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 March 31, 2019

[  ] 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 30, 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

PART I – FINANCIAL INFORMATION		3
ITEM 1	Financial Statements	3
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	27
ITEM 4	Controls and Procedures	27
PART II – OTHER INFORMATION		29
ITEM 1	Legal Proceedings	29
ITEM 1A	Risk Factors	29
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	29
ITEM 3	Defaults Upon Senior Securities	29
ITEM 4	Mine Safety Disclosures	29
ITEM 5	Other Information	30
ITEM 6	Exhibits	31

2

PART I – FINANCIAL INFORMATION

ITEM 1 Financial Statements

The consolidated balance sheets as of March 31, 2019 (unaudited) and December 31, 2018, the consolidated statements of operations for the three months ended March 31, 2019 and 2018, the consolidated statement of stockholders equity (deficit) for the three months ended March 31, 2019, and the consolidated statements of cash flows for the three months ending March 31, 2019 and 2018, 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.

3

BLOW & DRIVE INTERLOCK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	March 31, 2019			December 31, 2018
ASSETS
Current Assets:
Cash	$	24,565		$	775
Accounts receivable		11,830			5,355
Prepaid expenses		2,539			1,016
Total current assets		38,934			7,146
Deposits		6,481			6,481
Total assets	$	45,415		$	13,627
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accrued expenses	$	35,548		$	65,988
Accrued royalty payable		42,185			26,885
Accrued interest		23,582			17,155
Accrued interest – related parties		342,118			190,618
Deferred revenue		20,445			92,162
Derivative liability		24,349			22,517
Notes payable, net of debt discount of $0 and $7,549 at March 31, 2019 and December 31, 2018, respectively		67,159			117,776
Notes payable to related parties		29,000			29,000
Convertible notes payable, net of $5,124 and $5,124 at March 31, 2019 and December 31, 2018, respectively		2,376			2,376
Total current liabilities		586,762			564,477
Non-current Liabilities:
Notes payable, less current portion and net of debt discount of $0 and $6,925 at March 31, 2019 and December 31, 2018, respectively		-			18,069
Notes payable to related parties, less current portion		2,137,200			2,020,000
Convertible notes, less current portion and net of $5,122 and $5,122 at March 31, 2019 and December 31, 2018, respectively		14,878			13,597
Total non-current liabilities		2,152,078			2,051,666
Total Liabilities		2,738,840			2,616,143
Commitments and Contingencies
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 March 31, 2019 and December 31, 2018, respectively		1,000			1,000
Common stock, par value $0.0001, 100,000,000 shares authorized, 30,566,920 and 31,073,529 shares issued or issuable and outstanding as of March 31, 2019 and December 31, 2018, respectively		3,057			3,107
Additional paid-in capital		3,514,249			3,489,699
Accumulated deficit		(6,211,731	)		(6,096,322	)
Total stockholders’ deficit		(2,693,425	)		(2,602,516	)
Total liabilities and stockholders’ deficit	$	45,415		$	13,627

See accompanying notes to unaudited condensed consolidated financial statements.

4

BLOW & DRIVE INTERLOCK CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,
	2019			2018
Revenues:
Monitoring revenues	$	213,687		$	178,486
Distributorship revenues		17,691			23,170
Total revenues		231,378			201,656
Cost of revenues:
Monitoring cost of revenue		21,635			47,613
Distributorship cost of revenue		-			-
Total cost of revenues		21,635			47,613
Gross profit		209,743			154,043
Operating expenses:
Payroll		98,040			236,412
Professional fees		41,546			37,092
General and administrative		60,074			249,554
Total operating expenses		199,660			523,058
Loss from operations		10,083			(369,015	)
Other Income (Expense):
Interest expense, net		(176,824	)		(102,321	)
Change in fair value of derivative liability		(1,832	)		(7,286	)
Gain (loss) on extinguishment of debt		54,764			-
Total other income (expense)		(123,892	)		(109,607	)
Loss before provision for income taxes		(113,809	)		(478,622	)
Provision for income taxes		1,600			-
Net loss	$	(115,409	)	$	(478,622	)
Earnings (loss) per share:
Basic and diluted	$	(0.00	)	$	(0.02	)
Weighted-average shares of common stock outstanding:
Basic and diluted		30,447,549			26,814,201

See accompanying notes to unaudited condensed consolidated financial statements.

5

BLOW & DRIVE INTERLOCK CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

	Preferred Stock - Sries A				Common Stock						Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount			Capital		Deficit			Deficit
Balance at 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			114,595		-			114,643
Shares issued for cash		-		-		4,340,883			434			458,271		-			458,705
Shares issued for conversion of debt		-		-		32,812			3			5,080		-			5,083
Net loss		-		-		-						-		(1,799,677	)		(1,799,677	)
Balance at December 31, 2018		1,000,000		1,000		31,073,529			3,107			3,489,699		(6,096,322	)		(2,602,516	)
Shares issued for services		-		-		250,000			25			24,475		-			24,500
Shares returned related to anti-dilution		-		-		(756,609	)		(75	)		75		-			-
Net loss		-		-		-			-			-		(115,409	)		(115,409	)
Balance at March 31, 2019		1,000,000	$	1,000		30,566,920		$	3,057		$	3,514,249	$	(6,211,731	)	$	(2,693,425	)

See accompanying notes to unaudited condensed consolidated financial statements.

6

BLOW & DRIVE INTERLOCK CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31,
	2019			2018
Cash flows from operating activities:
Net loss	$	(115,409	)	$	(478,622	)
Adjustments to reconcile net loss to net cash used in operating activities
Stock or warrants issued for services		24,500			105,000
Allowance for doubtful accounts		-			(26,541	)
Amortization of debt discount		15,754			18,447
Increase in derivative liabilities		-			(15,370	)
Change in fair value of derivative liability		1,832			22,657
(Gain)/loss on extinguishment of debt		(54,764	)		-
Changes in operating assets and liabilities
Accounts receivable		(6,475	)		55,457
Prepaid expenses		(1,523	)		(725	)
Accounts payable		-			(18,850	)
Accrued expenses		(30,440	)		8,576
Accrued royalties payable		15,300			27,942
Accrued interest		9,621			1,616
Accrued interest related party		151,500			8,898
Deferred revenue		(71,717	)		(8,601	)
Net cash used in operating activities		(61,821	)		(300,116	)
Cash flows from financing activities:
Proceeds from issuance of common stock		-			156,500
Proceeds from issuance of notes payable		-			21,600
Principal payments on notes payable		(31,589	)		(19,850	)
Proceeds from issuance of convertible notes payable		-			20,000
Proceeds from issuance of notes payable related party		117,200			600,127
Payments on note payable related party		-			(66,050	)
Net cash provided by financing activities		85,611			712,327
Net increase in cash		23,790			412,211
Cash at beginning of period		775			31,874
Cash at end of period	$	24,565		$	444,085
Supplemental discolsures of cash flow information
Cash paid during the period for:
Interest paid	$	-		$	73,359
Income taxes paid	$	800		$	800
Supplemental disclosure of non-cash investing and financing activities
Common stock and warrants issued for services	$	24,500		$	105,000

See accompanying notes to unaudited condensed consolidated financial statements.

7

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. 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.

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.

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 March 31, 2019, the Company had an accumulated deficit of $6,211,731 and net loss of $115,409 for the three months ended March 31, 2019. 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.

8

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.

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

On January 1, 2018, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance.

The Company’s principal activity from which it generates revenue is a service which is the use of its interlock units. Revenue is measured based on considerations specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid at time of sale via credit card, check, or cash when the interlock units are installed on customers’ vehicles

9

A performance obligation is a promise in a contract to provide a distinct service to the customer, which for the Company is transfer of a service to customers. Performance obligations promised in a contract are identified based on the services that will be provided to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the service is separately identifiable from other promises in the contract. The Company has concluded the services accounted for as the single performance obligation.

The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods to the customer. The Company does not issue refunds.

The Company recognizes revenue when it satisfies a performance obligation in a contract by providing a service to a customer when the Company installs the interlock units on the customers’ vehicles. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from 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 are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $0 and $16,861 for the three months ended March 31, 2019 and 2018, 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 March 31, 2019 and December 31, 2018 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 9. 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. The Company wrote off $255,030 in accrued royalties to gain on extinguishment of debt in December 2018 due to the December 31, 2018 settlement with two royalty noteholders in which they relinquished all claims to accrued royalties.

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.

10

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:

Description	Level 1		Level 2		Level 3
Balance December 31, 2018	$	-	$	22,517	$	-
Change in fair value of derivative liability		-		1,832		-
Balance March 31, 2019	$	-	$	24,349	$	-

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.

11

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 three months ended March 31, 2019, one distributor, licensed in one state, makes up 100% percent of all revenues from distributors at March 31, 2019. 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.

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, 2019, 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.

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Recently Issued Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This standard removes, modifies, and adds certain disclosure requirements for fair value measurements. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. While the Company is currently in the process of evaluating the effects of this standard on the consolidated financial statements, the Company plans to adopt ASU No. 2018-13 in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company’s accounting for the service element of a hosting arrangement that is a service contract is not affected by the proposed amendments and will continue to be expensed as incurred in accordance with existing guidance. This standard does not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service contracts. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company plans to adopt the updated disclosure requirements of ASU No. 2018-15 prospectively in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial.

Other recently issued accounting updates are not expected to have a material impact on the Company’s Interim Financial Statements.

NOTE 3 – 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 March 31, 2019 and December 31, 2018.

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.

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

	Three Months Ended March 31,
	2019			2018
Segment gross profit (a):
Monitoring	$	192,052		$	130,873
Distributorships		17,691			23,170
Gross profit		209,743			154,043
Identifiable segment operating expenses (b):
Monitoring		-			-
Distributorships		-			-
		-			-
Identifiable segment operating income (c):
Monitoring		192,052			130,873
Distributorships		17,691			23,170
		209,743			154,043
Reconciliation of identifiable segment income to corporate income (d):
Payroll		98,040			236,412
Professional fees		41,546			37,092
General and administrative expenses		60,074			249,554
Interest expense		176,824			102,321
Change in fair value of derivative liability		1,832			7,286
Gain on extinguishment of debt		(54,764	)		-
		323,552			632,665
Loss before provision for income taxes		(113,809	)		(478,622	)
Provision for income taxes		1,600			-
Net loss	$	(115,409	)	$	(478,622	)
Total net property, plant, and equipment assets
Monitoring	$	-		$	-
Distributorships		-			-
Corporate		-			-
	$	-		$	-

(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

NOTE 4 – ACCRUED EXPENSES

Accrued Expenses consist of the following:

Description	March 31, 2019		December 31, 2018
Accrued payroll and payroll taxes	$	20,885	$	17,616
Deferred rent		-		5,317
Income tax payable		7,530		5,930
Other accrued expenses		7,133		37,125
Total	$	35,548	$	65,988

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NOTE 5 – NOTES PAYABLE

Notes payable consist of the following:

	As of March 31, 2019						As of December 31, 2018
Terms	Amount		Discount		Net Balance		Amount			Discount			Net Balance
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		$	(14,474	)	$	26,262
October 2018 ($60,000) - $561 daily principal and interest until paid in full		-		-		-		42,424			-			42,424
October 2018 ($72,800) - $11,527 monthly principal and interest for first six months, $9,975 monthly principal and interest last six months		67,159		-		67,159		67,159			-			67,159
Total notes payable		67,159		-		67,159		150,319			(14,474	)		135,845
Less: non-current portion		-		-		-		(24,994	)		6,925			(18,069	)
Notes payable, current portion	$	67,159	$	-	$	67,159	$	125,325		$	(7,549	)	$	117,776

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. In January 2019, the note was settled with no additional payment. $43,930 was recognized as a gain on settlement.

