [Member]
Note for principal balance					1,365,000	1,365,000	$ 1,365,000
Principal and interest payments					53,500	53,500
Interest only payments, monthly					20,000	20,000
August 2018, New Promissory Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance							$ 1,365,000
November 2017, Promissory Note [Member] | Agreement for Replacement of Note [Member]
Note for principal balance					$ 765,000	$ 765,000

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Convertible Notes Payable (Details Narrative)					1 Months Ended	9 Months Ended
	Mar. 09, 2018 USD ($)	Nov. 01, 2017 USD ($) $ / shares shares	May 06, 2016 USD ($) shares	Aug. 07, 2015 USD ($) Installments $ / shares shares	Jun. 30, 2018 shares	Sep. 30, 2018 USD ($) shares	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Convertible notes						$ 14,692		$ 10,489
Amortization of debt discount						$ 27,704	$ 275,465
Accrued interest converted to shares common stock | shares						32,812
Expected Dividend Rate [Member]
Warrants measurement input		0.00		0.00
Price Volatility [Member]
Warrants measurement input		3.73		1.00
Risk Free Interest Rate [Member]
Warrants measurement input		0.0237		0.0108
Convertible Debenture Due On August 7, 2017 [Member]
Interest bearing percentage				7.50%
Convertible notes				$ 15,000		$ 7,500		7,500
Convertible debt due date				Aug. 07, 2017
Percentage of accrued interest to be converted to common stock				70.00%
Debt instrument, convertible, terms of conversion feature				On August 7, 2015, the Company entered into an agreement with a third party non-affiliate and issued a 7.5% interest bearing convertible debenture for $15,000 due on August 7, 2017, with conversion features commencing after 180 days following the date of the note. Payments of interest only were due monthly beginning September 2015. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading days prior to the conversion date.
Amortization of debt discount				$ 5,770
Conversion of debt			$ 7,500
Common stock conversion shares | shares			30,000
Warrants outstanding | shares				30,000
Warrants exercise price | $ / shares				$ 0.50
Warrants, term				3 years
Additional discount on debt				$ 4,873
Interest expense						422	422
Convertible Debenture Due on October 27, 2020 [Member]
Interest bearing percentage		10.00%
Convertible notes		$ 5,000						2,989
Convertible debt due date		Oct. 27, 2020
Percentage of accrued interest to be converted to common stock		61.00%
Debt instrument, convertible, terms of conversion feature		The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion.
Amortization of debt discount		$ 5,000
Warrants outstanding | shares		10,000
Warrants exercise price | $ / shares		$ 1.00
Warrants, term		4 years
Additional discount on debt		$ 2,099
Interest expense						250	0
Accrued interest converted to shares common stock | shares					32,812
Convertible Debenture Due on October 27, 2020 [Member] | Total Discount [Member]
Amortization of debt discount		6,825
Convertible Debenture Due on October 27, 2020 [Member] | Expenses Related Beneficial Feature [Member]
Amortization of debt discount		$ 1,825
Convertible Debenture Due on March 9, 2021 [Member]
Interest bearing percentage	10.00%
Convertible notes	$ 20,000					7,192
Convertible debt due date	Mar. 09, 2021
Percentage of accrued interest to be converted to common stock	61.00%
Debt instrument, convertible, terms of conversion feature	The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion.
Amortization of debt discount	$ 20,000
Interest expense						$ 1,126	$ 0
Convertible Debenture Due on March 9, 2021 [Member] | Total Discount [Member]
Amortization of debt discount	47,768
Convertible Debenture Due on March 9, 2021 [Member] | Expenses Related Beneficial Feature [Member]
Amortization of debt discount	$ 27,768

