UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended:September 30, ~~2015~~2018

o☐TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________ to _________

Commission File Number333-139045

~~PEARTRACK SECURITY SYSTEMS, INC.~~

ENIGMA-BULWARK, LTD.

(Exact name of registrant as specified in its charter)


Nevada	~~26-1875304~~46-4733512
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

~~1327 Ocean Avenue,~~3415 South Sepulveda Blvd., Suite ~~B, Santa Monica, California~~1100-#1234, Los Angeles, CA	~~90401~~90034
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:	~~310-899-3900~~(888) 287-9994

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.

x~~YES~~ o NO

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).

x~~YES~~ o NO

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

Large accelerated filer	o□		Accelerated filer	o	□
	Non-accelerated filer	o□		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).	☐

~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.~~

o~~YES~~ xNO

~~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.

~~69,454,714~~ 136,591,547common shares issued and outstanding as of ~~December 22, 2015~~ May 31, 2023

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

The Company’s unaudited interim consolidated financial statements for the ~~three month period~~nine months ended September 30, ~~2015,~~2018, form part of this quarterly report. They are stated in United States Dollars (US$), and are prepared in accordance with United States generally accepted accounting principles.

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included thereto for the year ended December 31, ~~2014,~~2017, on Form 10-K, as filed with the Securities and Exchange Commission on ~~April 15, 2015.~~June 8, 2023.

ENIGMA-BULWARK, LTD.

1CONSOLIDATED BALANCE SHEETS

	September 30, 2018			December 31, 2017
	(Unaudited)
ASSETS

Investment in securities	$	2,413		$	4,825
Property and equipment, net		828			1,182
Other assets		5,800			5,800

TOTAL ASSETS	$	9,041		$	11,807

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable and accrued expenses	$	1,609,291		$	1,417,877
Notes and loans payable		169,605			169,605
Notes payable, convertible		500,000			688,755
Notes payable, convertible, related party		688,985			500,230
Related party payables		723,876			670,697
Total current liabilities		3,691,757			3,447,164

Long-term liabilities
Notes and convertible notes payable, related party, net of unamortized discount		4,406,952			3,982,575
Total long-term liabilities		4,406,952			3,982,575
Total liabilities		8,098,709			7,429,739

Stockholders’ deficit
Preferred stock, $0.001 par value, 25,000,000 shares authorized, none issued and outstanding		--			--
Common stock, $0.001 par value, 250,000,000 shares authorized, 69,382,753 issued and outstanding as of September 30, 2018, and December 31, 2017		69,382			69,382
Additional paid in capital		11,025,120			11,025,120
Accumulated deficit		(19,181,224	)		(18,511,900	)
Accumulated comprehensive income		(2,946	)		(534	)
Total stockholders' deficit		(8,089,668	)		(7,417,932	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	9,041		$	11,807

PEARTRACK SECURITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

September 30, 2015

December 31, 2014

ASSETS

Current assets




Cash and cash equivalents
$
74,621

$
64,753

Accounts receivable

4,683

––

Refunds and claims receivable

4,947

15,892

Prepaid expenses

1,108

716

Total current assets

85,359

81,361

Investment in securities

1,206

16,887

Property and equipment, net

2,244

Intangible assets, unencumbered, net

2,033,086

435,000

Intangible assets, pledged to creditors, net

1,377,270

1,455,624

Other assets

6,447

6,447

TOTAL ASSETS
$
3,505,612

$
1,995,319



LIABILITIES AND STOCKHOLDERS' DEFICIT



LIABILITIES

Current liabilities

Accounts payable and accrued expenses
$
1,261,742

$
1,165,990

Deferred revenue

225,000

225,000

Related party payables

387,882

297,581

Notes payable-short-term convertible-related party

787,837

787,837

Notes and loans payable-short-term

893,075

912,244

Total current liabilities

3,555,536

3,388,652



Long-term liabilities

Notes payable-long-term convertible-related party, net of unamortized discount

2,427,018

2,108,362

Total long-term liabilities

2,427,018

2,108,362

Total liabilities

5,982,552

5,497,014

STOCKHOLDERS' DEFICIT

Preferred stock, $0.001 par value, 25,000,000 shares authorized, none issued and outstanding

––

––

Common stock, $0.001 par value, 250,000,000 shares authorized, 69,454,714 and 59,965,091 issued and outstanding as of September 30, 2015, and December 31, 2014, respectively

69,455

59,965

Additional paid in capital

10,765,800

8,126,703

Subscriptions receivable

(100
)

(1,600
)
Accumulated deficit

(13,305,512
)

(11,695,730
)
Accumulated comprehensive income (loss)

(6,585
)

8,967

Total stockholders' deficit

(2,476,942
)

(3,501,695
)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$
3,505,612

$
1,995,319

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

ENIGMA-BULWARK, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

2(UNAUDITED)

	For the three months ended						For the nine months ended
	September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017

Revenue	$	--		$	--		$	--		$	649
Cost of sales		--			687			--			2,553
Gross profit (loss)		--			(687	)		--			(1,904	)

General and administrative expenses		147,289			144,537			451,754			457,578

Operating loss		(147,289	)		(145,224	)		(451,754	)		(459,482	)

Other income (expenses)
Interest expense		(53,080	)		(47,160	)		(152,869	)		(136,102	)
Discount amortization		(21,804	)		(21,804	)		(64,701	)		(64,701	)
Realized gain on currency translation		--			184			--			680
Total other income (expenses)		(74,884	)		(68,780	)		(217,570	)		(200,123	)

Net loss		(222,173	)		(214,004	)		(669,324	)		(659,605	)

Comprehensive income (loss)
Unrealized loss on currency translation		--			(420	)		--			(1,228	)
Unrealized gain (loss) on securities		--			26,536			(2,412	)		(90,464	)

Net comprehensive income (loss)		--			26,116			(2,412	)		(91,692	)

Net loss and comprehensive loss	$	(222,173	)	$	(187,888	)	$	(671,736	)	$	(751,297	)

Net loss per share - basic and diluted	$	(0.003	)	$	(0.003	)	$	(0.010	)	$	(0.010	)

Weighted average common shares outstanding - basic and diluted		69,382,753			69,382,753			69,382,753			69,382,753

PEARTRACK SECURITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

For the three months ended

For the nine months ended


September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014

Revenue
$
1,481

$
119,438

$
7,755

$
146,789

Cost of sales

1,750

1,600

7,617

9,154

Gross profit (loss)

(269
)

117,838

138

137,635



General and administrative expenses

480,608

408,830

1,438,947

1,209,150

Operating loss

(480,877
)

(290,992
)

(1,438,809
)

(1,071,515
)

Interest income

––

––

––

2

Refunds and claims

––

2,708

––

71,149

Interest expense

(62,367
)

(63,401
)

(171,723
)

(192,213
)
Realized gain (loss) on currency translation

314

––

748

––

Loss on disposal of asset

––

––

––

(1,925
)


Net loss

(542,930
)

(351,685
)

(1,609,784
)

(1,194,502
)

Comprehensive income (loss):

Unrealized gain on currency translation

641

(7
)

131

(7
)
Unrealized gain (loss) on securities

––

(3,619
)

(15,681
)

(88,051
)
Net comprehensive income (loss)

641

(3,626
)

(15,550
)

(88,058
)

Net loss and comprehensive loss
$
(542,289
)
$
(355,311
)
$
(1,625,334
)
$
(1,282,560
)

Net loss per share - basic and diluted
$
(0.01
)
$
(0.11
)
$
(0.02
)
$
(0.43
)

Weighted average common shares outstanding - basic and diluted

69,454,714

2,950,912

66,917,552

2,776,914

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

ENIGMA-BULWARK, LTD.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

3(UNAUDITED)

PEARTRACK SECURITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

For the nine months ended

September 30, 2015

September 30, 2014

Cash flow from operating activities:

Net loss and comprehensive income (loss)
$
(1,625,334
)
$
(1,282,560
)
Comprehensive income (loss)

(15,550
)

(88,058
)
Net loss

(1,609,784
)

(1,194,502
)

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of deferred stock compensation

502,147

138,750

Accruals converted to related party loans

271,247

351,500

Depreciation and amortization

186,631

86,105

Discount amortization

68,159

64,701

Loss on disposal of asset

––

(1,925
)
Changes in operating assets and liabilities:

Increase in accounts receivable

(4,683
)

––

Decrease in refunds and claims receivable

10,945

14,174

Decrease in prepaid expenses

(392
)

(984
)
Increase in accounts payable and accrued expenses

95,753

107,494

Increase in deferred revenue

––

337,500

Increase in related party payables

90,301

521,259

Net cash provided by (used in) operating activities

(389,676
)

427,922

Cash flow from investing activities:

Cash received from subsidiary

674

––

Purchase of office equipment

(2,362
)

(755
)
Purchase of intellectual property

––

(450,000
)
Net cash provided by (used in) investing activities

(1,688
)

(450,755
)

Cash flow from financing activities:

Repayment of loans payable

(19,168
)

(39,171
)
Proceeds from issuance of common stock

418,519

––

Subscriptions received

1,750

5

Net cash provided by financing activities

401,101

(39,166
)

Effect of exchange rate changes

131

(7
)

Net increase (decrease) in cash

9,868

(62,006
)

Cash - beginning of period

64,753

65,446

Cash - end of period
$
74,621

$
3,440

NONCASH ACTIVITIES

Common stock subscriptions receivable
$
100

$
––

Conversion of debt into common stock

––

1,509,016

Conversion of related party payable to related party convertible note payable
$
271,247

$
351,500

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Interest paid
$
––

$
137,423

Income taxes paid
$
––

$
––

	For the nine months ended September 30, 2017
	Common Stock			Additional		Accumulated			Accumulated Other Comprehensive
	Shares	Amount		Paid In Capital		Deficit			Income (Loss)			Total

Equity Balance, December 31, 2016	69,382,753	$	69,382	$	11,025,120	$	(17,620,884	)	$	116,684		$	(6,409,698	)

Net loss							(231,811	)		(97,277	)		(329,088	)

Equity Balance, March 31, 2017	69,382,753		69,382		11,025,120		(17,852,695	)		19,407			(6,738,786	)

Net loss							(213,790	)		(20,531	)		(234,321	)

Equity Balance, June 30, 2017	69,382,753		69,382		11,025,120		(18,066,485	)		(1,124	)		(6,973,107	)

Net loss							(214,004	)		26,116			(187,888	)

Equity Balance, September 30, 2017	69,382,753	$	69,382	$	11,025,120	$	(18,280,489	)	$	24,992		$	(7,160,995	)

	For the nine months ended September 30, 2018
	Common Stock			Additional		Accumulated			Accumulated Other Comprehensive
	Shares	Amount		Paid In Capital		Deficit			Income (Loss)			Total

Equity Balance, December 31, 2017	69,382,753	$	69,382	$	11,025,120	$	(18,511,900	)	$	(534	)	$	(7,417,932	)

Net loss							(221,777	)		(2,412	)		(224,189	)

Equity Balance, March 31, 2018	69,382,753		69,382		11,025,120		(18,733,677	)		(2,946	)		(7,642,121	)

Net loss							(225,374	)		--			(225,374	)

Equity Balance, June 30, 2018	69,382,753		69,382		11,025,120		(18,959,051	)		(2,946	)		(7,867,495	)

Net loss							(222,173	)		--			(222,173	)

Equity Balance, September 30, 2018	69,382,753	$	69,382	$	11,025,120	$	(19,181,224	)	$	(2,946	)	$	(8,089,668	)

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

ENIGMA-BULWARK, LTD.

4CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

~~PEARTRACK SECURITY SYSTEMS, INC.~~

	For the nine months ended
	September 30, 2018			September 30, 2017
Cash flow from operating activities:
Net loss and comprehensive loss	$	(671,736	)	$	(751,297	)
Comprehensive loss		(2,412	)		(91,692	)
Net loss		(669,324	)		(659,605	)

Adjustments to reconcile net loss to net cash provided by operating activities:
Accruals converted to related party loans		359,676			311,250
Depreciation and amortization		354			354
Discount amortization		64,701			64,701
Gain on foreign exchange		--			(680	)
Changes in operating assets and liabilities:
Decrease in accounts receivable		--			887
Decrease in other receivables		--			5,985
Decrease in prepaid expenses		--			806
Decrease in other assets		--			700
Increase in accounts payable and accrued expenses		191,414			140,852
Increase in related party payables		53,179			135,771
Net cash provided by operating activities		--			1,021

Net increase in cash		--			1,021

Cash - beginning of period		--			--

Cash - end of period	$	--		$	1,021


NONCASH ACTIVITIES
Conversion of related party payable to related party convertible promissory note	$	359,676		$	311,250
Conversion of convertible note payable to related party convertible note payable	$	188,755		$	--

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	--		$	40
Income taxes paid	$	--		$	--

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

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, ~~2015~~2018, AND DECEMBER 31, 2017

NOTE 1. OVERVIEW AND NATURE OF BUSINESS

The accompanying unaudited consolidated financial statements of ~~PearTrack Security Systems, Inc.~~Enigma-Bulwark, Ltd., (the “Company” or ~~“PearTrack”~~“Enigma”) have been prepared in accordance with generally accepted accounting principles. The preparation of consolidated financial statements in conformity with 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 consolidated financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those ~~estimates~~.estimates.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, ~~2014.~~2017. Notes to the consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements have been omitted.

~~PearTrack Security Systems, Inc.,~~The Company was incorporated in Nevada on September 30, 2005, and is headquartered in Los Angeles, California. Formerly PearTrack Security Systems, Inc., the Company’s name was changed to Enigma-Bulwark, Ltd., on October 9, 2019, pursuant to a majority of the Company’s shareholders and unanimous resolution of the board of directors.

Enigma-Bulwark, Ltd. (“Enigma” or “Company”) is a security and ~~logistics~~risk management company ~~headquartered in Santa Monica, CA. The~~that provides physical security, technology-systems integration, and risk management advisory services. Services offered to assess and mitigate risk include security guards, risk management analysis, and proprietary and third-party technology and software. Target markets include corporations, governments and individuals across the globe.

As of September 30, 2018, the Company ~~is currently~~was structured with three ~~wholly owned~~wholly-owned subsidiaries: ~~PearTrack Systems Group, Ltd., Ecologic Products, Inc., and Ecologic Car Rentals, Inc., all Nevada corporations.~~ PearTrack Systems Group, Ltd. (“PTSG”), ~~is headquartered in the San Francisco Bay area of California, with offices in Manchester, England.~~Ecologic Products, Inc. (“EPI”), and Ecologic Car Rentals, Inc. (“ECR”), all Nevada corporations. The Company’s current business activities are diversified into two specific markets: security and risk management, and remote/mobile asset tracking ~~and environmental transportation and~~ products.

~~Through its wholly owned subsidiary, PearTrack Systems Group, Ltd., the~~The Company intends to provide a ~~suite of products~~unique solution to security issues in the ~~M2M telematics and remote/mobile asset~~intermodal shipping container marketplace, with its patented container tracking and ~~management industry, including a Global Positioning System (“GPS”) tracking~~locking system, ~~and tracking devices with a proprietary long-life battery system for non-powered assets.~~EnigmaLok (formerly PearLoxx), the rights of which were licensed to the Company in perpetuity in 2015.

Through the subsidiaries,Ecologic Car Rentals, Inc. and Ecologic Products, Inc., the Company continues its pursuits for ~~viable environmental rental car~~strategic opportunities ~~and its marketing and distribution endeavors~~ for its ~~environmental products. The Company anticipates~~shareholders, as management believes that ~~it will spin-out Ecologic Car Rentals~~the brands have value for companies with environmentally-friendly consumer-related products and ~~Ecologic Products, Inc. to its shareholders prior to the end of 2015.~~services.

The Company’s primary focus is on the development and commercialization of its proprietary battery system in conjunction with its GPS tracking and management technologies. The Company’s vertically integrated activities, spanning from hardware design, software development, marketing and sales, to project implementation and system operations, aim to make logistics chains more secure and increase operational efficiency. The Company continues to pursue wholesale distribution opportunities for the Ecologic Shine^®~~product, including product placement into major retail automotive chains. The Company is also developing a business plan for the retail distribution of the Ecologic Shine~~^® ~~product line in anticipation of spinning the operating subsidiary out to Shareholders.~~

Going Concern

The Company has incurred losses since inception resulting in a current period net loss of $671,736, an accumulated deficit of ~~$13,305,512,~~$19,181,224, and a working capital deficit of ~~$3,470,177,~~$3,691,757 as of September 30, 2018, and further losses are anticipated. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, which may not be available at commercially reasonable terms. There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations and the Company may cease operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements reflect all adjustments consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

This summary of significant accounting policies is presented to assist in understanding the Company’s consolidated financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the consolidated financial statements.