Total interest expense was $0 and $1,833 for the three months ended March 31, 2019 and 2018, respectively.

October 2018 - $60,000

On October 11, 2018, the Company provided an agreement to a third party to obtain a $60,000 promissory note in exchange for $59,105 in cash ($895 in processing fee was deducted from cash). The promissory note had a maturity date of May 5, 2019 and bears interest at 55% per annum. The note required total payments of $561.43 each business day. The note was settled on January 16, 2019 for $30,806, and a gain on settlement was recorded for $10,834.

Total interest expense was $339 and $0 for the three months ended March 31, 2019 and 2018, respectively.

October 2018 - $72,800

On October 4, 2018, the Company provided an agreement to a third party to obtain a $72,800 promissory note in exchange for $72,800 in cash. The promissory note had a maturity date of October 4, 2019 and bears interest at 51% per annum. The note required total payments of $11,526.67 per month for the first six months and $6,794.67 per month for the last six months.

Total interest expense was $8,563 and $0 for the three months ended March 31, 2019 and 2018, respectively.

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NOTE 6 – NOTES PAYABLE TO RELATED PARTIES

Notes payable to related parties consist of the following:

Terms	March 31, 2019			December 31, 2018
August 2018 ($1,365,000) – Replaced August 2018 note ($1,365,000) that replaced November 2017 note ($765,000 balance at August 1, 2018), February 2018 note ($100,000) and March 2018 note ($500,000). Includes $635,000 penalty on default of August 2018 ($1,365,000) note and $20,000 for missed payment on August 2018 note. Interest only monthly payment of $50,500 for life of note. Entire principal due December 1, 2023.	$	2,020,000		$	2,020,000
December 2018 ($6,000) – No interest with principal due on December 17, 2019.		6,000			6,000
December 2018 ($23,000) – No interest with principal due on December 13, 2019.		23,000			23,000
January 2019 ($32,700) – No interest with principal due on January 3, 2020.		32,700			-
January 2019 ($40,000) – No interest with principal due on January 11, 2020.		40,000			-
January 2019 ($14,500) – No interest with principal due on January 15, 2020.		14,500			-
February 2019 ($15,000) – No interest with principal due on February 1, 2020.		15,000			-
February 2019 ($5,000) – No interest with principal due on February 19, 2020.		5,000			-
March 2019 ($10,000) – No interest with principal due on March 4, 2020.		10,000			-
Total notes payable to related parties		2,166,200			2,049,000
Less: non-current portion		(2,137,200	)		(2,020,000	)
Notes payable to related parties, current portion	$	29,000		$	29,000

December 2018 - $2,222,000

On December 1, 2018, the Company entered into an agreement with a related third party to replace the August 2018 note of $1,365,000 with a new note for $2,020,000. The new note also includes a default penalty of $635,000 on the August 2018 note and $20,000 for a missed payment on the August 2018 note. The note calls for interest only payments of $50,500 per month for the life of the note. The entire principal is due on December 1, 2023. Accrued interest payments totaling $202,000 were not made by the Company. Per the note agreement, this amount was added to the principal, thus increasing the principal amount to $2,222,000.

Total interest expense was $151,500 and $0 for the three months ended March 31, 2019 and 2018, respectively.

December 2018 - $6,000

On December 17, 2018, the Company entered into an agreement with a related party, Doheny Group, to obtain a $6,000 loan. The note bears no interest and is due in full on December 17, 2019.

December 2018 - $23,000

On December 31, 2018, the Company entered into an agreement with a related party, Doheny Group, to obtain a $23,000 loan. The note bears no interest and is due in full on December 31, 2019.

January 2019 - $32,700

On January 3, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $32,700 loan. The note bears no interest and is due in full on January 3, 2020.

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January 2019 - $40,000

On January 11, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $40,000 loan. The note bears no interest and is due in full on January 11, 2020.

January 2019 - $14,500

On January 15, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $14,500 loan. The note bears no interest and is due in full on January 15, 2020.

February 2019 - $15,000

On February 1, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $15,000 loan. The note bears no interest and is due in full on February 1, 2020.

February 2019 - $5,000

On February 19, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $5,000 loan. The note bears no interest and is due in full on February 19, 2020.

March 2019 - $10,000

On March 4, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $10,000 loan. The note bears no interest and is due in full on March 4, 2020.

NOTE 7 – CONVERTIBLE NOTES PAYABLE

Convertible notes payable consists of the following:

	As of March 31, 2019									As of December 31, 2018
Terms	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
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			(10,246	)		9,754			20,000			(11,527	)		8,473
Total convertible notes payable		27,500			(10,246	)		17,254			27,500			(11,527	)		15,973
Less: non-current portion		(20,000	)		5,122			(14,878	)		(20,000	)		6,403			(13,597	)
Convertible notes payable, current portion	$	7,500		$	(5,124	)	$	2,376		$	7,500		$	(5,124	)	$	2,376

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.

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Total interest expense was $141 and $141 for the three months ended March 31, 2019 and 2018, 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 March 31, 2018, this note has not been converted.

Total interest expense was $500 and $126 for the three months ended March 31, 2019 and 2018, respectively.

NOTE 8 – DERIVATIVE LIABILITIES

Derivative liabilities consisted of the following:

	March 31, 2019		December 31, 2018
August 2015 - $15,000 convertible debt	$	9,133	$	6,523
March 2018 - $20,000 convertible debt		15,216		15,994
Total derivative liabilities	$	24,349	$	22,517

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%.

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 the Black Sholes Model to determine the initial relative fair values of the $20,000 convertible note with expected term of 3.35 years, expected dividend rate of 0%, volatility of 413% and risk free interest rate 2.90%.

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, 2018 and March 31, 2019.

	Balance							Balance
	at 12/31/18		Additions		Changes			at 03/31/19
August 2015 - $15,000 convertible debt	$	6,523	$	-	$	2,610		$	9,133
March 2018 - $20,000 convertible debt		15,994		-		(778	)		15,216
Total	$	22,517	$	-	$	1,832		$	24,349

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NOTE 9 – ACCRUED ROYALTY PAYABLE

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

● 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.

● August 2018 Royalty Agreement – the Company entered into a royalty agreement with a related party on August 1, 2018 in relation to a note payable of $1,365,000. This note replaced the November 2017 Royalty Agreement as well as other, non-royalty notes payable. Under the royalty agreement, the Company is required to pay $1.50 and accrue an additional $3.50 for every ignition interlock devise for the first nine months of the note payable. After the first nine months, the Company is required to pay $1.50 per devise and the amount accrued during the first nine months will be paid monthly through the next twelve months. After the note payable is paid in full, the Company is required to pay $3.00 per devise in perpetuity.

● December 2018 royalty Agreement – the Company entered into a royalty agreement with a related party on December 1, 2018 in relation to a note payable of $2,020,000. This note replaced the August 2018 Royalty Agreement. Under the royalty agreement, the Company is required to pay a royalty fee of $5.00 per month for every ignition interlock device that the Company has on the road in customers’ vehicles.

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

	March 31, 2019		December 31, 2018
November 2017 royalty agreement	$	3,327	$	3,327
August 2018 royalty agreement		18,058		18,058
December 2018 royalty agreement		20,800		5,500
Total accrued royalties	$	42,185	$	26,885

Royalty expense was $15,300 and $42,529 for the three months ended March 31, 2019 and 2018, respectively.

NOTE 10 – 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 March 31, 2019, 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 three months ended March 31, 2019, the Company issued 250,000 additional shares of its common stock for services valued at $24,500. The total number of shares issued or issuable as of March 31, 2019 was 30,659,244.

NOTE 11 – STOCK 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, 2017		5,607,176	$	0.51	$	3.19		412,864
Granted		930,410		1.29		4.00		(412,864	)
Exercised		-		-		-		-
Forfeited, cancelled, expired		-		-		-		-
Outstanding as of December 31, 2018		6,537,586	$	0.51	$	3.19		-
Granted		-		1.29		4.00		-
Exercised		-		-		-
Forfeited, cancelled, expired		-		-		-
Outstanding as of March 31, 2019		6,537,586	$	0.55	$	2.35		-

NOTE 12 – 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 March 31,
	2019		2018
Preferred shares		-		-
Convertible notes		408,375		57,296
Warrants		6,537,586		5,182,176
Options		-		-
Total anti-dilutive weighted average shares		6,945,961		5,239,472

If all dilutive securities had been exercised at March 31, 2019, the total number of common shares outstanding would be as follows:

Common Shares	30,566,920
Preferred Shares	-
Convertible notes	408,375
Warrants	6,537,586
Options	-
Total potential shares	37,512,881

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NOTE 13 – 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. The Company moved into the offices of David Haridim effective January 1, 2019. David Haridim is not charging the Company rent.

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 14 – RELATED PARTY TRANSACTIONS

The Company had the following related party transactions:

● Notes payable of $2,166,200 to the Doheny Group at March 31, 2019 (refer to notes payable related party section)

● 2,669,761 shares of common stock, of which 1,863,152 were granted to the Doheny Group in relation to notes payable.

NOTE 15 – 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 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.

On July 10, 2019, the Company entered into a loan agreement with The Doheny Group for $13,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $13,000 on June 10, 2020.

On July 18, 2019, the Company entered into a loan agreement with The Doheny Group for $8,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $8,000 on June 18, 2020.

On July 26, 2019, the Company entered into a loan agreement with The Doheny Group for $25,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $25,000 on July 26, 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, 2018, we generated total revenues of $942,160, compared to $1,235,433 in the year ending December 31, 2017. For the three months ended March 31, 2019 and 2018, we had total revenues of $231,378 and $201,656, respectively, and a net loss of $115,409 and $478,622, 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.

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 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. As of March 31, 2019, we had approximately 901 units on the road, with approximately 739 devices being leased directly from us and approximately 162 devices leased through our distributors.