XML

Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($)	Sep. 30, 2018	Mar. 09, 2018	Dec. 31, 2017	Nov. 01, 2017	Sep. 30, 2017	Dec. 31, 2016	Aug. 07, 2015
Convertible notes, gross amount	$ 27,500		$ 12,500
Convertible notes, discount	(12,808)		(2,011)
Convertible notes, net balance	14,692		10,489
Less: non-current portion, gross amount	(20,000)		(5,000)
Less: non-current portion, discount	7,684		1,483
Less: non-current portion, net	(12,316)		(3,517)
Convertible notes, current portion, gross amount	7,500		7,500
Convertible notes, current portion, discount	(5,124)		(528)
Convertible notes, current portion	2,376		6,972		$ 54,385
Convertible Debenture Due On August 7, 2017 [Member]
Convertible notes, gross amount	7,500		7,500
Convertible notes, discount
Convertible notes, net balance	7,500		7,500				$ 15,000
Convertible Debenture Due on October 27, 2020 [Member]
Convertible notes, gross amount			5,000
Convertible notes, discount			(2,011)
Convertible notes, net balance			2,989	$ 5,000
Convertible Debenture Due on March 9, 2021 [Member]
Convertible notes, gross amount	20,000
Convertible notes, discount	(12,808)
Convertible notes, net balance	$ 7,192	$ 20,000

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Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Convertible notes	$ 14,692	$ 10,489
August 2015 Convertible Notes Payable [Member]
Convertible notes	$ 15,000	$ 15,000
Interest bearing percentage	7.50%	7.50%
Convertible debt due date	Aug. 07, 2017	Aug. 07, 2017
November 2017 Convertible Notes Payable [Member]
Convertible notes	$ 5,000	$ 5,000
Interest bearing percentage	10.00%	10.00%
Convertible debt due date	Oct. 27, 2020	Oct. 27, 2020
March 2018 Convertible Notes Payable [Member]
Convertible notes	$ 20,000	$ 20,000
Interest bearing percentage	10.00%	10.00%
Convertible debt due date	Mar. 09, 2021	Mar. 09, 2021

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Derivative Liabilities (Details Narrative) - USD ($)	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017	Nov. 30, 2017	Aug. 31, 2015
Convertible notes	$ 14,692		$ 10,489
Derivative [Member] | Expected Dividend Rate [Member]
Warrants measurement input		0.00%		0.00%	0.00%
Derivative [Member] | Price Volatility [Member]
Warrants measurement input		160.00%		312.00%	100.00%
Derivative [Member] | Risk Free Interest Rate [Member]
Warrants measurement input		2.49%		2.37%	0.61%
August 2015 Convertible Debenture [Member] | Derivative [Member]
Convertible notes					$ 15,000
Convertible debt, fair value					$ 15,000
Warrants, term					1 year 6 months 29 days
November 2017 Convertible Debenture [Member] | Derivative [Member]
Convertible notes				$ 5,000
Convertible debt, fair value				$ 5,000
Warrants, term				3 years
March 2018 Convertible Debenture [Member] | Derivative [Member]
Convertible notes		$ 20,000
Convertible debt, fair value		$ 20,000
Warrants, term		2 years 5 months 9 days

XML

Derivative Liabilities - Schedule of Derivative Liabilities (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Derivative liability	$ 18,287	$ 12,302
August 2015 Convertible Debt [Member]
Derivative liability	3,599	7,310
November 2017 Convertible Debt [Member]
Derivative liability		4,992
March 2018 Convertible Debt [Member]
Derivative liability	$ 14,688

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Derivative Liabilities - Schedule of Derivative Liabilities (Details) (Parenthetical) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
August 2015 Convertible Debt [Member]
Convertible debt	$ 15,000	$ 15,000
November 2017 Convertible Debt [Member]
Convertible debt	5,000	5,000
March 2018 Convertible Debt [Member]
Convertible debt	$ 20,000	$ 20,000

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Derivative Liabilities - Schedule of Revalue of Derivatives Using Black Scholes Model (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Derivative liability	$ 18,287		$ 18,287		$ 12,302
Additions			15,370
Changes	5,093	$ (6,474)	9,385	$ 11,018
August 2015 Convertible Debt [Member]
Derivative liability	3,599		3,599		7,310
Additions
Changes			(3,711)
November 2017 Convertible Debt [Member]
Derivative liability					4,992
Additions
Changes			(4,992)
March 2018 Convertible Debt [Member]
Derivative liability	$ 14,688		14,688
Additions			15,370
Changes			$ (682)