The Company’s fiscal year end is December 31.

Principles of Consolidation:

The consolidated financial statements include the accounts of the Company and its ~~wholly owned subsidiaries, PearTrack Systems Group, Ltd., Ecologic Products, Inc. and Ecologic Car Rentals, Inc.~~wholly-owned subsidiaries. All ~~significant inter-company accounts~~intercompany balances and transactions have been eliminated.

ENIGMA-BULWARK, LTD.

~~Cash and Cash Equivalents~~:The Company considers cash in banks, deposits in transit, and highly-liquid debt instruments purchased with original maturities of three months or less to be cash and cash equivalents. As of SeptemberNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, ~~2015, and December~~2018, AND DECEMBER 31, ~~2014, the Company had no cash equivalents.~~2017

~~Foreign Currency Translation~~: Items included in the financial statements of the Company’s subsidiary are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in US Dollars, which is the Company’s reporting currency.

The results and financial position of PearTrack Systems Group, Ltd., the Company’s wholly owned subsidiary, has a functional currency different from the reporting currency, and is translated into the reporting currency as follows:


~~(i)~~	~~assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;~~
~~(ii)~~	~~income and expenses for each income statement are translated at average exchange rates on a monthly basis; and~~
~~(iii)~~	~~all resulting exchange differences are recognized as a separate component of equity.~~

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement as other comprehensive income. On consolidation, exchange differences arising from the translation of the net investment in foreign entities are taken to stockholders’ equity. As of September 30, 2015, and December 31, 2014, respectively, exchange differences of $131 and $4,314 have been accumulated.

Use of Estimates:

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. Estimates ~~th4at~~that are critical to the accompanying consolidated financial statements include the estimates related to asset impairments of ~~long lived~~long-lived assets and investments, classification of expenditures as either an asset or an expense, valuation of deferred tax assets, and the likelihood of loss contingencies. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates and assumptions are revised periodically, and the effects of revisions are reflected in the consolidated financial statements in the period it is determined to be necessary. Actual results could differ from these estimates.

Fair Value Hierarchy

The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following:

Level 1: Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2: Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3: Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk.

The Company’s investment in securities are classified as Level 1 assets, and were valued using the quoted prices in the active market (Note 3).

Fair Value of Financial Instruments

As of September 30, 2018, and December 31, 2017, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, investments in securities, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation.

Cash and Cash Equivalents

The Company considers cash in banks, deposits in transit, and highly-liquid debt instruments purchased with original maturities of three months or less to be cash and cash equivalents. As of September 30, 2018, and December 31, 2017, the Company had no cash equivalents.

Foreign Currency Translation

Items included in the financial statements of the Company’s subsidiary are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in US Dollars, which is the Company’s reporting currency.

The results and financial position of PearTrack Systems Group, Ltd., the Company’s wholly owned subsidiary, has a functional currency different from the reporting currency, the British Pound, and is translated into the reporting currency as follows:

(i)assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii)income and expenses for each statement of operations are translated at average exchange rates on a monthly basis; and

(iii)all resulting exchange differences are recognized as a separate component of equity.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of operations as other comprehensive income. On consolidation, exchange differences arising from the translation of the net investment in foreign entities are taken to stockholders’ equity. During the nine months ended September 30, 2018 and 2017, respectively, unrealized exchange differences of $0 and $1,228 were recognized. As of September 30, 2018 and 2017, respectively, unrealized exchange differences of $6,703 and $6,899 have been accumulated.

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018, AND DECEMBER 31, 2017

The following represents the accumulated unrealized exchange differences, which are excluded from earnings and reflected as a component of other comprehensive income:

	Unrealized Foreign Currency Exchange
Balance, December 31, 2016	$	8,127
Unrealized exchange differences during period		(1,228	)
Balance, September 30, 2017	$	6,899

Balance, December 31, 2017	$	6,703
Unrealized exchange differences during period		--
Balance, September 30, 2018	$	6,703

Investments in Securities

Investments in securities are accounted for using the equity method if the investment provides the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee's board of directors, are considered in determining whether the equity method is appropriate. All other equity investments, which consist of investments for which the Company does not possess the ability to exercise significant influence, are accounted for under the mark to market method. Under the mark to market method of accounting, investments are marked to market, with unrealized gains and losses being excluded from earnings and reflected as a component of other comprehensive income.

Property and Equipment

Property and equipment is carried at the cost of acquisition or construction and depreciated over the estimated useful lives of the assets. Costs associated with repairs and maintenance are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of the Company’s property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are 5 to 7 years.

Convertible Debt

The Company recognizes the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert debt into common stock at a price per share that is less than the trading price to the public on the date of the debt. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debt, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the interest method.

Revenue Recognition

Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is reasonably assured.

The Company’s revenue is generated from limited customer contracts for its tracking units and system. In addition, the Company provides consulting services as an additional revenue source. As of September 30, 2018, the Company has not commenced its principal operations, generating limited test sales of its security product line.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.

The Company has net operating loss carryforwards available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that the Company will not realize a future tax benefit, a valuation allowance is established.

As of September 30, 2018, the Company had not yet filed its 2013 through 2017 annual corporate income tax returns, which were filed in April 2022. Due to the Company’s recurring losses, no corporate income taxes are due for these periods.

Net Income (Loss) Per Common Share~~: The Company calculates net income (loss) per share as required by ASC 450-10, "Earnings per Share."~~

Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods when anti-dilutive, common stock equivalents, if any, are not considered in the computation.

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018, AND DECEMBER 31, 2017

Other Comprehensive Income (Loss)~~: ASC 220, Comprehensive Income, establishes standards~~

Other comprehensive income includes unrealized gains and losses on securities available for sale, and unrealized gains and losses resulting from foreign exchange differences. During the ~~reporting and display of comprehensive loss and its components in the financial statements. As at~~nine months ended September 30, ~~2015,~~2018 and ~~December 31, 2014, the Company has recognized $15,550 and $88,058 in~~2017, respectively, other comprehensive losses of $2,412 and ~~has included these amounts as part~~$91,692 have been recognized. As of September 30, 2018 and 2017, respectively, other comprehensive income (loss) ~~on the accompanying statement~~ of ~~operations.~~

~~Revenue Recognition:The Company recognizes revenue in accordance with ASC 605,~~ ~~Revenue Recognition~~~~. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service~~($2,946) and $24,992 has been ~~provided, and collectability is reasonably assured. As at September 30, 2015,~~accumulated. The following represents the ~~Company has not commenced its principal operations.~~accumulated comprehensive income activity:

	Unrealized Foreign Currency Exchange			Unrealized Securities Gains (Losses)			Total Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2016	$	8,127		$	108,557		$	116,684
Gain (loss)		(1,228	)		(90,464	)		(91,692	)
Balance, September 30, 2017	$	6,899		$	(18,093	)	$	(24,992	)

Balance, December 31, 2017	$	6,703		$	(7,237	)	$	(534	)
Gain (loss)		--			(2,412	)		(2,412	)
Balance, September 30, 2018	$	6,703		$	(9,649	)	$	(2,946	)

~~The Company has continuing revenue from limited customer contracts for its PearTrack tracking units and system, and has made limited sales of its Ecologic Shine~~^®~~product. In addition, the Company provides consulting services as an additional revenue source.~~

~~Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of~~:In accordance with ASC 350-30, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company currently believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the Company’s products will continue. Either of these could result in future impairment of long-lived assets.

~~Due to the Company’s recurring losses, its intellectual properties were evaluated for impairment and it was determined that future cash flows were sufficient for recoverability of the assets.~~

~~Income Taxes~~:Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.

Stock Based Compensation:

The Company records stock-based compensation ~~in accordance with ASC 718,~~ ~~Share-Based Payments~~, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

~~Fair Value Measurements:Pursuant to ASC 820,~~ ~~Fair Value Measurements and Disclosures~~ ~~and ASC 825,~~ ~~Financial Instruments~~, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 and 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 and 825 prioritizes the inputs into three levels that may be used to measure fair value:


~~Level 1~~	~~Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.~~
~~Level 2~~	Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
~~Level 3~~	~~Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.~~

The Company’s financial instruments consist principally of cash, accounts payable, and accrued liabilities. Pursuant to ASC 820 and 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

~~Investments in Securities~~: Investments in securities are accounted for using the equity method if the investment provides the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee's Board of Directors, are considered in determining whether the equity method is appropriate. All other equity investments, which consist of investments for which the Company does not possess the ability to exercise significant influence, are accounted for under the mark to market method. Under the mark to market method of accounting, investments are marked to market, with unrealized gains and losses being excluded from earnings and reflected as a component of other comprehensive income.

Recent Accounting Pronouncements:

The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the US Securities and Exchange Commission (“SEC”), and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company. The Company has recently adopted the following new accounting standards:

~~Adopted~~:Adopted:

In ~~February 2013,~~January 2016, the FASB issued ASU No. ~~2013-02, Reporting~~2016-01, Financial Instruments-Overall (Subtopic 825-10: Recognition and Measurement of ~~Amounts Reclassified Out of Accumulated Other Comprehensive Income. This~~Financial Assets and Financial Liabilities. The new guidance is intended to improve the ~~culmination~~recognition, measurement, presentation and disclosure of ~~the FASB’s deliberation on reporting reclassification adjustments from accumulated~~financial instruments. Among other changes, there will no longer be an available-for-sale classification for which changes in fair value are currently reported in other comprehensive income ~~(AOCI). The amendments~~for equity securities with readily determinable fair values. Equity investments with readily determinable fair values will be measured at fair value with changes in fair value recognized in net income. ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. This standard2016-01 is effective ~~prospectively~~ for ~~annual and interim reporting periods~~the Company beginning ~~after December 15, 2012. The~~January 1, 2018, with early adoption ~~of this update did~~ not ~~have a material impact on its consolidated financial statements.~~permitted.

In ~~April 2013,~~March 2016, the FASB issued ASU No. ~~2013-07, Presentation~~2016-09, Compensation-Stock Compensation. The new guidance simplifies several aspects of ~~Financial Statements (Topic 205): Liquidation Basis~~the accounting for share-based payment transactions, including the income tax consequences, classification of ~~Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting~~awards as either equity or liabilities, and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. The adoption of this update did not have a material impact on its consolidated financial statements.

In July 2013, the FASB issued ASU No 2013-11, Presentation of an Unrecognized Tax Benefit When Net Operating Loss Carryforward Exists. The objective of ASU 2013-11 is to reduce diversity in practice by providing guidanceclassification on the ~~presentation~~statement of unrecognized tax benefits, and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and interim reporting periods therein. Early adoption is permitted. The adoption of this update did not have a material impact on its consolidated financial statements.

In June 2014, the FASB issued ASU No, 2014-10, Elimination of Certain Financial Reporting Requirements for Development Stage Entities. The objective of ASU 2014-10 is to reduce the cost and complexity associated with the incremental reporting requirements for development stage entities. This Update removes all incremental financial reporting requirements, and eliminates an exception provided to development stage entities in Topic 810.cash flows. The amendments in this standard are effective ~~retrospectively~~for the Company's annual year and first fiscal quarter beginning on January 1, 2017 with early adoption permitted.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. ASU 2016-10 clarifies the accounting for licenses of intellectual property as well as the identification of distinct performance obligations in a contract. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which is effective for the Company for annual reporting periods beginning on or after December 15, 2016. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09).

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. ASU 2016-12 addresses certain issues identified in the guidance on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09).

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance on eight specific cash flow issues, for which specific guidance had not previously been provided, with the objective of reducing the existing diversity in practice. The amendments in this update are effective for the Company for fiscal years beginning after December 15, 2017, and interim periods. Early adoption is permitted.

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018, AND DECEMBER 31, 2017

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. As part of the Board’s initiative to reduce complexity in accounting standards. The amendments in this update are effective for the Company for annual reporting periods beginning after December 15, ~~2014,~~2017, and interim ~~periods therein. Early adoption is permitted.~~

~~Not Yet Adopted~~:

In April 2014, the FASB issued ASU No. 2014-08 Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity. The objective of ASU No. 2014-08 is to clarifythe criteria for determining which disposals can be presented as discontinued operations and also modifies related disclosure requirements. The standard is required to be adopted by public business entities in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods. Early adoption is permitted for ~~new disposals beginning in the first quarter of 2014, provided~~interim or annual reporting periods for which financial statements have not been issued ~~before the release of this standard.~~ ~~The Company is evaluating the effect, if any, adoption of ASU No. 2014-08 will have on its consolidated financial statements.~~or made available for issuance.

In August 2014, the FASB issued ASU No 2014-15 Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The objective of ASU 2014-15 is to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15,October 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is evaluating the effect, if any, adoption of ASU No. 2014-15 will have on its consolidated financial statements.

~~In November 2014,~~ the FASB issued ASU No. ~~2014-17 Business Combinations~~2016-17, Consolidation (Topic ~~805): Pushdown Accounting. The objective of~~810), Interests Held through Related Parties That Are Under Common Control. ASU ~~2014-17 is to provide~~2016-17 amends the consolidation guidance on ~~whether and at what threshold an acquired~~how a reporting entity that is the single decision maker of a ~~business or nonprofit activity can apply pushdown accounting~~VIE should treat indirect interests in ~~its separate financial statements.~~the entity held through related parties that are under common control with the reporting entity. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The Company is evaluating the effect, if any, adoption of ASU No. 2014-17 will have on its consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01 Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This Update eliminates from GAAP the concept of extraordinary items. The amendments in this Updateupdate are effective for ~~fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply~~ the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities. The Company ~~is evaluating the effect, if any, adoption of ASU No. 2015-01 will have on its consolidated financial statements.~~

In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30: Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 is part of the Simplification Initiative, and its objective of to simplify the presentation of debt issuance costs. This Update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, ~~2015,~~2016, and interim periods. Early adoption is permitted.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. ASU 2017-01 assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments in this update are effective for the Company for annual periods ~~within those fiscal years.~~beginning after December 15, 2017, and interim periods. Early adoption is permitted under certain conditions.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test, which should reduce the cost and complexity of evaluating goodwill for impairment. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for the Company for annual periods beginning after December 15, 2019, and interim periods. Early adoption is permitted for ~~financial statements~~testing performed after January 1, 2017.

In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting. ASU 2017-09 clarifies and reduces both the (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. ASU 2017-09 is effective for the Company for annual periods beginning after December 15, 2017, and interim periods. Early adoption is permitted.

Not Yet Adopted:

In February 2016, the FASB issued ASU No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that ~~have not been previously issued.~~represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU is effective for the Company beginning January 1, 2019, with early adoption permitted. The Company is currently evaluating the ~~effect, if any, adoption~~impact of ~~ASU No. 2015-03 will have~~the application of this accounting standard update on its consolidated financial ~~statements.~~statements and related disclosures.

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). ASU 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. ASU 2017-11 also addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification®. ASU 2017-11 is effective for the Company for annual periods beginning after December 15, 2018, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its consolidated financial statements and related disclosures.

In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company for annual periods beginning after December 15, 2018, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its consolidated financial statements and related disclosures.

In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842), Targeted Improvements. ASU 2018-11 addresses certain issues in implementing ASU 2016-02, Leases, which was issued to increase transparency ad comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing transaction. ASU 2018-11 clarifies 1) comparative reporting requirements for initial adoption; and 2) for lessors only, separating lease and non-lease components in a contract and allocating the consideration in the contract to the separate components. The amendments in this Update related to separating components of a contract affect the amendments in Update 2016-02, which is effective for the Company for annual periods beginning after December 15, 2018, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its consolidated financial statements and related disclosures.

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018, AND DECEMBER 31, 2017

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. ASU 2018-13 is effective for the Company for annual periods beginning after December 15, 2019, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other Internal-Use Software (Subtopic 350-40). ASU 2018-15 was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-15 is effective for the Company for annual periods beginning after December 15, 2019, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its consolidated financial statements and related disclosures.

Recently Issued Accounting Standards ~~Updates: Other recent~~Updates:

There were various updates recently issued, most of which represented technical corrections to the accounting ~~pronouncements issued by~~literature or application to specific industries. None of the ~~FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or~~updates are ~~not believed by management~~expected to have a material impact on the Company's ~~present~~consolidated financial position, results of operations or ~~future financial statements.~~cash flows.

