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

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

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ YES ☐ NO

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ YES ☒ NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ☐ YES ☐ NO

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

We are filing this Amendment No. 1 on Form 10-Q/A (the “Amendment”) to restate the following items of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, which we originally filed with the Securities and Exchange Commission on May 21, 2018 (the “Original Form 10-Q”):

We have also updated the signature page, the certifications of our Chief Executive Officer and Chief Financial Officer in Exhibits 31.1, 31.2, 32.1, and 32.2 and our financial statements formatted in Extensible Business Reporting Language (XBRL). No other sections were affected, but for the convenience of the reader, the report on Form 10-Q/A restates in its entirety, as amended, our Original Form 10-Q.

On August 10, 2018, after discussions with our management and outside advisors, the Audit Committee of our Board of Directors concluded that the restatement of the unaudited interim financial statements included in the Original Form 10-Q for the three months ended March 31, 2018 was required to correct errors in the Company’s accounting associated with the valuation of the derivative liability related to the conversion feature included in the convertible note described in Notes 3 and 9(g) during the three months ended March 31, 2018.

The effect of the error is to (1) decrease the goodwill recorded upon the acquisition of ADEX Corp and subsidiaries by $2,152,200; (2) decrease the fair value of the derivative liability by $2,394,911; and, (3) decrease the net loss for the three months ended March 31, 2018 by $242,711. The Company also reclassified the value of Series A Preferred Stock from permanent equity to mezzanine due to fact that as of March 31, 2018, the Company has an insufficient number of common shares authorized to satisfy conversion of the preferred stock into common stock. The Company determined that the misstated amounts are material to the March 31, 2018 financial statements. As a result, the Company amended and restated the interim financial statements for the three months ended March 31, 2018.

This report on Form 10-Q/A has been signed as of a current date and all certifications of the Company’s Chief Executive Officer and Chief Financial Officer are given as of a current date. Except as discussed above and as further described in Note 2 to the consolidated financial statements, the Company has not modified, or updated disclosures presented in this Amendment. Accordingly, the Amendment does not reflect events occurring after the Original Form 10-Q or modify or update those disclosures affected by subsequent events. Information not affected by the restatement is unchanged and reflects disclosures made at the time of the filing of the Original Form 10-Q. As a result of these misstatements, the Company has concluded there was a material weakness in the Company’s internal control over financial reporting as of March 31, 2018. See additional discussion included in Part I, Item 4 of this amended Quarterly Report on Form 10-Q/A.

The unaudited interim consolidated financial statements of our company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars, unless otherwise noted.

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

~~Condensed consolidated~~Consolidated statements of ~~cash flows~~stockholder’s deficit

~~(Expressed in U.S. dollars)~~For the Three Months Ended March 31, 2019 and 2018

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

(The accompanying notes are an integral part of these unaudited consolidated financial statements)

Spectrum Global Solutions, Inc., (the “Company”) (f/k/a Mantra Venture Group Ltd.) was incorporated in the State of Nevada on January 22, 2007 to acquire and commercially exploit various new energy related technologies through licenses and purchases. On December 8, 2008, the Company continued its corporate jurisdiction out of the State of Nevada and into the province of British Columbia, Canada. On April 25, 2017, the Company entered into and closed on an Asset Purchase Agreement with InterCloud Systems, Inc. (“InterCloud”). Pursuant to the terms of the Asset Purchase Agreement, the Company purchased 80.1% of the assets associated with InterCloud’s “AW Solutions” business. After the acquisition of AW Solutions, the Company provides professional, multi-service line, telecommunications infrastructure and outsource services to the wireless and wireline industry. On November 15, 2017, the Company changed its name to “Spectrum Global Solutions, Inc.”. On February 14, 2018, the Company entered into an agreement with InterCloud providing for the sale, transfer, conveyance and delivery to the Company of the remaining 19.9% of the assets associated with InterCloud’s AWS business not already purchased by the Company.