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Derivative Liabilities - Schedule of Revalue of Derivatives Using Black Scholes Model (Details) (Parenthetical) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
August 2015 Convertible Debt [Member]
Convertible debt	$ 15,000	$ 15,000
November 2017 Convertible Debt [Member]
Convertible debt	5,000	5,000
March 2018 Convertible Debt [Member]
Convertible debt	$ 20,000	$ 20,000

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Accrued Royalties Payable (Details Narrative) - USD ($)					1 Months Ended
	Nov. 01, 2017	Nov. 04, 2016	Sep. 30, 2016	Mar. 29, 2016	Jan. 31, 2016	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Notes payable - related party						$ 113,750	$ 45,328
January 2016 Royalty Agreement [Member]
Notes payable					$ 65,000
Royalty fee					5
Due to related parties					$ 1
March 2016 Royalty Agreement [Member]
Royalty fee				$ 5
Due to related parties				1
Notes payable - related party				$ 55,000
September and November 2016 Royalty Agreements [Member]
Notes payable - related party		$ 325,000	$ 192,000
September and November 2016 Royalty Agreements [Member] | Minimum [Member]
Royalty fee		1	1
September and November 2016 Royalty Agreements [Member] | Maximum [Member]
Royalty fee		$ 2	$ 2
November 2017 Royalty Agreement [Member]
Notes payable - related party	$ 900,000
Royalty fee description	Under the royalty agreement, the Company is required to pay a royalty fee of from $1.50 to $3.00 per month for every ignition interlock devise that the Company has on the road in customers' vehicles, the amount depending on how many devices are installed.

XML

Accrued Royalties Payable - Schedule of Accrued Royalties (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Total accrued royalties	$ 254,711	$ 179,993
January 2016 Royalty Agreement [Member]
Total accrued royalties	113,941	86,230
March 2016 Royalty Agreement [Member]
Total accrued royalties	126,318	88,010
September and November 2016 Royalty Agreements [Member]
Total accrued royalties	(5,203)	5,753
November 2017 Royalty Agreement [Member]
Total accrued royalties	8,530
Auguest 2018 Royalty Agreement [Member]
Total accrued royalties	$ 11,125

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Stockholders' Equity (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended		12 Months Ended
	Mar. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Preferred stock, shares authorized		20,000,000	20,000,000	20,000,000
Preferred stock, par value		$ 0.001	$ 0.001	$ 0.001
Number of preferred stock shares issued, value		$ 458,705	$ 653,099	$ 849,037
Preferred stock, shares issued		1,000,000	1,000,000	1,000,000
Common stock, shares authorized		100,000,000	100,000,000	100,000,000
Common stock, par value		$ 0.0001	$ 0.0001	$ 0.0001
Shares issued for services, value		$ 110,201	$ 13,913	$ 13,913
Debt conversion, converted instrument, shares issued		32,812
Debt conversion, converted instrument, amount		$ 5,083
Common stock, shares issued		31,611,785	24,057,961	26,223,834
Royalty Notes [Member]
Stock issued during period, shares		538,256
Common Stockholders [Member]
Stock issued during period, shares		4,340,883
Number of preferred stock shares issued, value		$ 458,705
Common stock voting rights		Holders of common stock are entitled to one vote for each share held.
Shares issued for services, shares		476,000
Shares issued for services, value		$ 110,200
Series A Preferred Stock [Member]
Preferred stock, shares authorized		1,000,000
Preferred stock, voting rights		Series A Preferred stock will have one hundred (100) votes on all matters
Stock issued during period, shares
Number of preferred stock shares issued, value
Preferred stock, shares issued		1,000,000
Shares issued for services, shares
Shares issued for services, value
Series A Preferred Stock [Member] | Material Definitive Agreement [Member] | Officer and Director [Member]
Stock issued during period, shares	1,000,000
Number of preferred stock shares issued, value	$ 350,000