NOTE 3. INVESTMENT IN SECURITIES

As of September 30, ~~2015,~~2018, and December 31, ~~2014,~~2017, the Company held 12,061,854 shares of Amazonas Florestal, Ltd. (OTC: AZFL) common ~~stock with~~stock. The securities are classified as Level 1 investments (Note 2, Fair Value Hierarchy), and are valued using the quoted market prices. During the nine months ended September 30, 2018 and 2017, respectively, $2,412 and $90,464 in unrealized losses were recognized and included as part of comprehensive income (loss). As of September 30, 2018, and December 31, 2017, respectively, $9,649 and $7,237 in cumulative unrealized losses were recognized, and the securities held a fair value of ~~$1,206~~$2,413 and ~~$16,887, respectively.~~$4,825.

NOTE 4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	September 30, 2018			December 31, 2017
Office equipment	$	2,362		$	2,362
Accumulated depreciation		(1,534	)		(1,180	)
Property and equipment, net	$	828		$	1,182

September 30, 2015

December 31, 2014

Office equipment
$
2,362

$
––

Accumulated depreciation

(118
)

––

Property and equipment, net

2,244

––

~~Depreciation expense totaled $118 and $100 for~~During the nine months ended September 30, ~~2015~~2018 and ~~2014, respectively.~~2017, respectively, $354 and $354 in depreciation was expensed.

NOTE 5. ~~INTANGIBLE ASSETS~~

~~Intangible assets consists of the following:~~ACCOUNTS PAYABLE AND ACCRUED EXPENSES

September 30, 2015

December 31, 2014

Intellectual property, unencumbered
$
2,156,245

$
450,000

Accumulated amortization

(123,159
)

(15,000
)
Intellectual property, unencumbered, net

2,033,086

435,000

Intellectual property, pledged to creditors

1,567.060

1,567.060

Accumulated amortization

(189,790
)

(111,436
)
Intellectual property, pledged to creditors, net
$
1,377,270

$
1,455,624

~~Amortization expense totaled $186,513~~Accounts payable and ~~$85,853 for the nine months ended September 30, 2015 and 2014, respectively.~~accrued expenses consist of:

~~NOTE 6. DEFERRED REVENUE~~

In connection with a certain Service Agreement dated June 30, 2014, revenue received in the amount of $450,000 has been deferred, to be recognized over the term of the agreement, or twelve (12) months. Due to certain events beyond the Company’s control, no services were performed during the nine months ended September 30, 2015. As a result, no revenues have been recognized during the nine months ended September 30, 2015. As of September 30, 2015, and December 31, 2014, the Company has recognized $0 and $225,000 as revenues earned, and has deferred $225,000, to be earned in the future.

	September 30, 2018		December 31, 2017
Accounts payable-vendors	$	693,425	$	680,719
Accrued payroll and taxes		71,995		44,995
Accrued interest		843,092		690,223
Other liabilities		779		1,940

Total accounts payable and accrued expenses	$	1,609,291	$	1,417,877

NOTE 7.6. NOTES AND LOANS PAYABLE

Notes and loans payable consists of the following:


	September 30, 2015		December 31, 2014
					September 30, 2018		December 31, 2017
Loans payable	$	79,320	$	98,489	$	44,605	$	44,605
Notes payable-short term		125,000		125,000
Notes payable-short-term-convertible		688,755		688,755
Notes payable, short term						125,000		125,000
Total notes and loans payable	$	893,075	$	912,244		169,605		169,605

Notes payable, short-term, convertible						500,000		688,755
Total					$	669,605	$	858,360

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018, AND DECEMBER 31, 2017

Notes payable includes the following convertible promissory notes at September 30, ~~2015:~~

Principal
Interest Rate
Conversion Rate
Maturity Date

$188,755
7%
$0.05
1 year from demand
$500,000
5%
$0.25
12/31/2015

~~Notes payable consists of unsecured promissory notes issued in the principal sum of $893,075 and $912,244 as of September 30, 2015,~~2018, and December 31, ~~2014, respectively. The notes bear interest at a rate of between 5% to 15% per annum, and are due within one (1) year of written demand or by December 31, 2015.~~2017:

Description	Principal			Interest Rate (%)	Conversion Rate	Maturity Date

Kasper Group, Ltd.	$	188,755	[1]	7	$0.05	1 year from demand	[1]
Matrix Advisors, Inc.		500,000		5	$0.25	12/31/2015	[2]

Total convertible notes payable	$	688,755

Loans payable consists of monies provided to the Company by a third-party for the purpose of overhead advances and product development. The loan is unsecured, bears no interest, and is payable upon demand. As of September 30, 2015, and December 31, 2014, respectively, $79,320 and $98,489 is outstanding, and no[1] No demand has been made. Reclassified as related party transaction in September 2018 (Note 7).

[2] No change in terms of promissory note due to breach. The debt was converted in November 2021.

~~As of~~

During the nine months ended September 30, ~~2015,~~2018, and the year ended December 31, ~~2014,~~2017, respectively, interest in the amount of ~~$211,953~~$47,689 and ~~$163,177,~~$65,213 was expensed; and $68,726 and $0 was reclassified to related party interest. As of September 30, 2018, and December 31, 2017, respectively, interest in the amount of $337,958 and $358,995 has been accrued and is included as part of accrued expenses on the accompanying consolidated balance sheets.

NOTE 8.7. RELATED PARTY TRANSACTIONS

Related party transactions consists of the following:

							September 30, 2018			December 31, 2017
	September 30, 2015			December 31, 2014
Notes payable, convertible, short-term							$	688,985		$	500,230

Notes payable-short-term	$	787,837		$	787,837
Notes payable, long-term, secured								2,000,000			2,000,000
Less: unamortized discount								(16,768	)		(81,469	)
Total long-term notes payable, secured, net of discount								1,983,232			1,918,531

Notes payable-long-term-senior		2,000,000			2,000,000
Less: unamortized discount		(276,520	)		(341,221	)
Total long-term notes payable, senior, net of discount		1,723,480			1,658,779

Notes payable-long-term-subordinate		720,830			449,583
Less: unamortized discount		(17,292	)		––
Total long-term notes payable, subordinate, net of discount		703,538			449,583
Notes payable, convertible, long-term, subordinate								2,423,720			2,064,044
Total long-term notes payable		2,427,018			2,108,362			4,406,952			3,982,575
Total notes payable		3,214,855			2,896,199			5,095,937			4,482,805

Accrued compensation		341,550			118,500			571,170			517,991
Reimbursed expenses payable		46,332			179,081
Reimbursable expenses/cash advances payable								152,706			152,706
Total related party payable		387,882			297,581			723,876			670,697

Total related party transactions	$	3,602,737		$	3,193,780		$	5,819,813		$	5,153,502

Related party notes payable consists of the following convertible notes payable at September 30, ~~2015:~~2018, and December 31, 2017:

Description	Principal			Interest Rate (%)	Conversion Rate	Maturity Date

Short-term:
Huntington Chase Financial Group	$	413,913		7	$0.05	1 year from demand	[1]
William Nesbitt		86,317		5	$0.05	Funding	[2]
Kasper Group, Ltd.		188,755	[3]	7	$0.05	1 year from demand	[3]
Total short-term		688,985

Long-term:
Huntington Chase Financial Group		1,103,000		5	$0.05	12/31/2021
E. William Withrow Jr.		894,256		5	$0.05	12/31/2021
John Macey		426,464		4	$0.25	12/31/2023
Total long-term		2,423,720

Total convertible notes payable	$	3,112,705

[1] No demand has been made

[2] The requisite funding goals for repayment have not been met.

[3] Reclassified from non-related party (Note 6).

ENIGMA-BULWARK, LTD.

Description
Principal
Interest Rate
Conversion Rate
Maturity Date

Note payable-long-term-senior
$
2,000,000
5%
$0.40
12/09/2018
Less: unamortized discount

(276,520
)

Note payable-long-term-senior, net of discount

1,723,480

Note payable-short term

313,913
7%
$0.05
1 yr demand
Note payable-short-term

100,000
7%
$0.07
1 yr demand
Note payable-short term

373,924
5%
$0.05
Funding
Note payable-long-term, net of discount

703,538
5%
$0.25
12/31/2017

Total
$
3,214,855

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018, AND DECEMBER 31, 2017

All outstanding promissory notes to related ~~party notes payable~~parties bear interest at ~~the~~a rate of 5%5 to 7%7 percent per annum, are due and payable within between one (1) year of written demand ~~and by~~to December ~~9, 2018,~~31, 2023, or upon certain equity funding, and are convertible into the Company’s common stock at a price of between $0.05 to ~~$0.40~~$0.25 per share.

As atof September 30, ~~2015,~~2018, and December 31, ~~2014,~~2017, respectively, affiliates and related parties are due a total of ~~$3,602,737~~$5,819,813 and ~~$3,193,780,~~$5,153,502, which is comprised of ~~loans~~promissory notes to related parties, net of unamortized discounts of $16,768 and $81,469, in the amount of $5,095,937 and $4,482,805; accrued compensation in the amount of $571,170 and $517,991; and reimbursable expenses/cash advances to the Company in the amount of ~~$3,214,855~~$152,706 and ~~$2,896,199, accrued compensation of $341,550 and $118,500, and reimbursed expenses of $46,332 and $179,081,~~$152,706; for a net increase of ~~$408,957.~~$666,311 and $672,262. During the nine months ended September 30, ~~2015, loans~~2018, and the year ended December 31, 2017, respectively, promissory notes to ~~the Company~~related parties increased by ~~$318,656, unpaid~~$548,431 and $415,000, unamortized discounts decreased by $64,701 and $86,505, accrued compensation increased by ~~$223,050~~$53,179 and $161,156, and reimbursable expenses ~~decreased~~cash advances increased by ~~$132,749.~~$0 and $9,601.

~~The Company’s increase in loans~~During the nine months ended September 30, 2018, and the year ended December 31, 2017, respectively, promissory notes to ~~the Company~~related parties, net of ~~$318,656 is due to~~unamortized discounts, increased by $613,132 and $501,505, as a result of an increase in ~~unpaid~~accrued compensation owed to related parties in the amount of ~~$271,247 which has been~~$359,676 and $415,000 converted to convertible ~~notes payable;~~promissory notes; $188,755 and $0 reclassified from non-related party promissory notes; and a decrease in unamortized discount in the amount of ~~$47,409.~~$64,701 and $86,505.

The Company’s increase in unpaid compensation of $223,050 is due to an increase in unpaid compensation of $494,297 due to related parties, of which $271,247 was converted into convertible notes payable.

~~The Company’s expenses reimbursable to related parties decreased by $132,749 during~~During the nine months ended September 30, ~~2015 .~~2018, and the year ended December 31, 2017, respectively, $412,855 and $576,156 in related party compensation was accrued, of which $359,676 and $415,000 was converted into convertible promissory notes, for a net increase in accrued compensation in the amount of $53,179 and $161,156.

During the nine months ended September 30, 2018, and the year ended December 31, 2017, respectively, reimbursable expenses/cash advances owed to related parties increased by $0 and $9,601 as a result of an increase in cash loans to the Company and expenses paid by related parties on behalf of the Company in the amount of $0 and $10,802; and repayments to related parties in the amount of $0 and $1,201.

During the nine months ended September 30, 2018, and the year ended December 31, 2017, respectively, $105,180 and $119,308 in interest on related party loans was expensed; and $68,725 and $0 was reclassified from non-related party interest. As of September 30, ~~2015,~~2018, and December 31, ~~2014,~~2017, respectively, $505,134 and $331,229 in interest on related party loans has been accrued, ~~interest payable to related parties was $132,482 and $81,020, respectively,~~ and is included as part of accrued expenses on the accompanying consolidated balance sheets.

NOTE ~~9. COMMITMENTS AND CONTINGENCIES~~

On January 5, 2015, the Company entered into a Consulting Agreement (“Consulting Agreement”) for services provided to the Company in the area of business planning and marketing. The Consulting Agreement is for a term of one (1) year, includes deferred cash compensation in the amount of $1,250 per month, and stock compensation in the amount of 250,000 shares. As of September 30, 2015, cash compensation of $11,000 has been deferred.

On January 21, 2015, the Company entered into an Assignment and Licensed Rights Agreement (“Assignment and License Agreement”) by and between the Company and PearLoxx Ltd. (“PearLoxx”) for the assignment and exclusive license to the Company of certain PearLoxx patented technology (the “Product”) in perpetuity. Pursuant to the terms and conditions of the Assignment and License Agreement, royalties are payable to PearLoxx on certain revenues generated from the Product as follows: 5% up to $5,000,000; 3% between $5,000,001 and $10,000,000; and 2.5% thereafter. On March 9, 2015, the Assignment and License Agreement was amended to, among other things, include as part of the consideration for the Product, the right for PearLoxx to purchase 5,706,506 shares of the Company’s common stock at $0.001 per share, valued at $1,711,952.

On March 9, 2015, the Company entered into a Consulting Agreement (“Consulting Agreement”) for services provided to the Company in the area of international sales. The Consulting Agreement commences April 1, 2015, is for a term of five (5) years, and includes compensation in the form of commissions on certain revenues generated from the PearTrack and/or PearLoxx product, as follows: 50% up to $500,000,000; and 30% thereafter. As of September 30, 2015, no commissionable sales have been made under this Consulting Agreement.

~~NOTE 10.~~8. CAPITAL STOCK

The total number of authorized shares of common stock that may be issued by the Company is 250,000,000 shares with a par value of $0.001; and the total number of authorized preferred stock is 25,000,000 shares with a par value of $0.001.

As of September 30, 2018, and December 31, 2017, the Company had 69,382,753 shares of common stock issued and outstanding.

NOTE 9. STOCK OPTIONS AND AWARDS

Stock Options

As of September 30, 2018, and December 31, 2017, the Company had 102,500 stock options issued and outstanding.

Outstanding and Exercisable Options
		Remaining	Exercise Price
	Number of	Contractual Life	times Number		Weighted Average
Exercise Price	Shares	(in years)	of Shares		Exercise Price

$3.20	102,500	2.55	$	328,000		$3.20
	102,500		$	328,000		$3.20

Options Activity	Number	Weighted Average
	of Shares	Exercise Price

Outstanding at December 31, 2017	102,500		$3.20
Granted	--		--
Exercised	--		--
Expired / Cancelled	--		--
Outstanding at September 30, 2018	102,500		$3.20

During the nine months ended September 30, ~~2015,~~2018, and the year ended December 31, 2014, respectively, a total of $502,147 and $272,179 in deferred stock compensation was expensed. Deferred stock compensation of $230,607 and $675,504 remains at September 30, 2015, and December 31, 2014, respectively, to be amortized over the next 17 months.

~~As of September 30, 2015, and December 31, 2014, respectively, the Company had 69,454,714 and 59,965,091 shares of common stock issued and outstanding.~~

~~NOTE 11. WARRANTS AND OPTIONS~~

~~As of September 30, 2015, and December 31, 2014, respectively, the Company has no warrants and 327,500 and 366,000 options issued and outstanding.~~

Outstanding and Exercisable Options

Remaining

Exercise Price

Number of

Contractual Life

times Number

Weighted Average

Exercise Price

Shares

(in years)

of Shares

Exercise Price

$3.20

75,000

0.50

$
240,000

$3.50

$3.20

102,500

5.50

328,000

$3.50

$2.00

150,000

1.25

300,000

$3.10

327,500

$
868,000

$3.10

Options Activity
Number

Weighted Average

Of Shares

Exercise Price

Outstanding at December 31, 2014
366,000

$3.10

Issued
––

––

Exercised
––

––

Expired / Cancelled
(38,500
)

$3.70

Outstanding at September 30, 2015
327,500

$3.10

~~During the nine months ended September 30, 2015, and the year ended December 31, 2014, respectively,~~2017, the Company expensed ~~a total of $0 and $60,000 in~~no stock option compensation. There ~~remains~~remained no deferred stock option compensation at September 30, ~~2015,~~2018, and December 31, ~~2014, respectively.~~2017.

~~NOTE 12. RESTRICTED STOCK AWARDS~~Restricted Stock Awards

During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, no restricted stock awards were granted, no restricted stock awards vested, and no deferred stock compensation was expensed. As of September 30, ~~2015,~~2018, and December 31, ~~2014, the Company has awarded a total of 1,000,000 Restricted Stock Units, for which a total of $250,000 has been recorded as~~2017, respectively, no shares remain to be vested, and no deferred ~~compensation. During the nine months ended September~~stock compensation remains to be expensed.