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 March 31, 2019 (Unaudited) Compared to Three Months Ended March 31, 2018 (Unaudited)

	Three Months Ended
	March 31, 2019						March 31, 2018						Changes
	Amount			% of Revenue			Amount			% of Revenue			Amount			%
Revenues:
Monitoring revenues	$	213,687			92.4	%	$	178,486			88.5	%	$	35,201			19.7	%
Distributorship revenues		17,691			7.6	%		23,170			11.5	%		(5,479	)		-23.6	%
Total revenues		231,378			100.0	%		201,656			100.0	%		29,722			14.7	%
Cost of revenues:
Monitoring cost of revenue		21,635			9.4	%		47,613			23.6	%		(25,978	)		-54.6	%
Distributorship cost of revenue		-			0.0	%		-			0.0	%		-			n/a
Total cost of revenues		21,635			9.4	%		47,613			23.6	%		(25,978	)		-54.6	%
Gross profit		209,743			90.6	%		154,043			76.4	%		55,700			36.2	%
Operating expenses:
Payroll		98,040			42.4	%		236,412			117.2	%		(138,372	)		-58.5	%
Professional fees		41,546			18.0	%		37,092			18.4	%		4,454			12.0	%
General and administrative		60,074			26.0	%		249,554			123.8	%		(189,480	)		-75.9	%
Total operating expenses		199,660			86.3	%		523,058			259.4	%		(323,398	)		-61.8	%
Loss from operations		10,083			4.4	%		(369,015	)		-183.0	%		379,098			-102.7	%
Other Income (Expense):
Interest expense, net		(176,824	)		-76.4	%		(102,321	)		-50.7	%		(74,503	)		72.8	%
Change in fair value of derivative liability		(1,832	)		-0.8	%		(7,286	)		-3.6	%		5,454			-74.9	%
Gain (loss) on extinguishment of debt		54,764			23.7	%		-			0.0	%		54,764			n/a
Total other income (expense)		(123,892	)		-53.5	%		(109,607	)		-54.4	%		(14,285	)		13.0	%
Loss before provision for income taxes		(113,809	)		-49.2	%		(478,622	)		-237.3	%		364,813			-76.2	%
Provision for income taxes		1,600			0.7	%		-			0.0	%		1,600			n/a
Net loss	$	(115,409	)		-49.9	%	$	(478,622	)		-237.3	%	$	363,213			-75.9	%

Operating Loss; Net Loss

Our net loss decreased by $363,213, from ($478,622) for the three months ended March 31, 2018 to ($115,409) for the three months ended March 31, 2019. Our operating gain (loss) decreased by $379,098, from ($369,015) to $10,083 for the same periods. The decrease in our net loss for the three months ended March 31, 2019, compared to the three months ended March 31, 2018, is primarily the result of higher revenue, lower cost of revenues, lower general and administrative expenses, lower payroll and a gain on extinguishment of debt, partially offset by increases professional fees and interest expense, net. These changes are detailed below.

Revenue

Monitoring Revenues. Monitoring revenues increased by $35,201, or 19.7%, to $213,687 in the first quarter of fiscal 2019 from $178,486 in the first quarter last year. The increase is due to increase in number of 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 first quarter of fiscal 2019 compared to first quarter of last year.

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Distributorship Revenues. Distributorship revenues decreased by $5,479, or 23.6%, to $17,691 in the first quarter of fiscal 2019 from $23,170 in the first quarter last year. The decrease is due to us decreasing the number of distributors that market and leases our products, which resulted in the increase in revenues from monitoring.

Cost of Revenue

Our cost of revenue for the three months ended March 31, 2019 was $21,635, compared to $47,613 for the three months ended March 31, 2018. Our cost of revenue for the three months ended March 31, 2019 and March 31, 2018, was completely related to our monthly monitoring services we provide to our customers. The decrease in our cost of revenue was due to the fact we ordered more parts and supplies from our supplier in the period in 2018 compared to the period in 2019.

Payroll

Payroll expense decreased by $138,372, or 58.5%, to $98,040 in the first quarter of fiscal 2019 from $236,412 in the first quarter last year. The decrease in payroll is due to controlling overhead expenses and decreasing personnel in the first quarter of fiscal 2019 compared to first quarter of last year.

Professional Fees

Professional fees increased by $4,454, or 12.0%, to $41,546 in the first quarter of fiscal 2019 from $37,092 in the first quarter last year. 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.

General and Administrative Expenses

General and administrative expenses decreased by $189,480, or 75.90%, to $60,074 in the first quarter of fiscal 2019 from $249,554 in the first quarter last year. The decrease is due to the following:

● Decrease of approximately $27,000 in royalty expense in the first quarter of fiscal 2019 compared to first quarter last year.

● Decrease of approximately $121,000 in software expense as we did not have any software services in the first quarter of fiscal 2019 compared to first quarter of last year.

● Decrease of approximately $31,000 in investor relations.

Interest Expense

Interest expense increased by $74,503, or 72.8%, to $176,824 in the first quarter of fiscal 2019 from $102,321 in the first quarter last year. The increase is due to increase in loans from related parties.

Change in Fair Value of Derivative Liability

During the three months ended March 31, 2019, we had a change in fair value of derivative liability of ($1,832) compared to ($7,286) for the three months ended March 31, 2018. The change in fair value of derivative liability in the three months ended March 31, 2019, relates to the conversion feature of a promissory note we had outstanding during this period. Change in fair value of derivative liability results from changes in valuation at end of the reporting period. 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.

Gain on Extinguishment of Debt

Our gain on extinguishment of debt of $54,764 for the three months ended March 31, 2019 resulted from forgiveness and settlement of debt in the first quarter of fiscal 2019. We did not have a corresponding gain on extinguishment of debt in first fiscal quarter of 2018.

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Liquidity and Capital Resources for the Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

Introduction

Our cash on hand as of March 31, 2019 was $24,566, compared to $775 at December 31, 2018. During the three months ended March 31, 2019 and 2018, 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.

Our cash, current assets, total assets, current liabilities, and total liabilities as of March 31, 2019 and as of December 31, 2018, respectively, are as follows:

	March 31, 2019		December 31, 2017		Change
Cash	$	24,565	$	775	$	23,790
Total current assets	$	38,934	$	7,146	$	31,788
Total assets	$	45,515	$	13,627	$	31,788
Total current liabilities	$	586,782	$	564,477	$	22,305
Total liabilities	$	2,738,840	$	2,616,143	$	122,697

Our current assets increased as of March 31, 2019 as compared to December 31, 2018, primarily due to us having more cash on hand and accounts receivable at March 31, 2019. The increase in our total assets between the two periods was also primarily related to us having more cash on hand and accounts receivable at March 31, 2019.

Our current liabilities increased slightly as of March 31, 2019 as compared to December 31, 2018. This increase was primarily due to increases in our accrued royalty payable, accrued interest, accrued interest-related party, and derivative liability, offset by decreases in accrued expenses, deferred revenue, and accounts payable, net of debt discount.

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

Our cash flows from operating, investing and financing activities are summarized as follows:

	Three Monthe Ended March 31,
	2019			2018			Changes
Net cash provided by (used in):
Operating activities	$	(61,821	)	$	(300,116	)	$	238,295
Financing activities		85,611			712,327			(626,716	)
Net increase in cash	$	23,790		$	412,211		$	(388,421	)

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Operations

We had net cash used in operating activities of $61,821 for the three months ended March 31, 2019, as compared to $300,116 for the three months ended March 31, 2018. For the period in 2019, the net cash used in operating activities consisted primarily of our net income (loss) of ($115,409), adjusted primarily by a non-cash change in fair value of derivative liability of $1,832, shares issued for services of $24,500, gain on extinguishment of debt of ($54,764), and amortization of debt discount of $15,754, as well as changes in, accrued expenses of ($30,440), accounts receivable ($6,457), prepaid expenses of ($1,523), deferred revenue of ($71,717), accrued royalties payable of $15,300, accrued interest, related party of $151,500, and accrued interest of $9,621. For the period in 2018, the net cash used in operating activities consisted primarily of our net income (loss) of ($478,622), an allowance for doubtful accounts of ($26,541), increase in derivative liabilities of ($15,370), adjusted primarily by a non-cash change in fair value of derivative liability of $22,657, shares issued for services of $105,000, and amortization of debt discount of $18,447, as well as changes in, accounts payable of ($18,850), accrued expenses of $8,576, accounts receivable of $55,457, prepaid expenses of ($725), deferred revenue of ($8,601), accrued royalties payable of $27,942, accrued interest, related party of $8,896, and accrued interest of $1,616.

Investments

We did not have any cash provided by/used in investing activities in the three months ended March 31, 2019 or March 31, 2018.

Financing

We had net cash provided by financing activities for the three months ended March 31, 2019 of $85,611, compared to $712,327 for the three months ended March 31, 2018. For the three months ended March 31, 2019, our net cash from financing activities consisted of proceeds from related party notes payable of $117,200, partially offset by repayments of notes payable of $31,589. For the three months ended March 31, 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 $156,500, partially offset by repayments of notes payable of $19,850, and repayments of related party notes payable of $66,050.

Critical Accounting Estimates

As discussed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended December 30, 2018, we consider our estimates on inventory valuation, long-lived assets and self-insurance liabilities to be the most critical in understanding the judgments that are involved in preparing our consolidated financial statements. There have been no significant changes to these estimates in the three months ended March 31, 2019.

Our adoption of ASC 606, Revenue Recognition, did not change the way the Company recognized revenue for the first quarter 2019 compared to same quarter of last year.

Recently Issued Accounting Updates

See Note 2 to the Interim Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.

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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 March 31, 2019, 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 March 31, 2019 under the supervision and with the participation of our principal executive officer and our principal financial officer.

Based upon our evaluation, our principal executive and financial officer concluded that, as of March 31, 2019, 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

On January 2, 2019, the largest holder of our common stock, as well as our sole officer and director, Mr. Laurence Wainer (“Wainer”), closed the transaction that was the subject of an Agreement to Purchase Common Stock and Preferred Stock (the “Agreement”) between Wainer and The Doheny Group, LLC, a Nevada limited liability company (“Doheny Group”), under which Doheny Group acquired 8,924,000 shares of our common stock (the “Common Shares”) and One Million (1,000,000) shares of our Series A Preferred Stock (the “Preferred Shares” and together with the Common Shares, the “Shares”), from Wainer in exchange for $30,000. Combined, the Shares represent approximately 84% of our outstanding voting rights. Mr. David Haridim is the principal of Doheny and was appointed to our Board of Directors and as our sole executive officer. Mr. Haridim became our Chief Financial Officer. Mr. Haridim does not have a finance or accounting background and, as a result, we continued to utilize an outside consulting firm to assist with the preparation of our financial statements.

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Other than as mentioned above, 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 March 31, 2019, 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 March 31, 2019, 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 March 31, 2019 and identified the following material weaknesses, which are outlined further in our Annual Report on Form 10-K for the year ended December 31, 2018:

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 March 31, 2019, we issued the following unregistered securities:

During the quarter ended March 31, 2019, we issued 250,000 shares of our common stock for services rendered to the company. The shares were valued at $24,500. 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.