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Warrants (Details Narrative) - Warrant [Member]	Sep. 30, 2018 $ / shares
Minimum [Member]
Warrant expiration	3 years
Warrant exercise price	$ 0.10
Maximum [Member]
Warrant expiration	4 years
Warrant exercise price	$ 1.00

XML

Warrants - Schedule of Warrant Activity (Details) - Warrant [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Warrants for common shares, outstanding, beginning balance	4,857,176	160,000
Warrants for common shares, Granted	930,410	4,697,176
Warrants for common shares, Exercised
Warrants for common shares, Forfeited, cancelled, expired
Warrants for common shares, Outstanding, ending balance	5,787,586	4,857,176
Weighted average exercise price, beginning balance	$ 0.51	$ 0.53
Weighted average exercise price, Granted	1.35	0.51
Weighted average exercise price, Exercised
Weighted average exercise price, Forfeited, cancelled, expired
Weighted average exercise price, ending balance	$ 0.60	$ 0.51
Weighted Average Remaining Contractual Life Warrants Outstanding, Beginning	3 years 2 months 8 days	1 year 11 months 19 days
Weighted Average Remaining Contractual Life Warrants Outstanding, Granted	4 years	4 years
Weighted Average Remaining Contractual Life Warrants Outstanding Ending	2 years 7 months 2 days	3 years 2 months 8 days
Aggregate Intrinsic Value Outstanding Beginning	$ 412,864
Aggregate Intrinsic Value Outstanding Ending		$ 412,864

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Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Total anti-dilutive weighted average shares	5,942,776	5,512,380	5,942,776	5,512,380
Preferred Shares [Member]
Total anti-dilutive weighted average shares
Convertible Notes [Member]
Total anti-dilutive weighted average shares	155,190	375,082	155,190	375,082
Warrants [Member]
Total anti-dilutive weighted average shares	5,787,586	5,137,298	5,787,586	5,137,298
Options [Member]
Total anti-dilutive weighted average shares

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Income (Loss) Per Share - Schedule of Dilutive Securities of Common Shares Outstanding (Details)	9 Months Ended
	Sep. 30, 2018 shares
Total potential shares	37,554,561
Common Shares [Member]
Total potential shares	31,611,785
Preferred Shares [Member]
Total potential shares
Convertible Notes [Member]
Total potential shares	155,190
Warrants [Member]
Total potential shares	5,787,586
Options [Member]
Total potential shares

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Commitments and Contingencies (Details Narrative) - USD ($)	Aug. 28, 2017	Dec. 01, 2016
Lease term		4 years
Lease amount per month		$ 2,200
Maximum provision for escalating		$ 2,404
B3 Investments, LLC [Member]
Lease term	1 year
Lease amount per month	$ 1,350
Lease description	The Company entered into a one-year lease with B3 Investments, LLC for a storefront location at Suites D104 and D105, 2406 24th Street, South Phoenix, Arizona. Base rent under the lease is $1,350 per month plus 2% ($27) rental tax.
Rental tax	$ 27
Percentage of rental tax rate	2.00%

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Related Party Transactions (Details Narrative)	9 Months Ended
	Sep. 30, 2018 USD ($) shares
David Haridim [Member]
Number of warrants granted	50,000
Doheny Group [Member]
Notes payable | $	$ 1,365,000
Number of common stock granted	3,208,017
Doheny Group [Member] | Anti-dilution Shares [Member]
Number of common stock granted	1,294,865
Doheny Group [Member] | Notes Payable [Member]
Number of common stock granted	1,863,152

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Settlement with Distributor (Details Narrative) - Distributor Member [Member] - Distributorship Agreement [Member]	Jan. 21, 2018 Device	Dec. 31, 2017 USD ($)
Number of interlock units | Device	900
Distributor revenue and accounts receivable | $		$ 35,979