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, ~~2015, and the year ended December~~2018, AND DECEMBER 31, 2014, respectively, the Company expensed a total of $93,747 and $125,000 in deferred compensation. There remains $20,836 and $114,583 in deferred compensation at September 30, 2015, and December 31, 2014, respectively.2017

~~NOTE 13. INCOME TAXES~~

~~The significant portions of the deferred tax assets at September 30, 2015, and December 31, 2014, are presented below:~~

September 30, 2015

December 31, 2014

Deferred tax assets:

Net operating loss carry forwards
$
4,439,000

$
3,863,000

Less valuation allowance

(4,439,000
)

(3,863,000
)
Net deferred tax asset
$
––

$
––

~~A reconciliation of income taxes computed at the US federal statutory income tax rate to the change in valuation allowance is as follows:~~

For the nine months ended

For the year ended

September 30, 2015

December 31, 2014

Income (loss) before taxes

(1,619,790
)

(1,920,226
)
Statutory rate

34%

34%

Computed expected tax payable (recovery)
$
552,000

$
653,000

Non-recognizable income (loss)

(4,000
)

(34,000
)
Non-deductible expenses

––

––

Change in valuation allowance

(548,000
)

(619,000
)
Reported income taxes
$
––

$
––

The increase in the valuation allowance for continuing operations was approximately $548,000 and $619,000 for the nine months ended September 30, 2015, and the year ended December 31, 2014, respectively.

As of September 30, 2015, the Company had cumulative net operating loss carryforwards of approximately $13,054,000 for federal income tax purposes, and $11,027,000 for state income tax purposes, which begin to expire in the year 01/01/2029.

NOTE ~~14.~~10. SUBSEQUENT EVENTS

The Company has evaluated the events and transactions for recognition or disclosure subsequent to September 30, ~~2015,~~2018, and has determined that there have been no events that would require ~~disclosure.~~disclosure, with the exception of the following:

During the period October 1, 2018, to December 31, 2022, the Company increased its loans from related parties by $373,810, from a total of $5,891,813 at September 30, 2018, to $6,004,868 at December 31, 2022. The increase represents (a) an increase in promissory notes in the amount of $185,055, as a result of (i) $110,995 reclassified from non-related party transactions, (ii) $426,464 reclassified to non-related party transactions, (iii) $4,029,845 converted from accrued compensation, (iv) an increase in discounts resulting from beneficial conversion features of $1,052,494, (v) a decrease in long-term secured promissory notes in the amount of $2,000,000 resulting from the cancellation of debt, (vi) a decrease in unamortized discount of $758,384, (vii) payments to the Company in the amount of $5,500 for stock award payments, (viii) $521,557 converted to common stock, and (ix) payments to related parties in the amount of $499,975; (b) a decrease in accrued compensation of $92,447 as a result of (i) $4,054,870 in accrued compensation, of which $4,029,845 was converted into promissory notes, (ii) $55,000 in accrued compensation reclassified to non-related party transactions, (iii) payments to the Company in the amount of $6,500 for related party stock awards, and (iv) payments to related parties in the amount of $55,972; and (c) a decrease in reimbursable expenses and cash advances to the Company of $115,752. All outstanding related party promissory notes bear interest at a rate of 5 to 7 percent per annum, are due and payable between one (1) year of written demand and December 31, 2024, or upon certain equity funding, and are convertible into the Company’s common stock at a price of between $0.05 to $0.25 per share, or the 20-day average trading price.

On October 1, 2018, the Company entered into an Employment Agreement with Mr. Kyle W. Withrow to serve as the Company’s Chief Executive Officer. The agreement replaces any other written agreement with the Company or its subsidiaries, is for an initial term of three (3) years, and provides a base compensation of $150,000 per year, as well as customary bonuses and employee benefits. In addition, the agreement includes a grant to purchase 1,000,000 shares of the Company’s restricted common stock, valued at $10,000, for $0.001 per share.

On October 1, 2018, in connection with the Employment Agreement, the Company issued 1,000,000 shares of its restricted common stock at $0.001 per share, for cash in the amount of $1,000.

On October 11, 2018, the Company executed an Intellectual Property Agreement (the “Safer Agreement”) with Safer, Inc., a Florida corporation (the “Seller”), for the acquisition of certain intellectual property, as defined within the Safer Agreement, in the area of security and risk management (“Intellectual Property”). Pursuant to the Safer Agreement, in exchange for all rights, title and interest in the Intellectual Property, among other things, the Company shall deliver to Seller:

1.Common Stock Purchase Agreement providing for the Seller the right to purchase 3,500,000 shares of the Company’s restricted common stock at a price of $0.001 per share, for $3,500 cash; and

2.Revenue Sharing Agreement providing for a cash earn-out of 3% to be paid to the Seller, up to $1,000,000 paid to Seller, derived from the Adjusted Gross Revenue generated by the Company in connection with the Intellectual Property; and

3.Royalty Agreement providing for a royalty of 1.5% of the Adjusted Gross Revenue generated by the Company in connection with the Intellectual Property.

On October 11, 2018, in connection with the Safer Agreement, the Company issued 3,500,000 shares of its restricted common stock at $0.001 per share, for cash in the amount of $3,500.

On November 1, 2018, the Company entered into a consulting agreement with MJ Management Services, Inc., for the services of Ms. Calli R. Bucci to serve as the Company’s Chief Financial Officer. The agreement replaces any other written agreement with the Company or its subsidiaries, is for an initial term of three (3) years, and provides a base compensation of $150,000 per year, to be deferred until the Company reaches certain funding goals. In addition, the agreement includes a grant of 500,000 options to purchase shares of the Company’s common stock at an exercise price of $0.10 per share. The options are exercisable for a period of five (5) years, vest quarterly over a period of twenty-four (24) months, and were valued at $0 using the Black-Scholes method. The assumptions used in valuing the options were: expected term 4.75 years, expected volatility 35.59%, risk free interest rate 2.96%, and dividend yield 0%.

On November 1, 2018, the Company entered into a Consulting Agreement with Huntington Chase LLC for the services of Mr. Edward W. Withrow III. The agreement replaces any other written agreement with the Company or its subsidiaries, is for an initial term of three (3) years, and provides a base compensation of $240,000 per year.

On December 31, 2018, in connection with the Company’s inability to successfully commercialize the intellectual property acquired from PearTrack Systems Group in 2013 (collectively, the “PearTrack IP”), all rights, title and interest in the PearTrack IP reverted to the former licensees and, pursuant to the terms of the collateralized agreement, the related Senior Secured Convertible Note (the “Note”) issued to the former licensees (the “Note Holders”) is canceled. In addition, all rights to future royalties collectible under any sub-license previously issued by the Company for the PearTrack IP reverts to the Note Holders. As a result, in 2018, the Company has recognized a gain on the extinguishment of debt of $2,000,000.

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018, AND DECEMBER 31, 2017

On May 1, 2019, the Company entered into a Consulting Agreement with Mr. David Rocke. The agreement is for an initial term of three (3) years, and provides a base compensation of $150,000 per year, to be deferred until the Company reaches certain funding goals, as well as 12.5% of Enigma-Bulwark Security, Inc. adjusted gross earnings, as defined within the agreement. In addition, the agreement includes a grant of 6,875,093 options to purchase shares of the Company’s common stock, valued at $39,875 using the Black-Scholes method, at an exercise price of $0.005 per share. The options are exercisable for a period of five (5) years, of which 50% vest when certain performance goals are met, and the remainder vest when certain funding goals are met. The assumptions used in valuing the options were: expected term 4.00 years, expected volatility 38.58%, risk free interest rate 2.15%, and dividend yield 0%.

On May 1, 2019, the Company, through its wholly-owned subsidiary, Enigma-Bulwark Risk Management, Inc., entered into a Consulting Agreement with Mr. Michael Gabriele, to serve as its President, and the President of its subsidiary, Enigma-Bulwark Security, Inc. The agreement is for an initial term of three (3) years, and provides a base compensation of $175,000 per year, to be deferred until the Company reaches certain funding goals, as well as 12.5% of Enigma-Bulwark Security, Inc. adjusted gross earnings, as defined within the agreement. In addition, the agreement includes a grant of 2,750,040 options to purchase shares of the Company’s common stock, valued at $15,950 using the Black-Scholes method, at an exercise price of $0.005 per share. The options are exercisable for a period of five (5) years, of which 50% vest when certain performance goals are met, and the remainder vest when certain funding goals are met. The assumptions used in valuing the options were: expected term 4.00 years, expected volatility 38.58%, risk free interest rate 2.15%, and dividend yield 0%.

On August 29, 2019, the Company entered into a Non-Compete, Non-Dilution and Registration Rights Agreement (“NC Agreement”) with Mr. David Rocke. The agreement is for an initial term of five (5) years, and provides as compensation a grant to purchase 6,667,000 shares of the Company’s restricted common stock, valued at $66,670,for $0.001 per share, plus the issuance of shares of the Company’s restricted common stock equal to seven percent (7%) of any issuance of common stock through May 15, 2019, originating from any financial instrument issued by the Company or its subsidiaries, in exchange for certain restrictions placed upon Mr. Rocke’s business activities.

On August 29, 2019, the Company entered into a Non-Compete, Non-Dilution and Registration Rights Agreement (“NC Agreement”) with Mr. Michael Gabriele, the President of the Company’s subsidiary, Enigma-Bulwark Risk Management, Inc. The agreement is for an initial term of five (5) years, and provides as compensation a grant to purchase 6,667,000 shares of the Company’s restricted common stock, valued at $66,670, for $0.001 per share, plus the issuance of shares of the Company’s restricted common stock equal to seven percent (7%) of any issuance of common stock through May 15, 2019, originating from any financial instrument issued by the Company or its subsidiaries, in exchange for certain restrictions placed upon Mr. Gabriele’s business activities.

On August 29, 2019, in connection with the Rocke and Gabriele NC Agreement, the Company issued 13,334,000 shares of its restricted common stock at $0.001 per share for cash in the amount of $13,334, plus 210,000 shares under the non-dilution provision at $0.001 per share for cash in the amount of $210.

On August 30, 2019, the Company formed Enigma-Bulwark Risk Management, Inc., a Delaware corporation and wholly-owned subsidiary, and acquired 100% of the common stock of Enigma-Bulwark Security, Inc., a Delaware corporation also formed by the Company.

On September 1, 2019, the Company, through its wholly-owned subsidiary, Enigma-Bulwark Risk Management, Inc., entered into a Consulting Agreement with Mr. Clive Oosthuizen to serve as its Chief Executive Officer. The agreement is for an initial term of three (3) years, and provides a base compensation of $180,000 year one, $210,000 year two, and $240,000 year three, to be deferred until the Company reaches certain funding goals. In addition, the agreement includes a $25,000 signing bonus, and a grant of 1,250,000 options to purchase shares of the Company’s common stock, valued at $625 using the Black-Scholes method, at an exercise price of $0.05 per share. The options are exercisable for a period of five (5) years, and vest periodically over a period of thirty-six (36) months. The assumptions used in valuing the options were: expected term 5.75 years, expected volatility 41.3%, risk free interest rate 1.84%, and dividend yield 0%.

On September 20, 2019, in connection with the exercise of certain stock options, the Company issued 4,010,470 shares of its restricted common stock to related parties at an exercise price of $0.005, for cash in the amount of $20,052.

On October 1, 2019, the Company entered into a Consulting Agreement with Ms. Yinuo Jiang to serve as the Company’s Corporate Secretary effective October 8, 2019, among other duties. The agreement is for an initial term of three (3) years, and provides a base compensation of $100,000 per year, to be deferred until the Company reaches certain funding goals. In addition, the agreement includes a grant to purchase 1,000,000 shares of the Company’s restricted common stock, valued at $10,000, for $0.001 per share.

On October 1, 2019, in connection with the Consulting Agreement, the Company issued 1,000,000 shares of its restricted common stock at $0.001 per share, for cash in the amount of $1,000.

On October 6, 2019, pursuant to a resolution of the board of directors, the Company issued an aggregate of 6,000,000 shares of its restricted common stock, valued at $60,000, to its officers and directors at $0.001 per share, for cash in the amount of $6,000.

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018, AND DECEMBER 31, 2017

On October 10, 2019, the Company entered into a Non-Compete, Non-Dilution and Registration Rights Agreement (“NC Agreement”) with Mr. Clive Oosthuizen, the Chief Executive Officer of the Company’s subsidiary, Enigma-Bulwark Risk Management, Inc. The agreement is for an initial term of five (5) years, and provides as compensation a grant to purchase 4,000,000 shares of the Company’s restricted common stock, valued at $360,000, for $0.001 per share, plus the issuance of shares of the Company’s restricted common stock equal to four and one-half percent (4.5%) of any issuance of common stock originating from any financial instrument issued by the Company or its subsidiaries during the term, in exchange for certain restrictions placed upon Mr. Oosthuizen’s business activities.

On October 10, 2019, in connection with the Oosthuizen NC Agreement, the Company issued 4,000,000 shares of its restricted common stock at $0.001 per share for cash in the amount of $4,000.

On December 20, 2019, in connection with the exercise of certain stock options, the Company issued 802,094 shares of its restricted common stock to related parties at an exercise price of $0.005 for cash in the amount of $4,010.

On September 8, 2020, the Company, through its wholly-owned subsidiary, Enigma-Bulwark Risk Management, Inc., entered into a Joint Venture Agreement (the “JV Agreement”) with Prime African Security, Ltd., a South African corporation (“Prime”), to provide security and risk management services in South Africa. The joint venture formed Prime Enigma Africa (Pty) Ltd., a South African corporation (the “Joint Venture”), for which Prime owns 51% of the common stock and the Company owns 49%. The JV Agreement is for an initial term of three (3) years, and automatically renews unless canceled in writing by either party.

On August 31, 2021, in connection with the conversion of related party debt in the amount of $1,238,251, the Company issued an aggregate of 23,066,991 shares of its restricted Common Stock to six (6) related parties, including three (3) officers, of which $941,096 was at a conversion price of $0.05 per share, and $297,155 was at a conversion price of $0.07 per share.

On November 5, 2021, in connection with the conversion of debt in the amount of $696,301, the Company issued 2,785,205 shares of its restricted Common Stock at a conversion price of $0.25 per share.

On January 1, 2022, in connection with a consulting agreement, the Company issued 2,500,000 shares of restricted common stock at $0.001 per share for cash in the amount of $2,500.

Management Changes:

On September 19, 2018, Mr. E. William Withrow Jr. resigned as President and Chief Executive Officer. This resignation did not involve any disagreement with the Company. Mr. Kyle W. Withrow, succeeded him to serve as President and Chief Executive Officer until the next annual meeting of the shareholders and/or until he, or his successor is duly appointed.

On September 20, 2019, during a meeting of the board of directors, Mr. John D. Macy was not re-elected to the board of directors.

On October 4, 2019, Mr. Clive Oosthuizen, Mr. David M. Rocke and Ms. Calli R. Bucci were appointed to the Board, to serve until the next annual meeting of the shareholders.

On October 8, 2019, Ms. Calli R. Bucci resigned as Corporate Secretary. This resignation did not involve any disagreement with the Company. Ms. Yinuo “Rachel” Jiang succeeded her to serve as Corporate Secretary until the next annual meeting of the shareholders and/or until she, or her successor is duly appointed.

On January 12, 2021, Mr. John L. Ogden resigned as a Board member. This resignation did not involve any disagreement with the Company. Mr. Kyle W. Withrow, the Company’s President and Chief Executive Officer, succeeded him as a director until the next annual meeting of the shareholders and/or until he, or his successor is duly appointed.

On April 6, 2021, Mr. E. William Withrow Jr. resigned as Executive Chairman of the Board. His resignation did not involve any disagreement with the Company. Mr. Clive Oosthuizen, a Board member, and the President of the Company’s subsidiary, Enigma-Bulwark Risk Management, Inc., succeeded him.

On April 6, 2021, Mr. Kyle W. Withrow resigned as the Company President and Chief Executive Officer, and as a Board member. His resignation did not involve any disagreement with the Company. Mr. Oosthuizen succeeded him as President and Chief Executive Officer until the next annual meeting of the shareholders and/or until he, or his successor, is duly appointed. The vacant Board member seat resulting from Mr. Withrow’s resignation will remain open until a new member is elected at the next annual meeting of the shareholders, or is duly appointed by the Board.

On April 12, 2021, Mr. David Rocke resigned as a Board member and consultant. His resignation was preceded by the Company’s inquiry into Mr. Rocke’s performance in connection with his Consulting Agreement dated May 1, 2019. The vacant Board member seat resulting from Mr. Rocke’s resignation will remain open until a new member is elected at the next annual meeting of the shareholders, or is duly appointed by the Board.

On April 12, 2021, Mr. Michael Gabriele resigned as President of Enigma-Bulwark Risk Management, Inc. and its subsidiaries. His resignation did not involve any disagreement with the Company.

* * * * *

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

Forward-Looking Statements

This quarterly report contains forward-looking statements. These statements relate to future events or the Company’s future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause the Company’s or the Company’s industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

The Company’s unaudited consolidated financial statements are stated in United States Dollars (US$), and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with the Company’s unaudited consolidated financial statements and the related notes that appear elsewhere in this quarterly report.