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.

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ITEM 5 Other Information

Agreement to Purchase Common Stock and Preferred Stock

On January 2, 2019, the largest holder of our common stock, as well as our sole officer and director, Mr. Laurence Wainer (“Wainer”), closed the transaction that was the subject of an Agreement to Purchase Common Stock and Preferred Stock (the “Agreement”) between Wainer and The Doheny Group, LLC, a Nevada limited liability company (“Doheny Group”), under which Doheny Group acquired 8,924,000 shares of our common stock (the “Common Shares”) and One Million (1,000,000) shares of our Series A Preferred Stock (the “Preferred Shares” and together with the Common Shares, the “Shares”), from Wainer in exchange for $30,000. Combined, the Shares represent approximately 84% of our outstanding voting rights. Mr. David Haridim is the principal of Doheny and was appointed to our Board of Directors and as our sole executive officer. We were a party to the Agreement solely for the purpose of acknowledging certain representations and warranties about the company in the Agreement. The description of the Agreement set forth in this report is qualified in its entirety by reference to the full text of that document, which is attached as Exhibit 10.25 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Effective upon the closing of the transaction that was the subject of the Agreement on January 2, 2019, our executive officer prior to the closing, Laurence Wainer (former President, Chief Executive Officer, Chief Financial Officer and Secretary) tendered his resignation from all positions then held with our company. Concurrent with his resignation, our Board of Directors appointed Mr. David Haridim as the President, Chief Executive Officer, Chief Financial Officer and Secretary.

Our newly appointed executive officer will serve in his positions as an “at will” employee of our company, and will not have a formal employment agreement with us unless and until our Board of Directors, or a committee thereof, and the applicable executive officer have approved the terms of any such agreement. For the foreseeable future, Mr. Haridim will not receive any compensation for serving as our sole executive officer.

David Haridim, age 36, was appointed as our President, Chief Executive Officer, Chief Financial Officer and Secretary on January 2, 2019. He was also appointed to our Board of Directors on the same date. Mr. Haridim has been the Manager of The Doheny Group, LLC since January 2016. The Doheny Group, LLC invests in private and public companies in different industries and Mr. Haridim, as the Manager of The Doheny Group analyzes and approves any and all investments made by The Doheny Group, LLC. Mr. Haridim attended Southwestern School of Law, graduating with a J.D. in 2012.

Effective upon the closing of the transaction that was the subject of the Agreement on January 2, 2019, our sole director prior to the Merger, Laurence Wainer, (i) resigned as a director, and (ii) appointed as our new director, Mr. David Haridim.

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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

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10.18 (11)	Agreement with Abraham Summers and Gnossis International, LLC
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, 2019)
10.25 (15)	Agreement to Purchase Common Stock 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.

(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.

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(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 September 11, 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.

33

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: August 02, 2019		/s/ David Haridim
	By:	David Haridim
		President (Principal Executive Officer)

34

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: August 02, 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: August 02, 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 March 31, 2019, 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: August 02, 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 March 31, 2019, 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: August 02, 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	3 Months Ended
	Mar. 31, 2019	Jul. 30, 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	Mar. 31, 2019
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	Q1
Document Fiscal Year Focus	2019

XML

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current Assets:
Cash	$ 24,565	$ 775
Accounts receivable	11,830	5,355
Prepaid expenses	2,539	1,016
Total current assets	38,934	7,146
Deposits	6,481	6,481
Total assets	45,415	13,627
Current Liabilities:
Accrued expenses	35,548	65,988
Accrued royalty payable	42,185	26,885
Accrued interest	23,582	17,155
Accrued interest - related parties	342,118	190,618
Deferred revenue	20,445	92,162
Derivative liability	24,349	22,517
Notes payable, net of debt discount of $0 and $7,549 at March 31, 2019 and December 31, 2018, respectively	67,159	117,776
Notes payable to related parties	29,000	29,000
Convertible notes payable, net of $5,124 and $5,124 at March 31, 2019 and December 31, 2018, respectively	2,376	2,376
Total current liabilities	586,762	564,477
Non-current Liabilities:
Notes payable, less current portion and net of debt discount of $0 and $6,925 at March 31, 2019 and December 31, 2018, respectively		18,069
Notes payable to related parties, less current portion	2,137,200	2,020,000
Convertible notes, less current portion and net of $5,122 and $5,122 at March 31, 2019 and December 31, 2018, respectively	14,878	13,597
Total non-current liabilities	2,152,078	2,051,666
Total Liabilities	2,738,840	2,616,143
Commitments and Contingencies
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 March 31, 2019 and December 31, 2018, respectively	1,000	1,000
Common stock, par value $0.0001, 100,000,000 shares authorized, 30,566,920 and 31,073,529 shares issued or issuable and outstanding as of March 31, 2019 and December 31, 2018, respectively	3,057	3,107
Additional paid-in capital	3,514,249	3,489,699
Accumulated deficit	(6,211,731)	(6,096,322)
Total stockholders' deficit	(2,693,425)	(2,602,516)
Total liabilities and stockholders' deficit	$ 45,415	$ 13,627

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Notes payable, debt discount current	$ 0	$ 7,549
Convertible notes payable, current	5,124	5,124
Notes payable, debt discount noncurrent	0	6,925
Convertible notes payable, noncurrent	$ 5,122	$ 5,122
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	30,566,920	31,073,529
Common stock, shares outstanding	30,566,920	31,073,529

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues:
Total revenues	$ 231,378	$ 201,656
Cost of revenues:
Total cost of revenues	21,635	47,613
Gross profit	209,743	154,043
Operating expenses:
Payroll	98,040	236,412
Professional fees	41,546	37,092
General and administrative	60,074	249,554
Total operating expenses	199,660	523,058
Loss from operations	10,083	(369,015)
Other Income (Expense):
Interest expense, net	(176,824)	(102,321)
Change in fair value of derivative liability	(1,832)	(7,286)
Gain (loss) on extinguishment of debt	54,764
Total other income (expense)	(123,892)	(109,607)
Loss before provision for income taxes	(113,809)	(478,622)
Provision for income taxes	1,600
Net loss	$ (115,409)	$ (478,622)
Earnings (loss) per share: Basic and diluted	$ (0.00)	$ (0.02)
Weighted-average shares of common stock outstanding: Basic and diluted	30,447,549	26,814,201
Monitoring Revenues [Member]
Revenues:
Total revenues	$ 213,687	$ 178,486
Distributorship Revenues [Member]
Revenues:
Total revenues	17,691	23,170
Monitoring Cost of Revenue [Member]
Cost of revenues:
Total cost of revenues	21,635	47,613
Distributoship Cost of Revenue [Member]
Cost of revenues:
Total cost of revenues

XML

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($)	Series A Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Beginning Balance at Dec. 31, 2017	$ 1,000	$ 2,622	$ 2,911,753	$ (4,296,645)	$ (1,381,270)
Beginning Balance, shares at Dec. 31, 2017	1,000,000	26,223,834
Shares issued for services		$ 48	114,595		114,643
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 for conversion of debt		$ 3	5,080		5,083
Shares issued for conversion of debt, shares		32,812
Net loss				(1,799,677)	(1,799,677)
Ending Balance at Dec. 31, 2018	$ 1,000	$ 3,107	3,489,699	(6,096,322)	(2,602,516)
Ending Balance, shares at Dec. 31, 2018	1,000,000	31,073,529
Shares issued for services		$ 25	24,475		24,500
Shares issued for services, shares		250,000
Shares returned related to anti-dilution		$ (75)	75
Shares returned related to anti-dilution, shares		(756,609)
Net loss				(115,409)	(115,409)
Ending Balance at Mar. 31, 2019	$ 1,000	$ 3,057	$ 3,514,249	$ (6,211,731)	$ (2,693,425)
Ending Balance, shares at Mar. 31, 2019	1,000,000	30,566,920

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Cash flows from operating activities:
Net loss	$ (115,409)	$ (478,622)	$ (1,799,677)
Adjustments to reconcile net loss to net cash used in operating activities
Stock or warrants issued for services	24,500	105,000
Allowance for doubtful accounts		(26,541)
Amortization of debt discount	15,754	18,447
Increase in derivative liabilities		(15,370)
Change in fair value of derivative liability	1,832	22,657	(1,832)
(Gain)/loss on extinguishment of debt	(54,764)
Changes in operating assets and liabilities
Accounts receivable	(6,475)	55,457
Prepaid expenses	(1,523)	(725)
Accounts payable		(18,850)
Accrued expenses	(30,440)	8,576
Accrued royalties payable	15,300	27,942
Accrued interest	9,621	1,616
Accrued interest related party	151,500	8,898
Deferred revenue	(71,717)	(8,601)
Net cash used in operating activities	(61,821)	(300,116)
Cash flows from financing activities:
Proceeds from issuance of common stock		156,500
Proceeds from issuance of notes payable		21,600
Principal payments on notes payable	(31,589)	(19,850)
Proceeds from issuance of convertible notes payable		20,000
Proceeds from issuance of notes payable related party	117,200	600,127
Payments on note payable related party		(66,050)
Net cash provided by financing activities	85,611	712,327
Net increase in cash	23,790	412,211
Cash at beginning of period	775	31,874	31,874
Cash at end of period	24,565	444,085	$ 775
Supplemental disclosures of cash flow information
Cash paid during the period for: Interest paid		73,359
Cash paid during the period for: Income taxes paid	800	800
Supplemental disclosure of non-cash investing and financing activities
Common stock and warrants issued for services	$ 24,500	$ 105,000

XML

Organization and Nature of Business

3 Months Ended

Mar. 31, 2019

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. 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.

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

3 Months Ended

Mar. 31, 2019

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 March 31, 2019, the Company had an accumulated deficit of $6,211,731 and net loss of $115,409 for the three months ended March 31, 2019. 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.

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

On January 1, 2018, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance.

The Company’s principal activity from which it generates revenue is a service which is the use of its interlock units. Revenue is measured based on considerations specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid at time of sale via credit card, check, or cash when the interlock units are installed on customers’ vehicles

A performance obligation is a promise in a contract to provide a distinct service to the customer, which for the Company is transfer of a service to customers. Performance obligations promised in a contract are identified based on the services that will be provided to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the service is separately identifiable from other promises in the contract. The Company has concluded the services accounted for as the single performance obligation.

The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods to the customer. The Company does not issue refunds.

The Company recognizes revenue when it satisfies a performance obligation in a contract by providing a service to a customer when the Company installs the interlock units on the customers’ vehicles. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from 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 are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $0 and $16,861 for the three months ended March 31, 2019 and 2018, 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 March 31, 2019 and December 31, 2018 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 9. 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. The Company wrote off $255,030 in accrued royalties to gain on extinguishment of debt in December 2018 due to the December 31, 2018 settlement with two royalty noteholders in which they relinquished all claims to accrued royalties.