On February 6, 2018, the Company entered into and closed on a Stock Purchase Agreement with ~~InterCloud.~~InterCloud Systems, Inc. (“InterCloud”). Pursuant to the terms of the Stock Purchase Agreement, ~~InterCloud agreed to sell, and Spectrum agreed to purchase,~~the Company purchased all of the issued and outstanding capital stock and membership interests of ADEX Corp., (“ADEX”). The Company closed and completed the acquisition on February 27, 2018. After the acquisition of ADEX, ~~Puerto Rico, LLC~~the Company provides professional, multi-service line, telecommunications infrastructure, outsource services and ~~ADEXCOMM (collectively, “ADEX”).~~staffing solutions to the wireless and wireline industry. On ~~February 27,~~May 18, 2018, the Company ~~completed~~transferred all of its ownership interests in and to its subsidiaries Carbon Commodity Corporation, Mantra China Limited, Mantra Media Corp., Mantra NextGen Power Inc., Mantra Wind Inc., Climate ESCO Ltd. and Mantra Energy Alternatives Ltd. to an entity controlled by the ~~acquisition~~Company’s former Chief Executive Officer, Larry Kristof. The new owner of ~~ADEX.~~the aforementioned entities assumed all liabilities and obligations with respect to such entities. On January 4, 2019, the Company closed a Stock Purchase Agreement InterCloud. Pursuant to the terms of the ~~Stock~~ Purchase Agreement, InterCloud agreed to sell, and the Company ~~purchased from InterCloud~~agreed to purchase, all of the issued and outstanding capital stock ~~and membership interests~~ of ~~ADEX.~~TNS, Inc., an Illinois corporation (“TNS”).

The accompanying unaudited interim consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Transition Report on Form 10-K for the seven month period from June 1, 2017 to December 31, 2017. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The ~~Company has yet to acquire commercially exploitable energy related technology and is unlikely to generate earnings in the immediate or foreseeable future. The~~ recently acquired AW Solutions and ADEX business has also incurred losses and experienced negative cash flows from operations during its most recent fiscal years. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. As of March 31, ~~2018,~~2019, the Company has an accumulated ~~loss~~deficit of ~~$22,188,456,~~$25,502,692, and a working capital deficit of ~~$9,472,076.~~$11,242,041. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management requires additional funds over the next twelve months to fully implement its business plan. Management is currently seeking additional financing through the sale of equity and from borrowings from private lenders to cover its operating expenditures. There can be no certainty that these sources will provide the additional funds required for the next twelve months.

The accompanying unaudited interim consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Form 10-K for the year ended December 31, 2018. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. These consolidated financial statements include the accounts of the Company and its subsidiaries, ~~Carbon Commodity Corporation, Climate ESCO Ltd., Mantra Energy Alternatives Ltd., Mantra China Inc., Mantra China Limited, Mantra Media Corp., Mantra NextGen Power Inc., Mantra Wind Inc.,~~ AW Solutions, Inc. (from the date of acquisition, April 25, 2017), Tropical Communications, Inc. (from the date of acquisition, April 25, 2017), AW Solutions Puerto Rico LLC. (from the date of acquisition, April 25, 2017), ADEX Corp., ADEX Puerto Rico, LLC and ADEXCOMM (from the date of acquisition, February 27, 2018), TNS, Inc. (from the date of acquisition, January 4, 2019). All the subsidiaries are ~~wholly-owned with~~wholly-owned. During the ~~exception~~year ended December 31, 2018, the Company disposed of the following subsidiaries; Carbon Commodity Corporation, Climate ESCO Ltd., ~~which is 64.55% owned,~~ Mantra Energy Alternatives Ltd., ~~which is 88.21%.~~Mantra China Inc., Mantra China Limited, Mantra Media Corp., Mantra NextGen Power Inc., and Mantra Wind Inc. All inter-company balances and transactions have been eliminated.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company records unbilled receivables for services performed but not billed. ~~At March 31, 2018 and December 31, 2017, unbilled receivables totaled $1,624,940 and $11,429, respectively, and are included in accounts receivable.~~ Management reviews a customer’s credit history before extending credit. The Company maintains an allowance for doubtful accounts for estimated losses. Estimates of uncollectible amounts are reviewed each period, and changes are recorded in the period in which they become known. Management analyzes the collectability of accounts receivable each period. This review considers the aging of account balances, historical bad debt experience, and changes in customer creditworthiness, current economic trends, customer payment activity and other relevant factors. Should any of these factors change, the estimate made by management may also change. The allowance for doubtful accounts at March 31, ~~2018~~2019 and December 31, ~~2017~~2018 was ~~$560,971~~$514,032 and ~~$54,482~~$502,868, respectively.

Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates:

Goodwill was generated through the acquisition of AW Solutions, ADEX and ~~ADEX~~TNS as the total consideration paid exceeded the fair value of the net assets acquired.

The Company tests its goodwill for impairment at least annually on December 31^st and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company’s consolidated financial results.