The following discussion contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common shares" refer to the common shares of the Company’s capital stock.

As used in this quarterly report and unless otherwise indicated, the terms “we”, “us”, “our”, “our company” and ~~“PearTrack”~~“Enigma” refer to ~~PearTrack Security Systems, Inc.~~Enigma-Bulwark, Ltd., and its subsidiaries, unless otherwise indicated.

Corporate History

Enigma-Bulwark, Ltd. (“Enigma” or “Company”) is a security and ~~logistics~~risk management company that provides physical security, technology-systems integration, and risk management advisory services. Services offered to assess and mitigate risk include security guards, risk management analysis, and proprietary and third-party technology and software. Target markets include corporations, governments and individuals across the globe.

During 2014 through 2016, the Company, operating as PearTrack Security Systems, Inc., initiated a test deployment of its platform and system globally, and managed clients seeking to track their assets in motion and in remote locations.

During 2016 through 2018, the Company sought financing for the finalization of the PearLoxx container locking and tracking prototype. In addition, strategic acquisitions were pursued to expand the Company’s intellectual property portfolio.

Due to the Company’s inability to successfully commercialize the PearTrack IP tracking platform acquired in 2013, all rights, title and interest in the PearTrack IP reverted to the former licensees on December 31, 2018, and, pursuant to the terms of the collateralized agreement, the related Note issued to the licensors (the “Note Holders”) was canceled. In addition, all rights to future royalties collectible under any sub-license previously issued by the Company for the PearTrack IP reverted to the Note Holders. As a result, in 2018, the Company recognized a gain on the extinguishment of debt of $2,000,000.

Although the PearTrack IP commercialization was unsuccessful, the Company continued to focus on security and risk management, and acquired intellectual property that is based on a patent-pending ² interactive spontaneous video security technology (the “Safer IP”). On October 11, 2018, the Company executed an Intellectual Property Purchase Agreement (the “Safer Agreement”) with Safer, Inc., a Florida corporation (the “Seller”), for the acquisition of the Safer IP. Pursuant to the Safer Agreement, in exchange for all rights, title and interest in the Safer IP, among other things, the Company delivered to Seller:

1.Common Stock Purchase Agreement providing for the Seller the right to purchase 3,500,000 shares of the Company’s restricted common stock at a price of $0.001 per share, for $3,500 cash; and

3.Royalty Agreement providing for a royalty of 1.5% of the Adjusted Gross Revenue generated by the Company in connection with the Safer IP.

In 2019, the Company was presented with an opportunity to start a security and risk management business headquartered in ~~Santa Monica, CA.~~ Cape Town, South Africa, and identified key management to operate the business unit. On August 30, 2019, the Company formed Enigma-Bulwark Risk Management, Inc., a Delaware corporation and wholly-owned subsidiary (“EBRM”), to maintain the Company’s security and risk management operations and assets.

²On July 21, 2021, the Company received a Notice of Allowance from the United States Patent and Trademark Office that its Patent Application 16/618,038 “Network Based Video Surveillance and Logistics for Multiple Users” was granted and would be issued to the Company.

In addition, EBRM acquired 100% of the shares of Enigma-Bulwark Security, Inc., a Delaware corporation formed by the Company in May 2019 (“EBS”). The Company attracted key senior management talent with backgrounds in structured finance, insurance, management, and M&A. On August 8, 2019, EBS received its license to provide physical security officers from the Florida Department of Agriculture and Consumer Services, and commenced its security protection operations in southern Florida, providing security services to the hospitality industry, as well as large events and VIPs/celebrities.

As part of the development of the South African business unit, the Company, through EBRM, entered into a Joint Venture Agreement (the “JV Agreement”) on September 8, 2020, with Prime African Security, Ltd., a South African corporation (“Prime”), to provide security and risk management services in South Africa. The joint venture formed Prime Enigma Africa (Pty) Ltd., a South African corporation (the “Joint Venture”), for which Prime owns 51% of the common stock and the Company owns 49%. The JV Agreement is for an initial term of three (3) years, and automatically renews unless canceled in writing by either party.

COVID-19 Pandemic

In December 2019, an outbreak of the COVID-19 virus was reported in Wuhan, China. On March 11, 2020, the World Health Organization (“WHO”) declared the COVID-19 virus a global pandemic, and on March 13, 2020, former President Donald J. Trump declared the virus a national emergency in the United States. As of the date of the filing of this Quarterly Report, the WHO reports over 757 million confirmed COVID-19 cases and over 6.8 million deaths worldwide, including over 1.1 million in the U.S. This highly contagious disease has spread to most of the countries in the world and throughout the United States, creating a serious impact on customers, workforces and suppliers, disrupting economies and financial markets, and potentially leading to a world-wide economic downturn. It has caused a disruption of the normal operations of many businesses, including the temporary closure or scale-back of business operations and/or the imposition of either quarantine or remote work or meeting requirements for employees, either by government order or on a voluntary basis.

The COVID-19 pandemic may adversely affect the Company’s clients’ operations, its employees and its employee productivity. It may also impact the ability of the Company’s subcontractors, partners, and suppliers to operate and fulfill their contractual obligations, and result in an increase in costs, delays or disruptions in performance. These effects, and the direct effect of the virus and the disruption on the Company’s employees and operations, may negatively impact both the Company’s ability to meet customer demand and its revenue and profit margins. The Company’s employees, in many cases, are working remotely and using various technologies to perform their functions. The Company might experience delays or changes in customer demand, particularly if customer funding priorities change. Further, in reaction to the spread of COVID-19 in the United States, many businesses have instituted social distancing policies, including the closure of offices and worksites and deferring planned business activity. Additionally, the disruption and volatility in the global and domestic capital markets may increase the cost of capital and limit the Company’s ability to access capital. Both the health and economic aspects of the COVID-19 virus are highly fluid and the future course of each is uncertain. For these reasons and other reasons that may come to light if the coronavirus pandemic and associated protective or preventative measures expand, the Company may experience a material adverse effect on its business operations, revenues and financial condition; however, its ultimate impact is highly uncertain and subject to change.

Current Business

The Company is currently structured with ~~three wholly owned~~four wholly-owned subsidiaries: ~~PearTrack Systems Group, Ltd., Ecologic Products,~~Enigma-Bulwark Risk Management, Inc., ~~and Ecologic Car Rentals, Inc.~~a Delaware corporation (“EBRM”), ~~all Nevada corporations.~~and PearTrack Systems Group, Ltd. (“PTSG”), is headquartered in the San Francisco Bay area of California, with offices in Manchester, England. The Company’s current business activities are diversified into two specific markets: remote/mobile asset trackingEcologic Products, Inc. (“EPI”), and ~~environmental transportation and products.~~

On January 21, 2015, the Company entered into an Assignment and Licensed Rights Agreement (“Assignment and License Agreement”) by and between the Company and PearLoxx Ltd. (“PearLoxx”) for the assignment and exclusive license to the Company of certain PearLoxx patented technology (the “Product”) in perpetuity. Pursuant to the terms and conditions of the Assignment and License Agreement, royalties are payable to PearLoxx on Adjusted Gross Revenue (“AGR”) generated by the Product as follows: 5% of AGR up to $5,000,000; 3% of AGR between $5,000,001 and $10,000,000; and 2.5% of AGR thereafter. On March 9, 2015, the Assignment and License Agreement was amended to, among other things, include as part of the consideration for the Product, the right for PearLoxx to purchase 5,706,506 shares of the Company’s common stock at $0.001 per share, valued at $1,711,952.

~~On February 20, 2015, Mr. Philip J. Woolas was appointed as a Board member, to serve until the next annual meeting of the shareholders and/or until his successor is duly appointed.~~

~~Current Business~~

~~The Company is currently structured with three wholly owned subsidiaries: PearTrack Systems Group, Ltd.,~~ Ecologic Car Rentals, Inc. ~~and Ecologic Products, Inc.~~(“ECR”), all Nevada corporations. The Company’s current business activities are diversified into two specific markets: ~~environmental transportation~~security and ~~products, and remote/mobile asset tracking.~~

~~Through its wholly owned subsidiary,~~~~PearTrack Systems Group, Ltd.~~~~, the Company intends to provide a suite of products in the M2M telematics~~risk management, and remote/mobile asset tracking products.

Enigma-Bulwark, Ltd. Los Angeles, California		Parent Corporation Patented EnigmaLok Locking Technology
Enigma-Bulwark Risk Management, Inc. Cape Town, South Africa		Tethered Drone System (Patent-Pending) Network-Based Video Surveillance (Patent-Pending) Security and Risk Management / Intelligence Security Guard Operations Hotels, Events, VIPs
	`·`Enigma-Bulwark Security, Inc. Miami, Florida
	`·`Prime-Enigma Africa Pvt. Joint Venture
Ecologic Products, Inc. / Ecologic Car Rentals, Inc. Los Angeles, California		Environmental Transportation and Products Seeking Strategic Opportunities

Through its wholly-owned subsidiary, EBRM, the Company is operating a security and risk management ~~industry,~~business, and developing its proprietary, patent-pending and patented technology. EBRM is focused on providing security guards, both armed and unarmed, as well as security consulting and systems integration of security technology and software through the development of its patent-pending intellectual property, along with third-party Plug-N-Play products.

In August 2019, the Company, through EBRM’s subsidiary, Enigma-Bulwark Security, Inc. (“EBS”), a Delaware corporation, established and operates a full-service security business targeting hospitality, corporate/executives, and petroleum assets. In Miami, Florida. EBS services include security guards, both armed and unarmed, as well as CCTV and video capture technology and security consulting services. As of October 2022, EBS maintains a staff of approximately forty-five (45) employees, including over forty (40) fully licensed security personnel, serving eleven (11) luxury and boutique hotels, restaurants and resorts in the greater Miami Beach, Florida, area.

In August 2020, EBRM formed a ~~GPS~~joint venture with Prime African Security, Ltd. Pty, a Pretoria, South Africa based full-service security company, accredited under the Private Security Industry Regulation Act 56 of 2001 (PSIRA), called Prime-Enigma Africa Ltd. Pty (“Prime-Enigma”) headquartered in Pretoria, South Africa. Prime-Enigma is currently bidding on security tenders from large international corporations operating in South Africa.

The Company also intends to provide a unique solution to security issues in the intermodal shipping container marketplace, with its patented container tracking and locking system, ~~and tracking devices with a proprietary long-life battery system for non-powered assets.~~

~~Throughits wholly owned subsidiaries~~,~~Ecologic Car Rentals, Inc.~~ ~~and~~~~Ecologic Products, Inc.~~EnigmaLok (formerly PearLoxx), the Company continues its pursuits for viable environmental rental car opportunities, and its marketing and distribution endeavors for its environmental products. The Company anticipates that it will spin-out Ecologic Car Rentals and Ecologic Products, Inc. to its shareholders priorrights of which were licensed to the ~~end of~~Company in perpetuity in 2015.

~~Remote/Mobile Asset Tracking~~

~~PearTrack Systems Group, Ltd.~~

Through ~~its wholly owned subsidiary, PearTrack Systems Group, Ltd.,~~ the Company’s focus is primarily on the development and commercialization of its proprietary battery system in conjunction with its global positioning system (“GPS”) tracking and management technologies. The Company is geared to offer market-leading proprietary solutions in the M2M telematics and remote/mobile asset tracking and management industries.

~~Key components of PearTrack Tracking Products:~~

~~Battery Powered GPS Asset Tracking and Monitoring Systems with up to 10-year batter~~y ~~life for just about any remote asset, regardless of power supply.~~

~~Asset monitoring and alarm units ranging from a Personal Tracking device with a 30 day rechargeable battery, to a Container Security and Tracking Unit with a 10 year battery.~~

~~PT-700 or PT-1000~~: self-contained, wireless, concealable and easily fitted GPS enabled Asset Monitoring and Alert Systems with unique covert antenna kit, providing international GPS tracking (via GSM networks), temperature monitoring and door opening alerts sent directly to cell phone and/or email account.

~~PT Tracking Unit~~: a powerful Fault MonitoringandService Management Tool that monitors Generators, Chillers, Reefers, Irrigation Pumps, and Heavy Plant operating conditions, providing automatic alerts for critical events such as Low Oil Pressure, Engine Over-Temperature, Grid Failure, Low Output Flow, Low Fuel Level, Battery Failure, and Out of Temperature Range.

~~PearTrack TeleAsset~~: a remote Asset Management, GPS Tracking and Monitoring System providing critical real-time event-driven GPS enhanced Event Alerts and Usage information, and enables superior remote asset management through a single web-based portal.

~~PearTrack TeleAsset Platform:~~ ~~provides an end-to-end solution including:~~

~~GPS enabled M2M interface hardware fitted discretely to each asset that monitors alarms, gathers data, and communicates information to the PearTrack web portal using GPRS via the GSM mobile networks.~~

~~Centrally managed asset data software to process alarms and alerts.~~

~~Web portal internet-based user interface accessible using a standard web browser from any Internet enabled PC or handheld device.~~

~~Customization, hosting and system integration to provide tailored solutions to meet specific customer needs.~~

The Company intends to enhance its tracking products, and is assessing the areas of growth, with particular emphasis on the intermodal container market. The Company’s vertically integrated activities, spanning from hardware design, software development, marketing and sales, to project implementation and system operations, aim to make logistics chains more secure and increase operational efficiency.

~~Environmental Transportation and Products~~

~~Ecologic Car Rentals, Inc.~~

Through its wholly owned subsidiary, Ecologic Car Rentals, Inc., the Company continues to focus on the development of an environmental car rental operation. The Company is currently pursuing viable opportunities within the car rental industry to develop and establish its own brand as a premier “green” car rental company offering environmentally-friendly vehicles.

The Company plans to acquire existing profitable independent car rental operations on a multi-regional basis and convert their operations to an Ecologic platform. The Company has identified certain independent car rental operations that would provide a multi-regional presence, and that can be used as a platform to become the only large “green” independent car rental operation in the U.S.

The Company believes that the growth in demand for environmentally friendly cars, and the increase in major automakers’ production of new eco-friendly car models, has created a unique opportunity for an environmentally-friendly transportation company. The strategy is to identify and acquire existing profitable independent car rental operations on a multi-regional basis, and convert their operations to an Ecologic platform. By initially co-branding with acquired companies for a limited period of time, the rebranding transition to “green” outlets as “Ecologic Car Rentals” can ultimately be completed. The comprehensive business strategy capitalizes on this unique opportunity, and the business model supports growth, while holding true to its planet-friendly mission.

~~Ecologic Products, Inc.~~

Through its wholly owned subsidiary, Ecologic Products, Inc., the Company continues its development of ecologically friendly products. Initially, the Company’s product line will be focused on transportation and its ancillary markets. The Company has developed Ecologic Shine^®~~, a device and system for near-waterless car washing that delivers cleaning comparable to normal washing without the use of any harmful chemicals. The Ecologic Shine~~^® ~~products and services are:~~


·	~~Good for the environment~~
·	~~Good for the vehicle~~
·	~~Good for the customer~~
·	~~Good for the bottom line~~

~~The Company continues to pursue wholesale distribution opportunities for the Ecologic Shine~~^®~~product, including the product placement into major retail automotive chains. The Company is also developing a business plan for the retail distribution of the Ecologic Shine~~^® ~~product line in anticipation of spinning the operating subsidiary out to Shareholders.~~

Ecologic Products, Inc. has had some success in its 3-year waterless car wash trial, undertaken in conjunction with Park ’N Fly in Atlanta, GA, and Los Angeles, CA, at Hartsfield International Airport and LAX International Airport, respectively.

On February 27, 2014, the Company negotiated the sale of approximately 440 gallons of its Eco Shine, Eco Wash and Eco Prep products, representing approximately 2,640 car washes, to CISA Lubes NC, LLC, a North Carolina operator of 33 quick auto lube operations in North Carolina.

Ecologic Products, Inc. has expanded its business objectives beyond the scope of sustainable water practices through its Eco Shine operations to sustainable products that target corporate and government markets and has pursued several technologies at various stages of development.

On June 12, 2014, the Company entered into a non-disclosure Agreement with SEaB Energy, Ltd., a Southampton, United Kingdom Waste-to-Energy Company. SEaB Energy develops Waste-to-Energy systems deploying a containerized advanced digestion (AD) process. The process will, by stabilizing organic wastes, generate biogas (that will be combusted within CHP engines to generate electricity) and a digestate that will be employed as an organic fertilizer. In June 2014, the Company’s Chairman and SEaB’s CEO met in London to discuss ways in which the Company could develop a business for SEaB’s two primary products, the Muckbuster^® ~~and the Flexibuster~~^©~~, in the United States. The Company worked to develop a plan to install the Muckbuster~~^® product at Kennesaw State University, located in the greater Atlanta, Georgia, area. After review, discussion and due diligence it was decided that the quantity of bio waste that could be utilized by the Muckbuster^® system was not large enough in daily volume to make the economics work. The Company will continue to seek to identify opportunities for the SEaB product line, and will review its efforts at the end of the 2nd quarter 2015.