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:

Description	Level 1		Level 2		Level 3
Balance December 31, 2018	$	-	$	22,517	$	-
Change in fair value of derivative liability		-		1,832		-
Balance March 31, 2019	$	-	$	24,349	$	-

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.

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 three months ended March 31, 2019, one distributor, licensed in one state, makes up 100% percent of all revenues from distributors at March 31, 2019. 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.

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, 2019, 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 August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This standard removes, modifies, and adds certain disclosure requirements for fair value measurements. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. While the Company is currently in the process of evaluating the effects of this standard on the consolidated financial statements, the Company plans to adopt ASU No. 2018-13 in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company’s accounting for the service element of a hosting arrangement that is a service contract is not affected by the proposed amendments and will continue to be expensed as incurred in accordance with existing guidance. This standard does not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service contracts. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company plans to adopt the updated disclosure requirements of ASU No. 2018-15 prospectively in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial.

Other recently issued accounting updates are not expected to have a material impact on the Company’s Interim Financial Statements.

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Segment Reporting

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Segment Reporting

NOTE 3 – 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 March 31, 2019 and December 31, 2018.

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 March 31,
	2019			2018
Segment gross profit (a):
Monitoring	$	192,052		$	130,873
Distributorships		17,691			23,170
Gross profit		209,743			154,043
Identifiable segment operating expenses (b):
Monitoring		-			-
Distributorships		-			-
		-			-
Identifiable segment operating income (c):
Monitoring		192,052			130,873
Distributorships		17,691			23,170
		209,743			154,043
Reconciliation of identifiable segment income to corporate income (d):
Payroll		98,040			236,412
Professional fees		41,546			37,092
General and administrative expenses		60,074			249,554
Interest expense		176,824			102,321
Change in fair value of derivative liability		1,832			7,286
Gain on extinguishment of debt		(54,764	)		-
		323,552			632,665
Loss before provision for income taxes		(113,809	)		(478,622	)
Provision for income taxes		1,600			-
Net loss	$	(115,409	)	$	(478,622	)
Total net property, plant, and equipment assets
Monitoring	$	-		$	-
Distributorships		-			-
Corporate		-			-
	$	-		$	-

(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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Accrued Expenses

3 Months Ended

Mar. 31, 2019

Payables and Accruals [Abstract]

Accrued Expenses

NOTE 4 – ACCRUED EXPENSES

Accrued Expenses consist of the following:

Description	March 31, 2019		December 31, 2018
Accrued payroll and payroll taxes	$	20,885	$	17,616
Deferred rent		-		5,317
Income tax payable		7,530		5,930
Other accrued expenses		7,133		37,125
Total	$	35,548	$	65,988

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Notes Payable

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Notes Payable

NOTE 5 – NOTES PAYABLE

Notes payable consist of the following:

	As of March 31, 2019						As of December 31, 2018
Terms	Amount		Discount		Net Balance		Amount			Discount			Net Balance
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		$	(14,474	)	$	26,262
October 2018 ($60,000) - $561 daily principal and interest until paid in full		-		-		-		42,424			-			42,424
October 2018 ($72,800) - $11,527 monthly principal and interest for first six months, $9,975 monthly principal and interest last six months		67,159		-		67,159		67,159			-			67,159
Total notes payable		67,159		-		67,159		150,319			(14,474	)		135,845
Less: non-current portion		-		-		-		(24,994	)		6,925			(18,069	)
Notes payable, current portion	$	67,159	$	-	$	67,159	$	125,325		$	(7,549	)	$	117,776

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. In January 2019, the note was settled with no additional payment. $43,930 was recognized as a gain on settlement.

Total interest expense was $0 and $1,833 for the three months ended March 31, 2019 and 2018, respectively.

October 2018 - $60,000

On October 11, 2018, the Company provided an agreement to a third party to obtain a $60,000 promissory note in exchange for $59,105 in cash ($895 in processing fee was deducted from cash). The promissory note had a maturity date of May 5, 2019 and bears interest at 55% per annum. The note required total payments of $561.43 each business day. The note was settled on January 16, 2019 for $30,806, and a gain on settlement was recorded for $10,834.

Total interest expense was $339 and $0 for the three months ended March 31, 2019 and 2018, respectively.

October 2018 - $72,800

On October 4, 2018, the Company provided an agreement to a third party to obtain a $72,800 promissory note in exchange for $72,800 in cash. The promissory note had a maturity date of October 4, 2019 and bears interest at 51% per annum. The note required total payments of $11,526.67 per month for the first six months and $6,794.67 per month for the last six months.

Total interest expense was $8,563 and $0 for the three months ended March 31, 2019 and 2018, respectively.

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Notes Payable to Related Parties

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Notes Payable to Related Parties

NOTE 6 – NOTES PAYABLE TO RELATED PARTIES

Notes payable to related parties consist of the following:

Terms	March 31, 2019			December 31, 2018
August 2018 ($1,365,000) – Replaced August 2018 note ($1,365,000) that replaced November 2017 note ($765,000 balance at August 1, 2018), February 2018 note ($100,000) and March 2018 note ($500,000). Includes $635,000 penalty on default of August 2018 ($1,365,000) note and $20,000 for missed payment on August 2018 note. Interest only monthly payment of $50,500 for life of note. Entire principal due December 1, 2023.	$	2,020,000		$	2,020,000
December 2018 ($6,000) – No interest with principal due on December 17, 2019.		6,000			6,000
December 2018 ($23,000) – No interest with principal due on December 13, 2019.		23,000			23,000
January 2019 ($32,700) – No interest with principal due on January 3, 2020.		32,700			-
January 2019 ($40,000) – No interest with principal due on January 11, 2020.		40,000			-
January 2019 ($14,500) – No interest with principal due on January 15, 2020.		14,500			-
February 2019 ($15,000) – No interest with principal due on February 1, 2020.		15,000			-
February 2019 ($5,000) – No interest with principal due on February 19, 2020.		5,000			-
March 2019 ($10,000) – No interest with principal due on March 4, 2020.		10,000			-
Total notes payable to related parties		2,166,200			2,049,000
Less: non-current portion		(2,137,200	)		(2,020,000	)
Notes payable to related parties, current portion	$	29,000		$	29,000

December 2018 - $2,222,000

On December 1, 2018, the Company entered into an agreement with a related third party to replace the August 2018 note of $1,365,000 with a new note for $2,020,000. The new note also includes a default penalty of $635,000 on the August 2018 note and $20,000 for a missed payment on the August 2018 note. The note calls for interest only payments of $50,500 per month for the life of the note. The entire principal is due on December 1, 2023. Accrued interest payments totaling $202,000 were not made by the Company. Per the note agreement, this amount was added to the principal, thus increasing the principal amount to $2,222,000.

Total interest expense was $151,500 and $0 for the three months ended March 31, 2019 and 2018, respectively.

December 2018 - $6,000

On December 17, 2018, the Company entered into an agreement with a related party, Doheny Group, to obtain a $6,000 loan. The note bears no interest and is due in full on December 17, 2019.

December 2018 - $23,000

On December 31, 2018, the Company entered into an agreement with a related party, Doheny Group, to obtain a $23,000 loan. The note bears no interest and is due in full on December 31, 2019.

January 2019 - $32,700

On January 3, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $32,700 loan. The note bears no interest and is due in full on January 3, 2020.

January 2019 - $40,000

On January 11, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $40,000 loan. The note bears no interest and is due in full on January 11, 2020.

January 2019 - $14,500

On January 15, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $14,500 loan. The note bears no interest and is due in full on January 15, 2020.

February 2019 - $15,000

On February 1, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $15,000 loan. The note bears no interest and is due in full on February 1, 2020.

February 2019 - $5,000

On February 19, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $5,000 loan. The note bears no interest and is due in full on February 19, 2020.

March 2019 - $10,000

On March 4, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $10,000 loan. The note bears no interest and is due in full on March 4, 2020.

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Convertible Notes Payable

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Convertible Notes Payable

NOTE 7 – CONVERTIBLE NOTES PAYABLE

Convertible notes payable consists of the following:

	As of March 31, 2019									As of December 31, 2018
Terms	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
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			(10,246	)		9,754			20,000			(11,527	)		8,473
Total convertible notes payable		27,500			(10,246	)		17,254			27,500			(11,527	)		15,973
Less: non-current portion		(20,000	)		5,122			(14,878	)		(20,000	)		6,403			(13,597	)
Convertible notes payable, current portion	$	7,500		$	(5,124	)	$	2,376		$	7,500		$	(5,124	)	$	2,376

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 $141 and $141 for the three months ended March 31, 2019 and 2018, 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 March 31, 2018, this note has not been converted.

Total interest expense was $500 and $126 for the three months ended March 31, 2019 and 2018, respectively.

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Derivative Liabilities

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liabilities

NOTE 8 – DERIVATIVE LIABILITIES

Derivative liabilities consisted of the following:

	March 31, 2019		December 31, 2018
August 2015 - $15,000 convertible debt	$	9,133	$	6,523
March 2018 - $20,000 convertible debt		15,216		15,994
Total derivative liabilities	$	24,349	$	22,517

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%.

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 the Black Sholes Model to determine the initial relative fair values of the $20,000 convertible note with expected term of 3.35 years, expected dividend rate of 0%, volatility of 413% and risk free interest rate 2.90%.

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, 2018 and March 31, 2019.

	Balance							Balance
	at 12/31/18		Additions		Changes			at 03/31/19
August 2015 - $15,000 convertible debt	$	6,523	$	-	$	2,610		$	9,133
March 2018 - $20,000 convertible debt		15,994		-		(778	)		15,216
Total	$	22,517	$	-	$	1,832		$	24,349

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Accrued Royalty Payable

3 Months Ended

Mar. 31, 2019

Accrued Royalty Payable

Accrued Royalty Payable

NOTE 9 – ACCRUED ROYALTY PAYABLE

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

● 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.

● August 2018 Royalty Agreement – the Company entered into a royalty agreement with a related party on August 1, 2018 in relation to a note payable of $1,365,000. This note replaced the November 2017 Royalty Agreement as well as other, non-royalty notes payable. Under the royalty agreement, the Company is required to pay $1.50 and accrue an additional $3.50 for every ignition interlock devise for the first nine months of the note payable. After the first nine months, the Company is required to pay $1.50 per devise and the amount accrued during the first nine months will be paid monthly through the next twelve months. After the note payable is paid in full, the Company is required to pay $3.00 per devise in perpetuity.

● December 2018 royalty Agreement – the Company entered into a royalty agreement with a related party on December 1, 2018 in relation to a note payable of $2,020,000. This note replaced the August 2018 Royalty Agreement. Under the royalty agreement, the Company is required to pay a royalty fee of $5.00 per month for every ignition interlock device that the Company has on the road in customers’ vehicles.