The Company tests goodwill by estimating fair value using a Discounted Cash Flow (“DCF”) model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant’s weighted-average cost of capital used to discount future cash flows to their present value. There were no impairment charges during the three months ended March 31, ~~2018.~~2019.

At March 31, ~~2018~~2019 and December 31, ~~2017,~~2018, definite-lived intangible assets primarily consist of non-compete agreements, tradenames and customer relationships which are being amortized over their estimated useful lives ranging from ~~1-20~~3-20 years.

The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives.

For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value.

In accordance with ASC 360, “Property, Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. There were no impairment charges recorded during the three months ended March 31, 2019.

Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in income.

The Company’s integrated foreign subsidiaries are financially or operationally dependent on the Company. The Company uses the temporal method to translate the accounts of its integrated operations into U.S. dollars. Monetary assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period, except for amortization, which is translated on the same basis as the related asset. The resulting exchange gains or losses are recognized in income.

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The Company conducts business, and files federal and state income, franchise or net worth, tax returns in Canada, the United States, in various states within the United States and the Commonwealth of Puerto Rico. The Company determines ~~its~~it’s filing obligations in a jurisdiction in accordance with existing statutory and case law. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. For Canadian and U.S. income tax returns, the open taxation years range from 2010 to ~~2017.~~2018. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of Canada and U.S. have not audited any of the Company’s, or its subsidiaries’, income tax returns for the open taxation years noted above.

Significant management judgment is required in determining the provision for income taxes, and in particular, any valuation allowance recorded against the Company’s deferred tax assets. Deferred tax assets are regularly reviewed for recoverability. The Company currently has significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, which should reduce taxable income in future periods. The realization of these assets is dependent on generating future taxable income.

The Company follows the guidance set forth within ASC Topic 740, “Income ~~Taxes”~~Taxes” (“ASC Topic 740”) which prescribes a two-step process for the financial statement recognition and measurement of income tax positions taken or expected to be taken in an income tax return. The first step evaluates an income tax position in order to determine whether it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position. The second step measures the benefit to be recognized in the financial statements for those income tax positions that meet the more likely than not recognition threshold. ASC Topic 740 also provides guidance on de-recognition, classification, recognition and classification of interest and penalties, accounting in interim periods, disclosure and transition. Penalties and interest, if incurred, would be recorded as a component of current income tax expense.

The Company received a tax notice from the Puerto Rican government requesting payment of taxes related to 2014 in the amount of ~~$166,084~~$156,711 plus penalties and interest of ~~$96,764~~$111,200 for a total obligation due of ~~$262,848.~~$267,911. This tax assessment is included in accrued expenses at March 31, ~~2018 and December 31, 2017.~~2019.

On May 28, 2014, ~~the~~ FASB ~~issued ASU No. 2014-09, Revenue from Contracts with Customers (“~~issues Topic 606”), to update the financial reporting requirements for revenue recognition. Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer606. As of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. This guidance became effective for the Company beginning on January 1, 2018, ~~and entities have~~ the ~~option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. The~~ Company adopted ~~this standard~~Topic 606 using the modified retrospective approach onapplied to any contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the new guidance, while prior periods continue to be reported in accordance with previous accounting guidance. The Company determined that no cumulative effect adjustment to accumulated deficit was necessary upon adoption as there were no significant revenue recognition differences identified between the new and previous accounting guidance.

~~In preparation for adoption of the standard, the~~The Company ~~evaluated each of~~recognizes revenue based on the five ~~steps in~~criteria for revenue recognition established under Topic ~~606, which are as follows:~~606: 1) ~~Identify~~identify the contract, ~~with~~2) identify separate performance obligations, 3) determine the ~~customer; 2) Identify~~transaction price, 4) allocate the transaction price among the performance obligations, ~~in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations;~~ and 5) ~~Recognize~~recognize revenue ~~when (or as)~~as the performance obligations are satisfied.

~~Reported revenue will not be affected materially in any period due~~Contract Types

The Company’s contracts fall under three main types: 1) unit-price, 2) fixed-price, and 3) time-and-materials. Unit-price contracts relate to services being performed and paid on a unit basis, such as per mile of construction completed. Fixed-price contracts are based on purchase order line items that are billed on individual invoices as the ~~adoption~~project progresses and milestones are reached. Time-and-materials contracts include employees working permanently at customer locations and materials costs incurred by those employees.