On June 15, 2014, the Company entered into a non-disclosure agreement with SheerWind, Inc., a Minnesota based innovative wind turbine company. The discussions with SheerWind were preliminary and did not move past the exchange of private information.

On June 26, 2014, the Company entered into a non-disclosure agreement with AquaFuel, Ltd., a Kent, United Kingdom based fuel technology company that has developed the first diesel generator to run on glycerin. Management negotiated, drafted and presented a Memorandum of Understanding to acquire an exclusive license for the United States. The Company’s Chairman visited the AquaFuel headquarters for the purpose of demonstration of the AquaFuel generators and related due diligence. The Company’s due diligence indicated that the current development of glycerin as a fuel was unlikely to be attractive to the marketplace. The Company is researching alternative bio fuel products that could work with the AquaFuel generators.

~~Planned Spin Offs~~

~~Although the Company continues to develop its environmental transportation business through~~subsidiaries, Ecologic Car Rentals, Inc. and Ecologic Products, Inc., the Company continues its pursuits for strategic opportunities for its shareholders, as management believes that the brands have value for companies with environmentally-friendly consumer-related products and ~~its board of directors feel~~services.

Management

Management experience and insight translates into best practices and proven strategies that will help anticipate and respond to myriad facility, operational, and safety challenges with confidence. Enigma’s management has extensive knowledge and experience in many fields requiring security and risk management protocols, such as multinational corporations, mining houses, telecommunication providers, transportation and energy companies.

Enigma’s team is at the subsidiaries will be able to operate more effectively independently, with the goal of attracting new capital and exploiting their existing business, and will have the flexibility to establish new relationships in order to achieve their respective goals of generating shareholder value.

~~As such, the Company intends to effect spin-offs~~core of its ~~wholly owned subsidiaries, Ecologic Car Rentals, Inc.~~value, with decades of intelligence and ~~Ecologic Products, Inc.~~ military experience, as well as technology expertise and specialized experience in:

·advanced training techniques

·new and innovative technology applications

·intelligence and reconnaissance

·risk assessment and threat identification.

The ~~terms~~Enigma team includes individuals with backgrounds from U.S. and South African Special Forces and military intelligence, and applies its experience to deliver measured and effective security management, regardless of ~~the spin-offs include the distribution of a stock dividend of 57,065,061 shares of Ecologic Car Rentals, Inc. common stock,~~adversary or operating environment. Additionally, Enigma is sensitive and 57,065,061 shares of Ecologic Products, Inc. common stock, to the Company’s shareholders of record (excluding the former shareholders of PTSG) on the Record Date of December 15, 2014, on a pro rata basis. Subsequent to the spin-offs, Ecologic Car Rentals, Inc. and Ecologic Products, Inc. will operate as entities independent of the Company, under the leadership of Mr. William B. Nesbitt, who will serve as President and CEO of the companies.experienced at managing low-profile, security operations in challenging environments.

The Company ~~believes~~works with a core management team to remain flexible during times of non-engagement. With over forty years of professional military service, the Enigma team has established a large network of security professionals that ~~as independent companies, Ecologic Products, Inc.~~can be deployed on a global basis. The Company will continue to identify diverse and ~~Ecologic Car Rentals, Inc. can promote~~skilled security personnel, and ~~brand themselves so as to operate successfully. Mr. William B. Nesbitt will remain as President and CEO~~develop innovative solutions across the full spectrum of ~~both companies.~~security needs.

~~Results of Operations~~

~~Three and nine months ended September 30, 2015, compared to three and nine months ended September 30, 2014.~~

The following summary of the Company’s financial condition and results of operations should be read in conjunction with the Company’s unaudited consolidated financial statements for the ~~quarter~~nine months ending September 30, 2018, which are included herein. The financial information of Enigma-Bulwark, Ltd., and its wholly-owned subsidiaries as of September 30, 2018, PearTrack Systems Group, Ltd., Ecologic Car Rentals, Inc. and Ecologic Products, Inc. is provided below on a consolidated basis, unless otherwise indicated. All significant intercompany accounts and transactions have been eliminated.

Balance Sheet

As of September 30, 2018, the Company had total assets of $9,041 compared with total assets of $11,807 at December 31, 2017. The decrease in total assets of $2,766 is attributable to a decrease in investment in securities of $2,412 and depreciation of $354.

As of September 30, 2018, the Company had total liabilities of $8,098,709 compared with total liabilities of $7,429,739 at December 31, 2017. The increase in total liabilities of $668,970 is attributable to an increase in accounts payable and accrued expenses of $191,414, an increase in related party payables of $53,179, and an increase in related party convertible notes payable, net of unamortized discount, of $424,377.

Results of Operations

Three and nine months ended September 30, ~~2015, which are included herein.~~2018, compared to three and nine months ended September 30, 2017.


	For the three months ended						For the nine months ended						For the three months ended						For the nine months ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014			September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017
Revenue	$	1,481		$	119,438		$	7,755		$	146,789		$	––		$	––		$	––		$	649

Cost of sales	$	1,750		$	1,600		$	7,617		$	9,154		$	––		$	687		$	––		$	2,553

Gross profit (loss)	$	(269	)	$	117,838		$	138		$	137,635		$	––		$	(687	)	$	––		$	(1,904	)

General and administrative expenses	$	480,608		$	408,830		$	1,438,947		$	1,209,150		$	147,289		$	144,537		$	451,754		$	457,578

Interest income	$	––		$	––		$	––		$	2

Refunds and claims	$	––		$	2,708		$	––		$	71,149
Operating loss													$	(147,289	)	$	(145,224	)	$	(451,754	)	$	(459,482	)

Interest expense	$	(62,367	)	$	(63,401	)	$	(171,723	)	$	(192,213	)	$	(53,080	)	$	(47,160	)	$	(152,869	)	$	(136,102	)

Discount amortization													$	(21,804	)	$	(21,804	)	$	(64,701	)	$	(64,701	)

Realized gain on currency translation	$	314		$	––		$	748		$	––		$	––		$	184		$	––		$	680

Loss on disposal of asset	$	––		$	––		$	––		$	(1,925	)

Net loss	$	(542,930	)	$	(351,685	)	$	(1,609,784	)	$	(1,194,502	)	$	(222,173	)	$	(214,004	)	$	(669,324	)	$	(659,605	)

Net comprehensive income (loss)	$	641		$	(3,626	)	$	(15,550	)	$	(88,058	)	$	––		$	26,116		$	(2,412	)	$	(91,692	)

Net loss and comprehensive income (loss)	$	(542,289	)	$	(355,311	)	$	(1,625,334	)	$	(1,282,560	)	$	(222,173	)	$	(187,888	)	$	(671,736	)	$	(751,297	)

Revenue

For the three ~~month period~~months ended September 30, ~~2015,~~2018 and 2017, no revenue was generated.

For the nine months ended September 30, 2018, no revenue was generated.

For the nine months ended September 30, 2017, revenue in the amount of ~~$1,481~~$649 consisted of limited ~~continuing customer~~sales resulting from test marketing of PearTrack tracking ~~revenue for~~products.

At September 30, 2018, the ~~PearTrack product line.~~Company had not yet begun full operations, generating limited test market sales.

Cost of sales

For the three ~~month period~~months ended September 30, ~~2014, revenue in the amount~~2018, no cost of ~~$119,438 consisted of continuing customer tracking revenue for the PearTrack product line.~~sales was incurred.

~~For the nine month period ended September 30, 2015, revenue in the amount of $7,755 consisted of limited continuing customer tracking revenue for the PearTrack product line.~~

For the nine month period ended September 30, 2014, revenue in the amount of $146,789 consisted of limited sales of car washing products to third-party retailers in the amount o $5,375 and continuing customer tracking revenue for the PearTrack product line in the amount of $141,414.

~~Cost of sales~~

For the three ~~month period~~months ended September 30, ~~2015,~~2017, cost of sales in the amount of ~~$1,750~~$687 consisted of limited product and system costs related to the PearTrack product line.

For the ~~three month period~~nine months ended September 30, ~~2014,~~2018, no cost of sales was incurred.

For the nine months ended September 30, 2017, cost of sales in the amount of ~~$1,600~~$2,553 consisted of limited product and system costs related to the PearTrack product line.

~~For the nine month period ended~~At September 30, ~~2015, cost of sales in~~2018, the ~~amount of $7,617 consisted of~~Company had not yet begun full operations, generating limited ~~product and system costs related to the PearTrack product line.~~test market sales.

For the nine month period ended September 30, 2014, cost of sales in the amount of $9,154 consisted of limited purchases of car washing products from wholesale manufacturer andlimited product and system costs related to the PearTrack product line.

General and Administrative Expenses

Three months ended

Nine months ended

variances


September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014

3-month

9-month

Amortization of stock options granted
$
––

$
15,000

$
––

$
45,000

$
(15,000
)
$
(45,000
)
Amortization of deferred stock compensation

145,248

31,250


502,147

93,750

113,998

408,397

Depreciation and amortization

70,447

19,339

186,631

86,105

51,108

100,526

Legal, accounting and professional fees

53,118

40,216

119,247

79,395

12,902

39,852

Management consulting services

153,249

226,252


459,747

678,751

(73,003
)

(219,004
)
Other consulting fees

3,277

15,000

12,737

45,000

(11,723
)

(32,263
)
Office supplies and miscellaneous expenses

36,498

37,850


102,175

123,626

(1,352
)

(21,451
)
Rent expense

18,771

23,923

56,263

57,523

(5,152
)

(1,260
)
Total general and administrative expenses
$
480,608

$
408,830

$
1,438,947

$
1,209,150

$
71,778

$
229,797

	For the three months ended				For the nine months ended					Variances
	September 30, 2018		September 30, 2017		September 30, 2018			September 30, 2017		3-month			9-month
Legal and accounting fees	$	4,000	$	4,000	$	12,000		$	12,000	$	––		$	––
Management fees		143,009		139,423		439,855			436,983		3,586			2,872
Depreciation		118		118		354			354		––			––
Rent expense		––		––		––			1,400		––			(1,400	)
Office supplies and miscellaneous expenses		162		996		(455	)		6,841		(834	)		(7,296	)
Total general and administrative expenses	$	147,289	$	144,537	$	451,754		$	457,578	$	2,752		$	(5,824	)

General and administrative expenses in the amount of ~~$480,608~~$147,289 for the three months ended September 30, ~~2015,~~2018, were comprised of ~~$145,248 of amortization of stock compensation, $70,447 of depreciation and amortization, $53,118~~$4,000 of legal and accounting fees, ~~$156,526~~$143,009 of management fees, $118 of depreciation, and ~~other consulting fees, $36,498~~$162 of office overhead and other general and administrative ~~expenses, and $18,771 of rent expense.~~expenses.

General and administrative expenses in the amount of ~~$408,830~~$144,537 for the three months ended September 30, ~~2014,~~2017, were comprised of ~~$46,250 of amortization of stock compensation, $19,339 of depreciation and amortization, $40,216~~$4,000 of legal and accounting fees, ~~$241,252~~$139,423 of management fees, $118 of depreciation, and ~~other consulting fees, $37,850~~$996 of office overhead and other general and administrative ~~expenses, and $23,953 of rent expense.~~expenses.

General and administrative expenses of $147,289 for the three ~~month period~~months ended September 30, ~~2015, of $480,608~~2018, as compared to ~~$408,830~~$144,537 for the three ~~month period~~months ended September 30, ~~2014,~~2017, resulted in an increase in general and administrative expenses for the current period of ~~$71,778.~~

~~Significant changes~~$2,752. The increase in general and administrative expenses ~~for the three month period ended September 30, 2015, compared to the three month period ended September 30, 2014, were~~of $2,752 was attributable to the following items:

·

~~a decrease in amortization of stock options of $15,000, due to certain deferred stock option compensation fully expensed in the prior period, resulting in no expense in the current period;~~

an increase in ~~amortization~~management fees of ~~deferred stock compensation of $113,998,~~$3,586, due to ~~certain stock grants~~pro-rated expenses; and ~~awards in 2014, resulting in an increase in deferred stock compensation, of which $145,248 was expensed in the current period, compared to $31,250 for the same period in the prior year;~~

·

an increase in depreciation and amortization expense of $51,108, primarily due to the acquisition of certain intellectual property, resulting in amortization expense in the current period of $70,329, compared to $19,187 for the same period in the prior year; and a decrease in depreciation expense of $34;

an increase in legal, accounting and professional fees of $12,902, primarily due to an increase in miscellaneous legal services of $22,108; a decrease in audit fees of $9,750; a discount of $1,660 provided for previously expensed accounting fees; an increase in internal accountant fees of $3,000; and a decrease in miscellaneous accounting fees of $420

a decrease in management consulting fees of $73,003, primarily due to a change in officers, resulting in a decrease of $62,503; termination of a in certain consulting agreement, resulting in a decrease of $45,000; and an increase of $34,500 due to a new consulting agreement resulting in compensation expense of $49,500, compared to $15,000 in the prior period;

a decrease in other consulting fees of $11,723, primarily due to a change in staff, resulting in a decrease of $15,000; an increase of $3,750 resulting from a new consulting agreement entered into in the current year, compared to no such expense in the prior year; and decrease of $473 resulting from a reduction in miscellaneous fees;

a decrease in other general and administrative expenses of ~~$1,352,~~$834, due to ~~an increase~~a decrease in ~~computer and internet expense of $1,301, firmware research and development costs of $5,187, travel of $8,360; and reduction in telephone of $3,008, and other~~ office supplies and miscellaneous expenses of ~~$13,192; and~~$834.

~~a decrease in rent expense of $5,152 due to a reduction in leased office space.~~

General and administrative expenses in the amount of ~~$1,438,947~~$451,754 for the nine months ended September 30, ~~2015,~~2018, were comprised of ~~$502,147 of amortization of stock compensation, $186,631 of depreciation and amortization, $119,247~~$12,000 of legal and accounting fees, ~~$472,484~~$439,855 of management fees, $354 of depreciation, and ~~other consulting fees, $102,175~~($455) of office overhead and other general and administrative ~~expenses, and $56,263 of rent expense.~~expenses.

General and administrative expenses in the amount of ~~$1,209,150~~$457,578 for the nine months ended September 30, ~~2014,~~2017, were comprised of ~~$138,750 of amortization of stock compensation, $86,105 of depreciation and amortization, $79,395~~$12,000 of legal and accounting fees, ~~$723,751~~$436,983 of management fees, $354 of depreciation, $1,400 of rent expense, and ~~other consulting fees, $123,626~~$6,841 of office overhead and other general and administrative ~~expenses, and $57,523 of rent expense.~~expenses.

General and administrative expenses of $451,754 for the nine ~~month period~~months ended September 30, ~~2015, of $1,438,947~~2018, as compared to ~~$1,209,150~~$457,578 for the nine ~~month period~~months ended September 30, ~~2014,~~2017, resulted in ~~an increase~~a decrease in general and administrative expenses for the current period of ~~$229,797.~~

~~Significant changes~~$5,824. The decrease in general and administrative expenses ~~for the nine month period ended September 30, 2015, compared to the nine month period ended September 30, 2014, were~~of $5,824 was attributable to the following items:

·

~~a decrease in amortization of stock options of $45,000, due to certain deferred stock option compensation fully expensed in the prior period, resulting in no expense in the current period;~~

an increase in amortization of deferred stock compensation of $408,397, due to certain stock grants and awards in 2014, resulting in an increase in deferred stock compensation, of which $502,147 was expensed in the current period, compared to $93,750 for the same period in the prior year;

an increase in depreciation and amortization expense of $100,526, primarily due to the acquisition of certain intellectual property, resulting in amortization expense in the current period of $186,513, compared to $85,853 for the same period in the prior year; and a decrease in depreciation expense of $134 resulting from fully depreciated assets;

an increase in legal, accounting and professional fees of $39,852, primarily due to an increase in miscellaneous legal services of $22,248; a decrease in audit fees of $8,273; a reduction in other accounting fees of $12,702 due to a change in accountants; and an increase in internal accountant fees of $39,000;

a decrease in management ~~consulting~~ fees of ~~$219,004, primarily~~$2,872, due ~~to a change in officers, resulting in a decrease of $187,504; termination of a in certain consulting agreement, resulting in a decrease of $135,000;~~pro-rated expenses; and ~~an increase of $103,500 due to a new consulting agreement resulting in compensation expense of $148,500, compared to $45,000 in the prior period;~~

·

a decrease in ~~other consulting fees~~rent expense of ~~$32,263, primarily~~$1,400, due to a change in staff, resulting in a decrease of $45,000; an increase of $11,250 resulting from new consulting agreements entered into in the current period, compared to no such expense in the prior period;lease expiration; and ~~an increase in miscellaneous fees of $1,487, compared to no such expense in the prior period.~~

·

a decrease in other general and administrative expenses of ~~$21,451,~~$7,296, due to ~~an increase~~decreases in ~~OTC market fees~~bank charges of $10,000, and miscellaneous professional fees of $3,600; and a decrease in computer and internet expense of $1,531, firmware research and development costs of $11,813, travel of $9,441, telephone of $7,020$3,338, and other general office ~~supplies~~ and miscellaneous expenses of ~~$5,246; and~~$3,958.