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

	March 31, 2019		December 31, 2018
November 2017 royalty agreement	$	3,327	$	3,327
August 2018 royalty agreement		18,058		18,058
December 2018 royalty agreement		20,800		5,500
Total accrued royalties	$	42,185	$	26,885

Royalty expense was $15,300 and $42,529 for the three months ended March 31, 2019 and 2018, respectively.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Stockholders' Equity

NOTE 10 – 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 March 31, 2019, 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 three months ended March 31, 2019, the Company issued 250,000 additional shares of its common stock for services valued at $24,500. The total number of shares issued or issuable as of March 31, 2019 was 30,659,244.

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Stock Warrants

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Stock Warrants

NOTE 11 – STOCK 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, 2017		5,607,176	$	0.51	$	3.19		412,864
Granted		930,410		1.29		4.00		(412,864	)
Exercised		-		-		-		-
Forfeited, cancelled, expired		-		-		-		-
Outstanding as of December 31, 2018		6,537,586	$	0.51	$	3.19		-
Granted		-		1.29		4.00		-
Exercised		-		-		-
Forfeited, cancelled, expired		-		-		-
Outstanding as of March 31, 2019		6,537,586	$	0.55	$	2.35		-

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Income (Loss) Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Income (Loss) Per Share

NOTE 12 – 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 March 31,
	2019		2018
Preferred shares		-		-
Convertible notes		408,375		57,296
Warrants		6,537,586		5,182,176
Options		-		-
Total anti-dilutive weighted average shares		6,945,961		5,239,472

If all dilutive securities had been exercised at March 31, 2019, the total number of common shares outstanding would be as follows:

Common Shares	30,566,920
Preferred Shares	-
Convertible notes	408,375
Warrants	6,537,586
Options	-
Total potential shares	37,512,881

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 13 – 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. The Company moved into the offices of David Haridim effective January 1, 2019. David Haridim is not charging the Company rent.

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

3 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 14 – RELATED PARTY TRANSACTIONS

The Company had the following related party transactions:

● Notes payable of $2,166,200 to the Doheny Group at March 31, 2019 (refer to notes payable related party section)

● 2,669,761 shares of common stock, of which 1,863,152 were granted to the Doheny Group in relation to notes payable.

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Subsequent Events

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

NOTE 15 – 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 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.

On July 10, 2019, the Company entered into a loan agreement with The Doheny Group for $13,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $13,000 on June 10, 2020.

On July 18, 2019, the Company entered into a loan agreement with The Doheny Group for $8,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $8,000 on June 18, 2020.

On July 26, 2019, the Company entered into a loan agreement with The Doheny Group for $25,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $25,000 on July 26, 2020.

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

3 Months Ended

Mar. 31, 2019

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 March 31, 2019, the Company had an accumulated deficit of $6,211,731 and net loss of $115,409 for the three months ended March 31, 2019. 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.

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

On January 1, 2018, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance.

The Company’s principal activity from which it generates revenue is a service which is the use of its interlock units. Revenue is measured based on considerations specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid at time of sale via credit card, check, or cash when the interlock units are installed on customers’ vehicles

A performance obligation is a promise in a contract to provide a distinct service to the customer, which for the Company is transfer of a service to customers. Performance obligations promised in a contract are identified based on the services that will be provided to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the service is separately identifiable from other promises in the contract. The Company has concluded the services accounted for as the single performance obligation.

The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods to the customer. The Company does not issue refunds.

The Company recognizes revenue when it satisfies a performance obligation in a contract by providing a service to a customer when the Company installs the interlock units on the customers’ vehicles. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

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 $0 and $16,861 for the three months ended March 31, 2019 and 2018, 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 March 31, 2019 and December 31, 2018 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 9. 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. The Company wrote off $255,030 in accrued royalties to gain on extinguishment of debt in December 2018 due to the December 31, 2018 settlement with two royalty noteholders in which they relinquished all claims to accrued royalties.

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:

Description	Level 1		Level 2		Level 3
Balance December 31, 2018	$	-	$	22,517	$	-
Change in fair value of derivative liability		-		1,832		-
Balance March 31, 2019	$	-	$	24,349	$	-

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.

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 three months ended March 31, 2019, one distributor, licensed in one state, makes up 100% percent of all revenues from distributors at March 31, 2019. 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.

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, 2019, 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 August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This standard removes, modifies, and adds certain disclosure requirements for fair value measurements. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. While the Company is currently in the process of evaluating the effects of this standard on the consolidated financial statements, the Company plans to adopt ASU No. 2018-13 in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company’s accounting for the service element of a hosting arrangement that is a service contract is not affected by the proposed amendments and will continue to be expensed as incurred in accordance with existing guidance. This standard does not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service contracts. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company plans to adopt the updated disclosure requirements of ASU No. 2018-15 prospectively in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and expects the impact from this standard to be immaterial.

Other recently issued accounting updates are not expected to have a material impact on the Company’s Interim Financial Statements.

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

3 Months Ended

Mar. 31, 2019

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:

Description	Level 1		Level 2		Level 3
Balance December 31, 2018	$	-	$	22,517	$	-
Change in fair value of derivative liability		-		1,832		-
Balance March 31, 2019	$	-	$	24,349	$	-

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2019

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 March 31,
	2019			2018
Segment gross profit (a):
Monitoring	$	192,052		$	130,873
Distributorships		17,691			23,170
Gross profit		209,743			154,043
Identifiable segment operating expenses (b):
Monitoring		-			-
Distributorships		-			-
		-			-
Identifiable segment operating income (c):
Monitoring		192,052			130,873
Distributorships		17,691			23,170
		209,743			154,043
Reconciliation of identifiable segment income to corporate income (d):
Payroll		98,040			236,412
Professional fees		41,546			37,092
General and administrative expenses		60,074			249,554
Interest expense		176,824			102,321
Change in fair value of derivative liability		1,832			7,286
Gain on extinguishment of debt		(54,764	)		-
		323,552			632,665
Loss before provision for income taxes		(113,809	)		(478,622	)
Provision for income taxes		1,600			-
Net loss	$	(115,409	)	$	(478,622	)
Total net property, plant, and equipment assets
Monitoring	$	-		$	-
Distributorships		-			-
Corporate		-			-
	$	-		$	-

(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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Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2019

Payables and Accruals [Abstract]

Schedule of Accrued Expense

Accrued Expenses consist of the following:

Description	March 31, 2019		December 31, 2018
Accrued payroll and payroll taxes	$	20,885	$	17,616
Deferred rent		-		5,317
Income tax payable		7,530		5,930
Other accrued expenses		7,133		37,125
Total	$	35,548	$	65,988

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Notes Payable (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Notes Payable

Notes payable consist of the following:

	As of March 31, 2019						As of December 31, 2018
Terms	Amount		Discount		Net Balance		Amount			Discount			Net Balance
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		$	(14,474	)	$	26,262
October 2018 ($60,000) - $561 daily principal and interest until paid in full		-		-		-		42,424			-			42,424
October 2018 ($72,800) - $11,527 monthly principal and interest for first six months, $9,975 monthly principal and interest last six months		67,159		-		67,159		67,159			-			67,159
Total notes payable		67,159		-		67,159		150,319			(14,474	)		135,845
Less: non-current portion		-		-		-		(24,994	)		6,925			(18,069	)
Notes payable, current portion	$	67,159	$	-	$	67,159	$	125,325		$	(7,549	)	$	117,776

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Notes Payable to Related Parties (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Notes Payable Related Parties

Notes payable to related parties consist of the following:

Terms	March 31, 2019			December 31, 2018
August 2018 ($1,365,000) – Replaced August 2018 note ($1,365,000) that replaced November 2017 note ($765,000 balance at August 1, 2018), February 2018 note ($100,000) and March 2018 note ($500,000). Includes $635,000 penalty on default of August 2018 ($1,365,000) note and $20,000 for missed payment on August 2018 note. Interest only monthly payment of $50,500 for life of note. Entire principal due December 1, 2023.	$	2,020,000		$	2,020,000
December 2018 ($6,000) – No interest with principal due on December 17, 2019.		6,000			6,000
December 2018 ($23,000) – No interest with principal due on December 13, 2019.		23,000			23,000
January 2019 ($32,700) – No interest with principal due on January 3, 2020.		32,700			-
January 2019 ($40,000) – No interest with principal due on January 11, 2020.		40,000			-
January 2019 ($14,500) – No interest with principal due on January 15, 2020.		14,500			-
February 2019 ($15,000) – No interest with principal due on February 1, 2020.		15,000			-
February 2019 ($5,000) – No interest with principal due on February 19, 2020.		5,000			-
March 2019 ($10,000) – No interest with principal due on March 4, 2020.		10,000			-
Total notes payable to related parties		2,166,200			2,049,000
Less: non-current portion		(2,137,200	)		(2,020,000	)
Notes payable to related parties, current portion	$	29,000		$	29,000

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Convertible Notes Payable (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Convertible Notes Payable

Convertible notes payable consists of the following:

	As of March 31, 2019									As of December 31, 2018
Terms	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
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			(10,246	)		9,754			20,000			(11,527	)		8,473
Total convertible notes payable		27,500			(10,246	)		17,254			27,500			(11,527	)		15,973
Less: non-current portion		(20,000	)		5,122			(14,878	)		(20,000	)		6,403			(13,597	)
Convertible notes payable, current portion	$	7,500		$	(5,124	)	$	2,376		$	7,500		$	(5,124	)	$	2,376

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Derivative Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Liabilities

Derivative liabilities consisted of the following:

	March 31, 2019		December 31, 2018
August 2015 - $15,000 convertible debt	$	9,133	$	6,523
March 2018 - $20,000 convertible debt		15,216		15,994
Total derivative liabilities	$	24,349	$	22,517

Schedule of Revalue of Derivatives Using Black Scholes Model

The following table describes the derivative liability as of December 31, 2018 and March 31, 2019.