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Subsequent Events (Details Narrative) - USD ($)														1 Months Ended	12 Months Ended
	Jun. 03, 2019	May 01, 2019	Mar. 04, 2019	Feb. 19, 2019	Feb. 01, 2019	Jan. 15, 2019	Jan. 11, 2019	Jan. 03, 2019	Dec. 31, 2018	Dec. 17, 2018	Dec. 01, 2018	Oct. 11, 2018	Oct. 04, 2018	Dec. 31, 2018	Dec. 31, 2018	Jun. 03, 2020	May 01, 2020	Mar. 04, 2020	Feb. 19, 2020	Feb. 01, 2020	Jan. 15, 2020	Jan. 11, 2020	Jan. 03, 2020	Dec. 31, 2019	Dec. 17, 2019	Jan. 30, 2019
Loan Agreement [Member] | The Doheny Group [Member] | Scenario Forecast [Member]
Debt balloon payment																$ 89,000	$ 20,000	$ 10,000	$ 5,000	$ 15,000	$ 14,500	$ 40,000	$ 32,700	$ 23,000	$ 6,000
Subsequent Event [Member] | Rafael Mavashev [Member] | Promissory Note [Member]
Convertible debenture									$ 10,000					$ 10,000	$ 10,000
Accrued interest									1,000					1,000	1,000
Subsequent Event [Member] | Edris [Member] | Royalty Note [Member]
Convertible debenture									65,000					65,000	65,000
Royalty expense															3,000
Subsequent Event [Member] | Oren Azulay [Member] | Promissory Note One [Member]
Convertible debenture									50,000					50,000	50,000
Accrued interest									13,000					13,000	13,000
Subsequent Event [Member] | The Doheny Group [Member] | CEO [Member]
Sale of stock, consideration									$ 30,000
Subsequent Event [Member] | The Doheny Group [Member] | CEO [Member] | Common Stock [Member]
Sale of stock, number of shares issued in transaction									8,924,000
Subsequent Event [Member] | The Doheny Group [Member] | CEO [Member] | Preferred Stock [Member]
Sale of stock, number of shares issued in transaction									1,000,000
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member]
Advance from loan amount													$ 72,800
Principal and interest payments														$ 11,527
Debt payment description														On December 31, 2018, Michael Wainer released the Company from payment of the loan.
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member] | Twelve Months [Member]
Interest and fees on loan													37,128
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member] | First Six Months [Member]
Principal and interest payments													11,527
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member] | Final Six Months [Member]
Principal and interest payments													6,795
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member] | Kabbage [Member]
Loan amount													$ 72,800
Subsequent Event [Member] | Loan Agreement [Member] | Forward Financing [Member]
Loan amount							$ 49,581					$ 60,000
Interest and fees on loan												$ 18,600
Debt payment description												Payments of $561.43 were automatically paid each business day starting October 15, 2018 and were to be for 140 days business days.
Agreed to settle loan amount												$ 30,806
Subsequent Event [Member] | Loan Agreement [Member] | The Doheny Group [Member]
Loan amount	$ 89,000	$ 20,000	$ 10,000	$ 5,000	$ 15,000	$ 14,500		$ 32,700	$ 23,000	$ 6,000				$ 23,000	$ 23,000
Advance from loan amount							$ 40,000
Debt payment description											Therefore, the royalty will become $5.00 per unit on all units in perpetuity, the loan amount has increased to $2,000,000, as of December 1, 2018 payment of $20,000 was not made and the loan amount became $2,020,000, a new monthly payment of $50,500 interest only will be due as of January 1, 2019, if the full $50,500 cannot be paid, then a partial payment will be made with the unpaid amount added to the principal, and a balloon payment of the balance of principal owed shall be made on December 1, 2023.
Increased loan amount											$ 2,000,000
Debt monthly interest											50,500
Loan payment due											$ 20,000
Debt interest rate	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%				0.00%	0.00%
Debt monthly payment
Subsequent Event [Member] | Loan Agreement [Member] | Lucky Draw, LLC [Member]
Accrued interest																										$ 50,000