~~a decrease in rent expense of $1,260 due to a reduction in leased office space.~~

General and administrative expenses for the ~~three and~~ nine ~~month period~~months ended September 30, ~~2015,~~2018 and 2017, were incurred primarily for the purpose of advancing the Company closer to its financing and operating goals.

Net Loss

During the nine months ended September 30, ~~2015,~~2018, the Company incurred a net loss of ~~$1,609,784,~~$669,324, compared with a net loss of ~~$1,194,502~~$659,605 for the nine months ended September 30, ~~2014.~~2017. The increase in net loss of ~~$415,282~~$9,719 is attributable to a decrease in revenue of ~~$139,034,~~$649, a decrease in cost of goods sold of ~~$1,537, an increase~~$2,553, a decrease in general and administrative expenses of ~~$229,797, a decrease in interest income of $2, a decrease in refunds and claims of $71,149, a decrease~~$5,824, an increase in interest expense of ~~$20,490, an increase~~$16,767, and a decrease in realized gains on foreign currency changes of ~~$748,~~$680.

During the nine months ended September 30, 2018, the Company incurred a net comprehensive loss of $2,412, compared with a net comprehensive loss of $91,692 for the nine months ended September 30, 2017. The decrease in net comprehensive loss of $89,280 is attributable to a decrease in unrealized loss on currency translation of $1,228, and a decrease in ~~losses from the disposal~~unrealized loss on securities of ~~assets of $1,925.~~$88,052.

Liquidity and Capital Resources


Working capital
Working Capital Deficit
	September 30, 2015			December 31, 2014			Increase (decrease)			September 30, 2018				December 31, 2017			Increase (decrease)
Current assets	$	85,359		$	81,361		$	3,988		$	––		$		––		$	––
Current liabilities		3,555,536			3,388,652			166,884			3,691,757				3,447,164			244,593
Working capital (deficit)	$	(3,470,177	)	$	(3,307,291	)	$	(162,886	)	$	(3,691,757	)	$		(3,447,164	)	$	244,593

As of September 30, ~~2015,~~2018, and December 31, ~~2014, respectively,~~2017, the Company had ~~$74,621 and $64,753 in~~no cash.

The Company had a working capital deficit of ~~$3,470,177~~$3,691,757 as of September 30, ~~2015,~~2018, compared to a working capital deficit of ~~$3,307,291~~$3,447,164 at December 31, ~~2014.~~2017. The ~~decrease~~increase in working capital deficit of ~~$162,886~~$244,593 is primarily attributable to ~~an increase in cash of $9,868, an increase in accounts receivable of $4,683, a decrease in refunds and claims receivable of $10,945, an increase decrease in prepaid insurance of $392,~~ an increase in accounts payable and accrued expenses of ~~$95,752,~~$191,414, and an increase in related party payable of ~~$90,301, and a decrease in other short term notes payable of $19,169.~~$53,179.

Cash Flows
For the nine months ended


September 30, 2015

September 30, 2014

Net cash used in operating activities
$
(389,676
)
$
427,922

Net cash used in investing activities

(1,688
)

(450,755
)
Net cash provided by financing activities

401,101


(39,166
)
Effects of exchange rate changes

131

(7
)
Net increase (decrease) in cash
$
9,868

$
(62,006
)

Cash Flows	For the nine months ended
	September 30, 2018		September 30, 2017		Increase (decrease)
Net cash used by operating activities	$	––	$	1,021	$	(1,021	)
Net cash used by investing activities		––		––		––
Net cash used by financing activities		––		––		––
Net decrease in cash	$	––	$	1,021	$	(1,021	)

Cash Flows from Operating Activities

During the nine months ended September 30, ~~2015,~~2018, the Company ~~used $389,676 of~~was provided with no cash flow from operating activities, compared ~~with $427,922 provided by operating activities~~to $1,021 for the nine months ended September 30, ~~2014.~~2017. The ~~increase~~decrease in cash ~~used in~~provided by operating activities of ~~$817,598~~$1,021 is primarily attributable to an increase in the net loss from operations of ~~$415,282,~~$9,719; an increase ~~in stock compensation/stock option amortization of $363,397, a decrease~~ in accruals converted to related party loans of ~~$80,253,~~$48,426; a decrease in foreign exchange gains of $680; an increase in ~~depreciation and amortization of $100,526, an increase in discount amortization of 3,458, a decrease in losses from~~ the ~~disposal of assets of $1,925, an increase in accounts receivable of $4,683, an increase in refunds and claims receivable of $3,229, a decrease in prepaid expenses of $592, a decrease~~changes in accounts payable and accrued expenses of ~~$11,741,~~$50,562; and ~~a decrease~~decreases in the changes in accounts receivable of $887, other receivables of $5,985, prepaid expenses of $806, other assets of $700, and related party payables of ~~$430,958.~~$82,592.

Cash Flows from Investing Activities

During the nine months ended September 30, ~~2015,~~2018 and 2017, the ~~company~~Company used ~~$1,688 of~~no cash flows from investing activities, compared to $450,755 used in investing activities for the nine months ended September 30, 2014. The increase in cash used for investing activities is primarily attributable to $674 in cash received from a subsidiary; and an increase of $1,607 to purchase office equipment, and a decrease of $450,000 resulting from the purchase of intellectual property in the prior period, compared to no such expense in the current period.activities.

Cash Flows from Financing Activities

During the nine months ended September 30, ~~2015,~~2018 and 2017, the Company ~~was provided with $401,101 of~~used no cash flows from financing ~~activities, compared to $39,166 used in financing activities during the nine months ended~~activities.

As of September 30, 2014. The increase in cash flows provided by financing activities of $440,267 is attributable to a decrease in the repayment of related party loans of $20,003, an increase in subscriptions received of $1,745, and an increase in proceeds from the issuance of common stock of $418,519.

~~As at September 30, 2015,~~2018, affiliates and related parties are due a total of ~~$3,602,737,~~$5,819,813, which is comprised of ~~loans~~promissory notes to related parties, net of unamortized discounts of $16,768, in the amount of $5,095,937; accrued compensation in the amount of $571,170; and reimbursable expenses/cash advances to the Company in the amount of ~~$3,214,855, accrued compensation~~$152,706; for a net increase of ~~$341,550, and reimbursed expenses of $46,332.~~$666,311. During the nine months ended September 30, ~~2015, loans~~2018, promissory notes to ~~the Company~~related parties, net of unamortized discounts, increased by ~~$318,656, unpaid~~$613,132, and accrued compensation increased by ~~$223,050 and reimbursable expenses decreased by $132.749.~~$53,179. All outstanding promissory notes to related ~~party notes payable~~parties bear interest at ~~the~~a rate of 5%5 to 7%7 percent per annum, are due and payable within between one (1) year of written demand and by December ~~9, 2018,~~31, 2023, or upon certain equity funding, and are convertible into the Company’s common stock at a price of between $0.05 and ~~$0.40~~$0.25 per share.

The Company’s principal sources of funds have been from sales of the Company’s common stock and loans from related parties.

Contractual Obligations

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

Going Concern

The Company has incurred losses since inception resulting in a current period net loss of $671,736, an accumulated deficit of ~~$13,305,512,~~$19,181,224, and a working capital deficit of ~~$3,470,177,~~$3,691,757, and further losses are anticipated. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, which may not be available at commercially reasonable terms. There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations and the Company may cease operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The unaudited consolidated financial statements included with this quarterly report have been prepared on the going concern basis which assumes that adequate sources of financing will be obtained as required and that the Company’s assets will be realized, and liabilities settled in the ordinary course of business. Accordingly, the unaudited consolidated financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

The discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s audited consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. The Company believes that understanding the basis and nature of the estimates and assumptions involved with the following aspects of the Company’s consolidated financial statements is critical to an understanding of ~~the Company’s~~its consolidated financial statements.

~~Net Income (Loss) Per Common Share~~

The Company computes earnings per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Net earnings (loss) per common share is computed by dividing netincome (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible preferred shares and the exercise of the Company’s stock options and warrants.

~~Use of Estimates~~

~~The preparation of financial statements~~following should be read in ~~conformity~~conjunction with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. Estimates that are criticalNote 2 to the ~~accompanying~~Company’s consolidated financial statements, ~~include the, estimates related to asset impairments~~“Summary of long lived assets and investments, classification of expenditures as either an asset or an expense, valuation of deferred tax assets, and the likelihood of loss contingencies. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates and assumptions are revised periodically and the effects of revisions are reflected in the financial statements in the period it is determined to be necessary. Actual results could differ from these estimates.

~~Revenue Recognition~~

Revenue is recognized when all applicable recognition criteria have been met, which generally include (a) persuasive evidence of an existing arrangement; (b) fixed or determinable price; (c) delivery has occurred or service has been rendered; and (d) collectability of the sales price is reasonably assured.

~~The Company’s revenue stream has been from Ecologic Shine~~^®, the initial product marketed through the Company’s subsidiary Ecologic Products, Inc. The Company has made limited sales to certain retail automobile maintenance chains for the purpose of product testing.

~~Stock Based Compensation~~

~~The Company records stock-based compensation in accordance with ASC 718,~~ ~~Share-Based Payments~~, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

~~Recent~~Significant Accounting ~~Pronouncements~~

~~Adopted~~Policies”:

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This guidance is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012. The adoption of this update did not have a material impact on its consolidated financial statements.Impairment reviews

In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. The adoption of this update did not have a material impact on its consolidated financial statements.

In July 2013, the FASB issued ASU No 2013-11, Presentation of an Unrecognized Tax Benefit When Net Operating Loss Carryforward Exists. The objective of ASU 2013-11 is to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits, and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and interim reporting periods therein. Early adoption is permitted. The adoption of this update did not have a material impact on its consolidated financial statements.

In June 2014, the FASB issued ASU No, 2014-10, Elimination of Certain Financial Reporting Requirements for Development Stage Entities. The objective of ASU 2014-10 is to reduce the cost and complexity associated with the incremental reporting requirements for development stage entities. This Update removes all incremental financial reporting requirements, and eliminates an exception provided to development stage entities in Topic 810. The amendments in this standard are effective retrospectively for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted.

~~Not Yet Adopted~~:

In April 2014, the FASB issued ASU No. 2014-08 Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity. The objective of ASU No. 2014-08 is to clarify~~the criteria for determining which disposals can be presented as discontinued operations and also modifies related disclosure requirements. The standard~~Management is required to ~~be adopted by public business entities in annual periods beginning on~~perform tests annually, or ~~after December 15, 2014,~~more often if necessary, for impairment of its finite lived and interim periods within those annual periods. Early adoption is permitted for new disposals beginning in the first quarter of 2014, provided financial statements have not been issued before the release of this standard. ~~The Company is evaluating the effect,~~indefinite lived assets, to determine if ~~any, adoption of ASU No. 2014-08 will have on its consolidated financial statements.~~

In August 2014, the FASB issued ASU No 2014-15 Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The objective of ASU 2014-15 is to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is evaluating the effect, if any, adoption of ASU No. 2014-15 will have on its consolidated financial statements.

In November 2014, the FASB issued ASU No. 2014-17 Business Combinations (Topic 805): Pushdown Accounting. The objective of ASU 2014-17 is to provide guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or ~~to its most recent change-in-control event. However, if the financial statements for the period~~changes in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The Company is evaluating the effect, if any, adoption of ASU No. 2014-17 will have on its consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01 Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This Update eliminates from GAAP the concept of extraordinary items. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted providedcircumstances indicate that the guidance is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities. The Company is evaluating the effect, if any, adoption of ASU No. 2015-01 will have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30: Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 is part of the Simplification Initiative, and its objective of to simplify the presentation of debt issuance costs. This Update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of ~~that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are~~an asset may not ~~affected~~be recoverable.

Impairment testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be supported by the ~~amendments~~net present value of future cash flows derived from such assets using cash flow projections which have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made in ~~this Update. The amendments~~respect of highly uncertain matters, including management’s expectations of:

·growth in ~~this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015,~~EBITDA, calculated as adjusted operating profit before depreciation and ~~interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued.~~ amortization;

·long term growth rates; and

·the selection of discount rates to reflect the risks involved.

The Company ~~is evaluating~~prepares five-year projections and uses these as the ~~effect, if any, adoption of ASU No. 2015-03 will have on~~basis for its ~~consolidated financial statements.~~

~~Other recent accounting pronouncements issued by~~impairment reviews. Changing the ~~FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed~~assumptions selected by management, in particular the discount rate and growth rate assumptions used in the projections, could significantly affect the Company’s impairment evaluation and, hence, results.

The Company’s review for impairment also includes the evaluation of key assumptions related to ~~have a material impact on~~sensitivity in the ~~Company's present or future financial statements.~~projections. Included are estimates for varying levels of growth, including aggressive, median, and conservative. In the Company’s evaluation, the conservative level of growth is utilized. For additional information, see Impairment of Long-Lived Assets under Note 2, Summary of Significant Accounting Policies, in the Notes to the Consolidated Financial Statements contained within this Quarterly Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed under theSecurities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s president, chief executive officer and chief financial officer to allow for timely decisions regarding required disclosure. In designing and evaluating the Company’s disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company’s management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of September 30, ~~2015,~~2018, the end of the Company’s period covered by this quarterly report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s president, chief executive officer and chief financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, the Company’s president, chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting that occurred during the ~~three month period~~nine months ended September 30, ~~2015,~~2018, that have materially or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company knows of no material existing or pending legal proceedings against ~~us,~~it, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to the Company.