	Balance							Balance
	at 12/31/18		Additions		Changes			at 03/31/19
August 2015 - $15,000 convertible debt	$	6,523	$	-	$	2,610		$	9,133
March 2018 - $20,000 convertible debt		15,994		-		(778	)		15,216
Total	$	22,517	$	-	$	1,832		$	24,349

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Accrued Royalty Payable (Tables)

3 Months Ended

Mar. 31, 2019

Accrued Royalty Payable

Schedule of Accrued Royalties

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

	March 31, 2019		December 31, 2018
November 2017 royalty agreement	$	3,327	$	3,327
August 2018 royalty agreement		18,058		18,058
December 2018 royalty agreement		20,800		5,500
Total accrued royalties	$	42,185		26,885

XML

Stock Warrants (Tables)

3 Months Ended

Mar. 31, 2019

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, 2017		5,607,176	$	0.51	$	3.19		412,864
Granted		930,410		1.29		4.00		(412,864	)
Exercised		-		-		-		-
Forfeited, cancelled, expired		-		-		-		-
Outstanding as of December 31, 2018		6,537,586	$	0.51	$	3.19		-
Granted		-		1.29		4.00		-
Exercised		-		-		-
Forfeited, cancelled, expired		-		-		-
Outstanding as of March 31, 2019		6,537,586	$	0.55	$	2.35		-

XML

Income (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2019

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 March 31,
	2019		2018
Preferred shares		-		-
Convertible notes		408,375		57,296
Warrants		6,537,586		5,182,176
Options		-		-
Total anti-dilutive weighted average shares		6,945,961		5,239,472

Schedule of Dilutive Securities of Common Shares Outstanding

If all dilutive securities had been exercised at March 31, 2019, the total number of common shares outstanding would be as follows:

Common Shares	30,566,920
Preferred Shares	-
Convertible notes	408,375
Warrants	6,537,586
Options	-
Total potential shares	37,512,881

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

XML

Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Accumulated deficit	$ (6,211,731)		$ (6,096,322)
Net loss	(115,409)	$ (478,622)	(1,799,677)
Advertising and marketing expenses	$ 0	$ 16,861
Accrued royalties			$ 255,030
Maximum percentage of carrying value of debt			10.00%
One Distributer [Member] | Revenue [Member]
Concentration risk, percentage	100.00%

XML

Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Financial Instruments Measured at Fair Value on Recurring Basis (Details)	3 Months Ended
	Mar. 31, 2019 USD ($)
Fair Value, Inputs, Level 1 [Member]
Balance, beginning
Change in fair value of derivative liability
Balance, ending
Fair Value, Inputs, Level 2 [Member]
Balance, beginning	22,517
Change in fair value of derivative liability	1,832
Balance, ending	24,349
Fair Value, Inputs, Level 3 [Member]
Balance, beginning
Change in fair value of derivative liability
Balance, ending

XML

Segment Reporting (Details Narrative)	3 Months Ended
	Mar. 31, 2019 Device
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		12 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Gross Profit		$ 209,743	$ 154,043
Payroll		98,040	236,412
Professional fees		41,546	37,092
General and administrative expenses		60,074	249,554
Interest expense		176,824	102,321
Change in fair value of derivative liability		(1,832)	(22,657)	$ 1,832
Gain on extinguishment of debt		54,764
Loss before provision for income taxes		(113,809)	(478,622)
Provision for income taxes		1,600
Net loss		(115,409)	(478,622)	$ (1,799,677)
Monitoring [Member]
Gross Profit	[1]	192,052	130,873
Identifiable segment operating expenses	[2]
Identifiable segment operating income	[3]	192,052	130,873
Total net property, plant, and equipment assets
Distributorships [Member]
Gross Profit	[1]	17,691	23,170
Identifiable segment operating expenses	[2]
Identifiable segment operating income	[3]	17,691	23,170
Total net property, plant, and equipment assets
Operating Segment [Member]
Gross Profit	[1]	209,743	154,043
Identifiable segment operating expenses	[2]
Identifiable segment operating income	[3]	209,743	154,043
Payroll	[4]	98,040	236,412
Professional fees	[4]	41,546	37,092
General and administrative expenses	[4]	60,074	249,554
Interest expense	[4]	176,824	102,321
Change in fair value of derivative liability	[4]	1,832	7,286
Gain on extinguishment of debt	[4]	(54,764)
Reconciliation of identifiable segment income to corporate income	[4]	323,552	632,665
Loss before provision for income taxes		(113,809)	(478,622)
Provision for income taxes		1,600
Net loss		(115,409)	(478,622)
Total net property, plant, and equipment assets
Corporate [Member]
Total net property, plant, and equipment assets

[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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Accrued Expenses - Schedule of Accrued Expense (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accrued payroll and payroll taxes	$ 20,885	$ 17,616
Deferred rent		5,317
Income tax payable	7,530	5,930
Other accrued expenses	7,133	37,125
Total	$ 35,548	$ 65,988

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Notes Payable (Details Narrative) - USD ($)					1 Months Ended	3 Months Ended
	Jan. 16, 2019	Oct. 11, 2018	Oct. 04, 2018	Dec. 02, 2017	Jan. 31, 2019	Mar. 31, 2019	Mar. 31, 2018
Amortization of debt discount						$ 15,754	$ 18,447
Gain on extinguishments of debt						54,764
Repayment of note payable						31,589	19,850
December 2017 Note [Member]
Notes payable				$ 50,000
Debt instrument, maturity date				Dec. 01, 2020
Promissory note interest, percentage				15.00%
Principal per month, amount				$ 1,733
Amortization of debt discount				22,650
Gain on extinguishments of debt					$ 43,930
Interest expense						0	1,833
December 2017 Note [Member] | Third Party [Member]
Notes payable				$ 50,000
October 2018 Note [Member]
Notes payable		$ 59,105
Debt instrument, maturity date		May 05, 2019
Promissory note interest, percentage		55.00%
Gain on extinguishments of debt	$ 10,834
Interest expense						339	0
Note payable, processing fee		$ 895
Principal per business day, amount		561
Repayment of note payable	$ 30,806
October 2018 Note [Member] | Third Party [Member]
Notes payable		$ 60,000
October 2018 Note 1 [Member]
Notes payable			$ 72,800
Debt instrument, maturity date			Oct. 04, 2019
Promissory note interest, percentage			51.00%
Interest expense						$ 8,563	$ 0
October 2018 Note 1 [Member] | First Six Months [Member]
Principal per month, amount			$ 11,527
October 2018 Note 1 [Member] | Last Six Months [Member]
Principal per month, amount			9,975
October 2018 Note 1 [Member] | Third Party [Member]
Notes payable			$ 72,800

XML

Notes Payable - Schedule of Notes Payable (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Notes payable, gross amount	$ 67,159	$ 150,319
Notes payable, discount		(14,474)
Notes payable, net balance	67,159	135,845
Less: non-current portion, gross		(24,994)
Less: non-current portion, discount		6,925
Less: non-current portion, net		(18,069)
Notes payable, current portion, gross	67,159	125,325
Notes payable, current portion, discount		(7,549)
Notes payable, current portion	67,159	117,776
December 2017 Note [Member]
Notes payable, gross amount		40,736
Notes payable, discount		(14,474)
Notes payable, net balance		26,262
October 2018 Note [Member]
Notes payable, gross amount		42,424
Notes payable, discount
Notes payable, net balance		42,424
October 2018 Note 1 [Member]
Notes payable, gross amount	67,159	67,159
Notes payable, discount
Notes payable, net balance	$ 67,159	$ 67,159

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Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($)	Oct. 11, 2018	Oct. 04, 2018	Dec. 02, 2017	Mar. 31, 2019	Dec. 31, 2018
Common stock shares issued				30,566,920	31,073,529
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
December 2017 Note [Member] | Third Party [Member]
Notes payable			$ 50,000
October 2018 Note [Member]
Notes payable	$ 59,105
Interest bearing percentage	55.00%
Debt due date	May 05, 2019
Principal per business day, amount	$ 561
October 2018 Note [Member] | Third Party [Member]
Notes payable	$ 60,000
October 2018 Note 1 [Member]
Notes payable		$ 72,800
Interest bearing percentage		51.00%
Debt due date		Oct. 04, 2019
October 2018 Note 1 [Member] | First Six Months [Member]
Per month amount		$ 11,527
October 2018 Note 1 [Member] | Last Six Months [Member]
Per month amount		9,975
October 2018 Note 1 [Member] | Third Party [Member]
Notes payable		$ 72,800

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Notes Payable to Related Parties (Details Narrative) - USD ($)										3 Months Ended
	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	Mar. 31, 2019	Mar. 31, 2018
Notes payable principal balance							$ 2,049,000			$ 2,166,200
Agreement With a Related Party [Member] | Doheny Group [Member]
Note for principal balance	$ 10,000	$ 5,000	$ 15,000	$ 14,500	$ 40,000	$ 32,700	$ 23,000	$ 6,000
Debt instrument, maturity date	Mar. 04, 2020	Feb. 19, 2020	Feb. 01, 2020	Jan. 15, 2020	Jan. 11, 2020	Jan. 03, 2020	Dec. 31, 2019	Dec. 17, 2019
New Note [Member] | Replacement of a Note [Member]
Note for principal balance									$ 2,222,000
August 2018, New Promissory Note [Member] | Replacement of a Note [Member]
Notes payable principal balance									1,365,000
December 2018, New Promissory Note [Member]
Loan default penalty									635,000
Debt instrument, missed payment									20,000
Interest only payments, monthly									$ 50,500
Debt instrument, maturity date									Dec. 01, 2023
Accrued interest payments									$ 202,000
Interest expense, related party debt										$ 151,500	$ 0
December 2018, New Promissory Note [Member] | Third Party [Member]
Note for principal balance									$ 2,020,000

XML

Notes Payable to Related Parties - Schedule of Notes Payable Related Parties (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Total notes payable to related parties	$ 2,166,200	$ 2,049,000
Less: non-current portion	(2,137,200)	(2,020,000)
Notes payable, current portion	29,000	29,000
August 2018 Note [Member]
Total notes payable to related parties	2,020,000	2,020,000
December 2018 Note [Member]
Total notes payable to related parties	6,000	6,000
December 2018 Note 1 [Member]
Total notes payable to related parties	23,000	23,000
January 2019 Note [Member]
Total notes payable to related parties	32,700
January 2019 Note 1 [Member]
Total notes payable to related parties	40,000
January 2019 Note 2 [Member]
Total notes payable to related parties	14,500
February 2019 Note [Member]
Total notes payable to related parties	15,000
February 2019 Note 1 [Member]
Total notes payable to related parties	5,000
March 2019 Note [Member]
Total notes payable to related parties	$ 10,000

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Notes Payable to Related Parties - Schedule of Notes Payable Related Parties (Details) (Parenthetical) - USD ($)	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
August 2018 Note [Member]
Note for principal balance									$ 1,365,000
Loan default penalty									635,000
Debt instrument, missed payment									20,000
Interest paid, monthly									$ 50,500
Debt instrument, maturity date									Dec. 01, 2023
November 2017 Note [Member] | Replacement of a Note [Member]
Principal payments, monthly									$ 765,000
February 2018 Note [Member] | Replacement of a Note [Member]
Principal payments, monthly									100,000
March 2018 Note [Member] | Replacement of a Note [Member]
Principal payments, monthly									$ 500,000
December 2018 Note [Member]
Note for principal balance								$ 6,000
Debt instrument, maturity date								Dec. 17, 2019
December 2018 Note 1 [Member]
Note for principal balance							$ 23,000
Debt instrument, maturity date							Dec. 13, 2019
January 2019 Note [Member]
Note for principal balance						$ 32,700
Debt instrument, maturity date						Jan. 03, 2020
January 2019 Note 1 [Member]
Note for principal balance					$ 40,000
Debt instrument, maturity date					Jan. 11, 2020
January 2019 Note 2 [Member]
Note for principal balance				$ 14,500
Debt instrument, maturity date				Jan. 15, 2020
February 2019 Note [Member]
Note for principal balance			$ 15,000
Debt instrument, maturity date			Feb. 01, 2020
February 2019 Note 1 [Member]
Note for principal balance		$ 5,000
Debt instrument, maturity date		Feb. 19, 2020
March 2019 Note [Member]
Note for principal balance	$ 10,000
Debt instrument, maturity date	Mar. 04, 2020