ITEM 1A. RISK FACTORS

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

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

~~None.~~There were no unregistered securities issued by the Registrant during the current period, including sales of reacquired securities, as well as new issues, securities issued in exchange for property, services, or other securities, and new securities resulting from the modification of outstanding securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY STANDARDS

Not Applicable

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS


Exhibit Number	Description	Filing Reference
(2)	Plan of Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession
2.1	~~Letter of Intent between the Company and ACE Rent A Car, Inc. dated August 2, 2012~~	~~Filed with the SEC on November 19, 2012 as part of the Company’s Quarterly Report on Form 10-Q~~
~~2.2~~	~~Letter of Intent between the Company and PearTrack Systems Group, Ltd. dated September 26, 2014~~	~~Filed with the SEC on October 2, 2014 as part of the Company’s Current Report on Form 8-K~~
~~2.3~~	Agreement and Plan of Merger between the Company, PearTrack Systems Group Limited and PearTrack Acquisition Corp. effective October 17, 2014	Filed with the SEC on October 23, 2014, as part of the Company’s Current Report on Form 8-K
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation	Filed with the SEC on November 30, 2006, as part of the Company’s registration statement on form SB-2
3.2	Bylaws	Filed with the SEC on November 30, 2006, as part of the Company’s registration statement on form SB-2
3.3	Certificate of Change filed with the Secretary of State of Nevada on April 2, 2008	Filed with the SEC on April 21, 2008, as part of the Company’s Current Report on Form 8-K
3.4	Articles of Merger	Filed with the SEC on June 26, 2008, as part of the Company’s Current Report on Form 8-K
3.5	Certificate of Change filed with the Secretary of State of Nevada on August 29, 2008, with respect to ~~the~~ reverse stock split	Filed with the SEC on September 17, 2008, as part of the Company’s Current Report on Form 8-K
3.6	Articles of Merger	Filed with the SEC on June 11, 2009, as part of the Company’s Current Report on Form 8-K
3.7	Certificate of Change filed with the Secretary of State of Nevada on May 15, 2009, with respect to ~~the~~ reverse stock split	Filed with the SEC on June 11, 2009, as part of the Company’s Current Report on Form 8-K
3.8	Articles of Merger filed with the Secretary of State of Nevada on June 2, 2009, with respect to the merger between ~~the Company’s wholly owned subsidiary,~~ Ecological Acquisition Corp. and Ecologic Sciences, Inc.	Filed with the SEC on July 9, 2009, as part of the Company’s Current Report on Form 8-K
3.9	Certificate of Change filed with the Secretary of State of Nevada on May 15, 2009, effective June 9, 2009 with respect to the merger between the Company’s wholly owned subsidiary, Ecological Acquisition Corp., and Ecologic Sciences, Inc.	~~Filed with the SEC on July 9, 2009 as part of the Company’s Current Report on Form 8-K~~
~~3.10~~	Certificate of Amendment filed with the Secretary of State of Nevada on September 29, 2014, effective October 17, 2014 ~~with respect to the authorized shares and name change~~	Filed with the SEC on October 2, 2014, as part of the Company’s Current Report on Form 8-K
~~(10)~~3.10	~~Material Contracts~~Certificate of Amendment filed with the Secretary of State of Nevada on October 8, 2019, effective October 9, 2019
~~10.1~~	~~Agreement and Plan of Merger dated April 26, 2009~~	Filed with the SEC on ~~April 30, 2009~~October 9, 2019, as part of the Company’s Current Report on Form 8-K
~~10.2~~3.11	~~Employment agreement dated January 30, 2009 between~~Amended and restated Articles of Incorporation filed with the ~~Company and Mr. Plamondon~~Secretary of State of Nevada on October 8, 2019	Filed with the SEC on ~~July 9, 2009 as part of the Company’s Current Report on Form 8-K~~
~~10.3~~	~~Agreement dated April 28, 2009 between the Company and Audio Eye, Inc.~~	~~Filed with the SEC on July 9, 2009as part of the Company’s Current Report on Form 8-K~~
~~10.4~~	~~Agreement dated May 15, 2009 between the Company and Audio Eye, Inc.~~	~~Filed with the SEC on July 9, 2009 as part of the Company’s Current Report on Form 8-K~~
~~10.5~~	~~Employment agreement dated~~ June ~~29, 2009 between the Company and Mr. Keppler.~~	~~Filed with the SEC on July 9, 2009 as part of the Company’s Current Report on Form 8-K~~
~~10.6~~	~~Memorandum of Understanding dated May 12, 2009 between the Company and Green Solutions & Technologies, LLC~~	~~Filed with the SEC on July 9, 2009 as part of the Company’s Current Report on Form 8-K~~
~~10.7~~	~~Form of Debt Settlement Subscription Agreement dated July 1, 2009 between the Company and John L. Ogden~~	~~Filed with the SEC on July 9, 2009 as part of the Company’s Current Report on Form 8-K~~
~~10.8~~	~~Service Agreement dated September 24, 2009 between Ecologic Products, Inc. and Park ‘N Fly Inc.~~	~~Filed with the SEC on September 29, 2009 as part of the Company’s Current Report on Form 8-K~~
~~10.9~~	~~Agreement dated September 29, 2009 between the Company and North Sea Securities LP.~~	~~Filed with the SEC on April 14, 2010 as part of the Company’s Annual Report on Form 10-K~~
~~10.10~~	~~Consulting Agreement with Matrix Advisors, LLC dated October 1, 2009~~	~~Filed with the SEC on April 14, 2010 as part of the Company’s Annual Report on Form 10-K~~
~~10.11~~	~~Consulting Agreement with Huntington Chase Ltd. for Advisory Services dated October 12, 2009~~	~~Filed with the SEC on April 14, 2010 as part of the Company’s Annual Report on Form 10-K~~
~~10.12~~	~~Advisory Agreement for Executive Services of Norman A. Kunin dated as of January 1, 2010~~	~~Filed with the SEC on August 16, 2010 as part of the Company’s Current Quarterly Report on Form 10-Q~~
~~10.13~~	~~Independent Consulting Agreement between the Company and Prominence Capital, LLC effective April 5, 2010~~	~~Filed with the SEC on August 16, 2010 as part of the Company’s Current Quarterly Report on Form 10-Q~~
~~10.14~~	~~Agreement dated November 23, 2010 with BMO Capital Markets~~	~~Filed with the SEC on April 16, 2012 as part of the Company’s Annual Report on Form 10-K~~
~~10.15~~	~~Independent Consulting Agreement between the Company and Oracle Capital Partners, LLC effective as of April 1, 2011.~~	~~Filed with the SEC on August 15, 2011 as part of the Company’s Current Quarterly Report on Form 10-Q~~
~~10.16~~	~~Placement Agent Agreement between the Company and View Trade Securities, Inc. effective as of April 12, 2011~~	~~Filed with the SEC on August 15, 2011 as part of the Company’s Current Quarterly Report on Form 10-Q~~
~~10.17~~	~~Employment Agreement between the Company and William B. Nesbitt effective as of November 1, 2011~~	~~Filed with the SEC on April 16, 2012 as part of the Company’s Annual Report on Form 10-K~~
~~10.18~~	~~Share Exchange Agreement and Plan of Merger dated March 16, 2012~~	~~Filed with the SEC on March 22, 2012 as part of the Company’s Current Report on Form 8-K~~
~~10.19~~	~~Consulting Agreement between the Company and Greg Suess dated July 5, 2012~~	~~Filed with the SEC on November 19, 2012~~6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
~~10.20~~3.12	~~Consulting Agreement between the Company and NUF Enterprises LLC dated July 5, 2012~~Certificate of Incorporation of Enigma-Bulwark Risk Management, Inc. filed August 30, 2019	Filed with the SEC on ~~November 19, 2012~~June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
~~10.21~~(10)	~~Engagement Letter between the Company and Wellington Shields & Co., LLC dated September 12, 2012~~Material Contracts
10.1	License Agreement between PearTrack Systems Group Ltd. and AudioEye, Inc. dated June 30, 2014	Filed with the SEC on ~~November 19, 2012~~June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
~~10.22~~10.2	~~Engagement Letter between the Company and Wellington Shields & Co., LLC dated September 12, 2012~~	~~Filed with the SEC on November 19, 2012 as part of the Company’s Quarterly Report on Form 10-Q~~
~~10.23~~	~~Modification Agreement between the Company and Huntington Chase Financial Group dated October 12, 2012~~	~~Filed with the SEC on April 1, 2013 as part of the Company’s Annual Report on Form 10-K~~
~~10.24~~	Assignment and Licensed Rights Agreement ~~between the Company and~~with PearLoxx Limited dated December 19, 2014	Filed with the SEC on January 26, 2015, as part of the Company’s Current Report on form 8-K
~~10.25~~10.3	Amendment to the Assignment and Licensed Rights Agreement ~~between the Company~~with and PearLoxx Limited dated March 9, 2015	Filed with the SEC on May 20, 2015, as part of the Company’s Quarterly Report on ~~form~~Form 10-Q
~~(16)~~10.4	~~Auditors Letters~~Intellectual Property Purchase Agreement with Safer, Inc. dated October 11, 2018
~~16.4~~	~~Letter dated June 7, 2013 from Anton & Chia LLC~~	Filed with the SEC on ~~June~~October 10, ~~2013~~2019, as part of the Company’s Current Report on ~~Form~~form 8-K
~~16.5~~10.5	~~Letter~~Revenue Sharing Agreement with Safer, Inc. dated ~~November 18, 2015 from Seale & Beers CPA's~~October 11, 2018	Filed with the SEC on ~~November 18, 2015~~October 10, 2019, as part of the Company’s Current Report on form 8-K
10.6	Royalty Agreement with Safer, Inc. dated October 11, 2018	Filed with the SEC on October 10, 2019, as part of the Company’s Current Report on form 8-K
10.7	Employment Agreement with Kyle W. Withrow dated October 1, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form ~~8-K~~10-Q
10.8	Intellectual Property Purchase Agreement with Intellectual Property Network, Inc. dated October 11, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.9	Revenue Sharing Agreement with Intellectual Property Network, Inc. dated October 11, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.10	Royalty Agreement with Intellectual Property Network, Inc. dated October 11, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.11	Consulting Agreement with MJ Management Services, Inc. dated November 1, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.12	Consulting Agreement with Huntington Chase Ltd. dated November 1, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.13	Consulting Agreement with David Rocke dated May 1, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.14	Consulting Agreement with Michael Gabriele dated May 1, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.15	Non-Compete, Non-Dilution and Registration Rights Agreement with David Rocke dated August 28, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.16	Non-Compete, Non-Dilution and Registration Rights Agreement with Michael Gabriele dated August 28, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.17	Consulting Agreement with Clive Oosthuizen dated September 1, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.18	Consulting Agreement with Yinuo Jiang dated October 1, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.19	Non-Compete, Non-Dilution and Registration Rights Agreement with Michael Gabriele dated August 28, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.20	Joint Venture Agreement with Prime Africa dated October 3, 2020	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
(21)	Subsidiaries of the Registrant
21.1	Enigma-Bulwark Risk Management, Inc. PearTrack Systems Group, Ltd. Ecologic Car Rentals, Inc. Ecologic Products, Inc.
~~(23)~~(31)	~~Consents~~Section 302 Certifications
~~23.1~~31.1*	~~Letter from Seale and Beers, CPA’s dated April 15, 2014~~Section 302 Certification of Clive Oosthuizen	Filed ~~with the SEC on April 15, 2014 as part of the Company’s Annual Report on Form 10-K~~herewith.
~~23.2~~31.2*	~~Letter from Seale and Beers, CPA’s dated April 15, 2015~~Section 302 Certification of Calli R. Bucci	Filed ~~with the SEC on April 15, 2015 as part of the Company’s Annual Report on Form 10-K~~herewith.
~~(31)~~(32)	Section ~~302~~906 Certifications
31.132.1	~~Section 302 Certification of Edward W. Withrow Jr.~~	~~Filed herewith.~~
31.2*	~~Section 302 Certification of Calli Bucci~~	~~Filed herewith.~~
~~(32)~~	~~Section 906 Certifications~~
32.1*	Section 906 Certification of ~~Edward W. Withrow Jr.~~Clive Oosthuizen	Filed herewith.
32.2*	Section 906 Certification of Calli R. Bucci	Filed herewith.
(101)	Interactive Data Files
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.

**

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or 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.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.


	~~PEARTRACK SECURITY SYSTEMS, INC.~~ENIGMA-BULWARK, LTD.


Dated: ~~December 23, 2015~~June 8, 2023	/s/ ~~Edward W. Withrow Jr.~~Clive Oosthuizen
	~~Edward W. Withrow Jr.~~Clive Oosthuizen
	President and CEO


Dated: ~~December 23, 2015~~June 8, 2023	/s/ Calli Bucci
	Calli Bucci
	Chief Financial Officer


PEARTRACK SECURITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	September 30, 2015			December 31, 2014
ASSETS
Current assets
Cash and cash equivalents	$	74,621		$	64,753
Accounts receivable		4,683			––
Refunds and claims receivable		4,947			15,892
Prepaid expenses		1,108			716
Total current assets		85,359			81,361

Investment in securities		1,206			16,887
Property and equipment, net		2,244
Intangible assets, unencumbered, net		2,033,086			435,000
Intangible assets, pledged to creditors, net		1,377,270			1,455,624
Other assets		6,447			6,447

TOTAL ASSETS	$	3,505,612		$	1,995,319

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES
Current liabilities
Accounts payable and accrued expenses	$	1,261,742		$	1,165,990
Deferred revenue		225,000			225,000
Related party payables		387,882			297,581
Notes payable-short-term convertible-related party		787,837			787,837
Notes and loans payable-short-term		893,075			912,244
Total current liabilities		3,555,536			3,388,652

Long-term liabilities
Notes payable-long-term convertible-related party, net of unamortized discount		2,427,018			2,108,362
Total long-term liabilities		2,427,018			2,108,362
Total liabilities		5,982,552			5,497,014

STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value, 25,000,000 shares authorized, none issued and outstanding		––			––
Common stock, $0.001 par value, 250,000,000 shares authorized, 69,454,714 and 59,965,091 issued and outstanding as of September 30, 2015, and December 31, 2014, respectively		69,455			59,965
Additional paid in capital		10,765,800			8,126,703
Subscriptions receivable		(100	)		(1,600	)
Accumulated deficit		(13,305,512	)		(11,695,730	)
Accumulated comprehensive income (loss)		(6,585	)		8,967
Total stockholders' deficit		(2,476,942	)		(3,501,695	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	3,505,612		$	1,995,319


PEARTRACK SECURITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the nine months ended
	September 30, 2015			September 30, 2014
Cash flow from operating activities:
Net loss and comprehensive income (loss)	$	(1,625,334	)	$	(1,282,560	)
Comprehensive income (loss)		(15,550	)		(88,058	)
Net loss		(1,609,784	)		(1,194,502	)

Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of deferred stock compensation		502,147			138,750
Accruals converted to related party loans		271,247			351,500
Depreciation and amortization		186,631			86,105
Discount amortization		68,159			64,701
Loss on disposal of asset		––			(1,925	)
Changes in operating assets and liabilities:
Increase in accounts receivable		(4,683	)		––
Decrease in refunds and claims receivable		10,945			14,174
Decrease in prepaid expenses		(392	)		(984	)
Increase in accounts payable and accrued expenses		95,753			107,494
Increase in deferred revenue		––			337,500
Increase in related party payables		90,301			521,259
Net cash provided by (used in) operating activities		(389,676	)		427,922

Cash flow from investing activities:
Cash received from subsidiary		674			––
Purchase of office equipment		(2,362	)		(755	)
Purchase of intellectual property		––			(450,000	)
Net cash provided by (used in) investing activities		(1,688	)		(450,755	)

Cash flow from financing activities:
Repayment of loans payable		(19,168	)		(39,171	)
Proceeds from issuance of common stock		418,519			––
Subscriptions received		1,750			5
Net cash provided by financing activities		401,101			(39,166	)

Effect of exchange rate changes		131			(7	)

Net increase (decrease) in cash		9,868			(62,006	)

Cash - beginning of period		64,753			65,446

Cash - end of period	$	74,621		$	3,440


NONCASH ACTIVITIES
Common stock subscriptions receivable	$	100		$	––
Conversion of debt into common stock		––			1,509,016
Conversion of related party payable to related party convertible note payable	$	271,247		$	351,500

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	––		$	137,423
Income taxes paid	$	––		$	––


	September 30, 2015			December 31, 2014
Intellectual property, unencumbered	$	2,156,245		$	450,000
Accumulated amortization		(123,159	)		(15,000	)
Intellectual property, unencumbered, net		2,033,086			435,000

Intellectual property, pledged to creditors		1,567.060			1,567.060
Accumulated amortization		(189,790	)		(111,436	)
Intellectual property, pledged to creditors, net	$	1,377,270		$	1,455,624


Principal	Interest Rate	Conversion Rate	Maturity Date

$188,755	7%	$0.05	1 year from demand
$500,000	5%	$0.25	12/31/2015


	September 30, 2015			December 31, 2014
Deferred tax assets:
Net operating loss carry forwards	$	4,439,000		$	3,863,000
Less valuation allowance		(4,439,000	)		(3,863,000	)
Net deferred tax asset	$	––		$	––


	For the nine months ended			For the year ended
	September 30, 2015			December 31, 2014

Income (loss) before taxes		(1,619,790	)		(1,920,226	)
Statutory rate		34%			34%

Computed expected tax payable (recovery)	$	552,000		$	653,000
Non-recognizable income (loss)		(4,000	)		(34,000	)
Non-deductible expenses		––			––
Change in valuation allowance		(548,000	)		(619,000	)
Reported income taxes	$	––		$	––


	Three months ended				Nine months ended				variances
	September 30, 2015		September 30, 2014		September 30, 2015		September 30, 2014		3-month			9-month
Amortization of stock options granted	$	––	$	15,000	$	––	$	45,000	$	(15,000	)	$	(45,000	)
Amortization of deferred stock compensation		145,248		31,250		502,147		93,750		113,998			408,397
Depreciation and amortization		70,447		19,339		186,631		86,105		51,108			100,526
Legal, accounting and professional fees		53,118		40,216		119,247		79,395		12,902			39,852
Management consulting services		153,249		226,252		459,747		678,751		(73,003	)		(219,004	)
Other consulting fees		3,277		15,000		12,737		45,000		(11,723	)		(32,263	)
Office supplies and miscellaneous expenses		36,498		37,850		102,175		123,626		(1,352	)		(21,451	)
Rent expense		18,771		23,923		56,263		57,523		(5,152	)		(1,260	)
Total general and administrative expenses	$	480,608	$	408,830	$	1,438,947	$	1,209,150	$	71,778		$	229,797

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 last 90 days.

Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)

Yes ☐ No ☒

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