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Convertible Notes Payable (Details Narrative)				3 Months Ended
	Mar. 09, 2018 USD ($)	May 06, 2016 USD ($) shares	Aug. 07, 2015 USD ($) Installments $ / shares shares	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)
Convertible notes				$ 17,254		$ 15,973
Amortization of debt discount				15,754	$ 18,447
Expected Dividend Rate [Member]
Warrants measurement input			0.00
Volatility [Member]
Warrants measurement input			1.00
Risk Free Interest Rate [Member]
Warrants measurement input | Installments			0.0108
Convertible Debenture Due on August 7, 2017 [Member]
Interest bearing percentage			7.50%
Convertible notes			$ 15,000	7,500		7,500
Debt instrument, maturity 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				141	141
Convertible Debenture Due on March 9, 2021 [Member]
Interest bearing percentage	10.00%
Convertible notes	$ 20,000			9,754		$ 8,473
Debt instrument, maturity 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				$ 500	$ 126
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

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Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018	Mar. 09, 2018	Aug. 07, 2015
Convertible notes, gross amount	$ 27,500	$ 27,500
Convertible notes, discount	(10,246)	(11,527)
Convertible notes, net balance	17,254	15,973
Less: non-current portion, gross amount	(20,000)	(20,000)
Less: non-current portion, discount	5,122	6,403
Less: non-current portion, net	(14,878)	(13,597)
Convertible notes, current portion, gross amount	7,500	7,500
Convertible notes, current portion, discount	(5,124)	(5,124)
Convertible notes, current portion	2,376	2,376
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 March 9, 2021 [Member]
Convertible notes, gross amount	20,000	20,000
Convertible notes, discount	(10,246)	(11,527)
Convertible notes, net balance	$ 9,754	$ 8,473	$ 20,000

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Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($)	Mar. 09, 2018	Aug. 07, 2015	Mar. 31, 2019	Dec. 31, 2018
Convertible notes			$ 17,254	$ 15,973
Convertible Debenture Due on August 7, 2017 [Member]
Convertible notes		$ 15,000	7,500	7,500
Interest bearing percentage		7.50%
Convertible debt due date		Aug. 07, 2017
Convertible Debenture Due on March 9, 2021 [Member]
Convertible notes	$ 20,000		$ 9,754	$ 8,473
Interest bearing percentage	10.00%
Convertible debt due date	Mar. 09, 2021

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Derivative Liabilities (Details Narrative) - USD ($)	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Aug. 31, 2015
Convertible notes	$ 17,254	$ 15,973
Derivative [Member] | Expected Dividend Rate [Member]
Warrants measurement input			0.00%	0.00%
Derivative [Member] | Volatility [Member]
Warrants measurement input			413.00%	100.00%
Derivative [Member] | Risk Free Interest Rate [Member]
Warrants measurement input			2.90%	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
March 2018 Convertible Debenture [Member] | Derivative [Member]
Convertible notes			$ 20,000
Convertible debt, fair value			$ 20,000
Warrants, term			3 years 4 months 6 days

XML

Derivative Liabilities - Schedule of Derivative Liabilities (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Derivative liability	$ 24,349	$ 22,517
August 2015 Convertible Debt [Member]
Derivative liability	9,133	6,523
March 2018 Convertible Debt [Member]
Derivative liability	$ 15,216	$ 15,994

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Derivative Liabilities - Schedule of Derivative Liabilities (Details) (Parenthetical) - USD ($)	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Aug. 31, 2015
Convertible debt	$ 17,254	$ 15,973
August 2015 Convertible Debenture [Member] | Derivative [Member]
Convertible debt				$ 15,000
March 2018 Convertible Debenture [Member] | Derivative [Member]
Convertible debt			$ 20,000

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Derivative Liabilities - Schedule of Revalue of Derivatives Using Black Scholes Model (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Derivative liability	$ 24,349		$ 22,517
Additions
Changes	(1,832)	$ (22,657)	1,832
August 2015 Convertible Debt [Member]
Derivative liability	9,133		6,523
Additions
Changes			2,610
March 2018 Convertible Debt [Member]
Derivative liability	$ 15,216		15,994
Additions
Changes			$ (778)

XML

Derivative Liabilities - Schedule of Revalue of Derivatives Using Black Scholes Model (Details) (Parenthetical) - USD ($)	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Aug. 31, 2015
Convertible debt	$ 17,254	$ 15,973
August 2015 Convertible Debenture [Member] | Derivative [Member]
Convertible debt				$ 15,000
March 2018 Convertible Debenture [Member] | Derivative [Member]
Convertible debt			$ 20,000

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Accrued Royalty Payable (Details Narrative) - USD ($)				3 Months Ended
	Dec. 01, 2018	Aug. 01, 2018	Nov. 01, 2017	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Notes payable - related party				$ 29,000		$ 29,000
Royalty fee and expense				$ 15,300	$ 42,529
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.
August 2018, Royalty Agreement [Member]
Notes payable - related party		$ 1,365,000
Royalty fee description		This note replaced the November 2017 Royalty Agreement as well as other, non-royalty notes payable. Under the royalty agreement, the Company is required to pay $1.50 and accrue an additional $3.50 for every ignition interlock devise for the first nine months of the note payable. After the first nine months, the Company is required to pay $1.50 per devise and the amount accrued during the first nine months will be paid monthly through the next twelve months. After the note payable is paid in full, the Company is required to pay $3.00 per devise in perpetuity.
December 2018 Royalty Agreement [Member]
Notes payable - related party	$ 2,020,000
Royalty fee description	This note replaced the August 2018 Royalty Agreement. Under the royalty agreement, the Company is required to pay a royalty fee of $5.00 per month for every ignition interlock device that the Company has on the road in customers' vehicles.

XML

Accrued Royalty Payable - Schedule of Accrued Royalties (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Total accrued royalties	$ 42,185	$ 26,885
November 2017 Royalty Agreement [Member]
Total accrued royalties	3,327	3,327
August 2018 Royalty Agreement [Member]
Total accrued royalties	18,058	18,058
December 2018 Royalty Agreement [Member]
Total accrued royalties	$ 20,800	$ 5,500

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Stockholders' Equity (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2017	Dec. 31, 2018
Preferred stock, shares authorized	20,000,000		20,000,000
Preferred stock, par value	$ 0.001		$ 0.001
Number of preferred stock shares issued, value			$ 458,705
Preferred stock, shares issued	1,000,000		1,000,000
Common stock, shares authorized	100,000,000		100,000,000
Common stock, par value	$ 0.0001		$ 0.0001
Shares issued for services, value	$ 24,500		$ 114,643
Common stock, shares issued	30,566,920		31,073,529
Common Stock [Member]
Number of preferred stock shares issued, value
Shares issued for services, shares	250,000
Shares issued for services, value	$ 24,500
Common Stockholders [Member]
Common stock voting rights	Holders of common stock are entitled to one vote for each share held.
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
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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Stock Warrants (Details Narrative) - Warrant [Member]	Mar. 31, 2019 $ / shares
Minimum [Member]
Warrant expiration	3 years
Warrant exercise price	$ 0.10
Maximum [Member]
Warrant expiration	4 years
Warrant exercise price	$ 1.00

XML

Stock Warrants - Schedule of Warrant Activity (Details) - Warrant [Member] - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Warrants for common shares, outstanding, beginning balance	6,537,586	5,607,176
Warrants for common shares, Granted		930,410
Warrants for common shares, Exercised
Warrants for common shares, Forfeited, cancelled, expired
Warrants for common shares, Outstanding, ending balance	6,537,586	6,537,586
Weighted average exercise price, beginning balance	$ 0.51	$ 0.51
Weighted average exercise price, Granted	1.29	1.29
Weighted average exercise price, Exercised
Weighted average exercise price, Forfeited, cancelled, expired
Weighted average exercise price, ending balance	$ 0.55	$ 0.51
Weighted Average Remaining Contractual Term Warrants Outstanding, Beginning	3 years 2 months 8 days	3 years 2 months 8 days
Weighted Average Remaining Contractual Term Warrants Outstanding, Granted	4 years	4 years
Weighted Average Remaining Contractual Term Warrants Outstanding Ending	2 years 4 months 6 days	3 years 2 months 8 days
Aggregate Intrinsic Value Outstanding Beginning		$ 412,864
Aggregate Intrinsic Value, Granted		(412,864)
Aggregate Intrinsic Value Outstanding Ending

XML

Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Total anti-dilutive weighted average shares	6,945,961	5,239,472
Preferred Shares [Member]
Total anti-dilutive weighted average shares
Convertible Notes [Member]
Total anti-dilutive weighted average shares	408,375	57,296
Warrants [Member]
Total anti-dilutive weighted average shares	6,537,586	5,182,176
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)	3 Months Ended
	Mar. 31, 2019 shares
Total potential shares	37,512,881
Common Shares [Member]
Total potential shares	30,566,920
Preferred Shares [Member]
Total potential shares
Convertible Notes [Member]
Total potential shares	408,375
Warrants [Member]
Total potential shares	6,537,586
Options [Member]
Total potential shares

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Commitments and Contingencies (Details Narrative) - USD ($)	Aug. 28, 2017	Dec. 01, 2016
Cahuenga Management LLC [Member]
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	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 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) - Doheny Group [Member]	3 Months Ended
	Mar. 31, 2019 USD ($) shares
Notes payable | $	$ 2,166,200
Number of common stock granted	2,669,761
Notes Payable [Member]
Number of common stock granted	1,863,152

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Subsequent Events (Details Narrative) - Subsequent Event [Member] - Loan Agreement [Member] - The Doheny Group [Member] - USD ($)	Jul. 26, 2019	Jul. 18, 2019	Jul. 10, 2019	Jun. 03, 2019	May 01, 2019
Loan amount	$ 25,000	$ 8,000	$ 13,000	$ 89,000	$ 20,000
Debt interest rate	0.00%	0.00%	0.00%	0.00%	0.00%
Debt monthly payment
Debt balloon payment	$ 25,000	$ 8,000	$ 13,000	$ 89,000	$ 20,000
Debt balloon payment date	Jul. 26, 2020	Jun. 18, 2020	Jun. 10, 2020	Jun. 03, 2020	May 01, 2020