A significant portion of ~~ASC Topic 606 because: (1)~~ the ~~Company expects to identify similar performance obligations under Topic 606 as compared~~Company’s revenues come from customers with ~~deliverables and separate units of account previously identified; (2)~~whom the Company has ~~determined the transaction price to be consistent; and (3) the Company records revenue at the same point~~a master service agreement (“MSA”). These MSA’s generally contain customer specific service requirements.

A performance obligation is a promise in time, upon delivery of services, under both ASC Topic 605 and Topic 606, as applicable under the terms of the contract with the customer. Additionally, the Company does not expect the accounting for fulfillment costs or costs incurred to obtain a contract to ~~be affected materially in any period due~~transfer a distinct good or service to the ~~adoption~~customer, and is the unit of ~~Topic 606.~~account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types the performance obligation is satisfied at different times. For professional services revenue, the performance obligation is met when the work is performed. In certain cases this may be each day, or each week depending on the customer. For construction services, the performance obligation is met when the work is completed and the customer has approved the work. Contract assets include unbilled amounts for services performed but not yet billed. These amounts are included in accounts receivable on the consolidated balance sheets. Contract liabilities include unbilled costs and are included in accrued expenses on the consolidated balance sheets.

There are also certain considerations related to accounting policies, business processes and internal control over financial reporting that are associated with implementing Topic 606. The Company has evaluated its policies, processes, and control framework for revenue recognition, and identified and implemented the changes needed in response to the new guidance.

Lastly, disclosure requirements under the new guidance in Topic 606 have been significantly expanded in comparison to the disclosure requirements under the current guidance, including disclosures related to disaggregation of revenue into appropriate categories, performance obligations, the judgments made in revenue recognition determinations, adjustments to revenue which relate to activities from previous quarters or years, any significant reversals of revenue, and costs to obtain or fulfill contracts.Revenue Service Types

The ~~infrastructure and~~following is a description of the Company’s revenue service types, which include professional services ~~revenues are derived~~and construction:

The Company disaggregates its revenue from contracts ~~to provide technical engineering services along~~ with ~~contracting services to commercial~~customers by service type, contract type, contract duration, and ~~governmental customers. The Company’s service contracts generally require specific tasks~~timing of transfer of goods or ~~services that~~services. See the Company must perform under the contract. The Company recognizes revenues associated with these services upon the completion of the related task or service which is at the time the four revenue recognition criteria have been met. Direct costs incurred related to performance of the task or service are deferred and recorded as prepaid expense and are expensed when the related revenue is recognized.below tables:

The Company also ~~generates~~disaggregates its revenue by geographic location and operating segment (See Note 13).

Accounts receivable include amounts from ~~service contracts with certain customers. These contracts~~work completed in which the Company has billed. The amounts due are ~~accounted~~stated at their net estimated realizable value. The Company maintains an allowance for ~~under~~doubtful accounts to provide for the ~~proportional performance method. Under this method, revenue~~estimated amount of receivables that will not be collected. The allowance is ~~recognized in proportion~~based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the ~~value provided to~~extent applicable.

Contract assets include unbilled amounts for services performed but not yet billed. These amounts are included in contract assets on the ~~customer for each project as of each reporting date.~~

consolidated balance sheets. The Company records unbilled receivables for ~~revenues earned,~~services performed but not ~~yet~~ billed. At March 31, 2019 and December 31, 2018, unbilled receivables totaled $2,227,195 and $1,861,895, respectively.

Contract liabilities include unbilled costs and are included in accrued expenses on the consolidated balance sheets.

Cost of revenues includes all direct costs of providing services under our contracts, including costs for direct labor provided by employees, services by independent subcontractors, operation of capital equipment (excluding depreciation and amortization), direct materials, insurance claims and other direct costs.

The Company records stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation”, 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.

The Company applies ASC 505-50, “Equity-Based Payments to Non-Employees” with respect to options and warrants issued to non-employees which requires the use of option valuation models to measure the fair value of the options and warrants at the measurement date.

The Company uses the Black-Scholes option pricing model to calculate the fair value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period.

The Company computes ~~loss~~earnings (loss) per share in accordance with ASC 260, “~~Earnings~~“Earnings per ~~Share~~”Share” which requires presentation of both basic and diluted earnings (loss) per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing the loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of March 31, ~~2018,~~2019, the Company had ~~1,235,555,276~~29,135,606 (March 31, ~~2017~~2018 – ~~647,182,222)~~6,177,776) common stock equivalents outstanding.

ASC 220, “Comprehensive Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As ~~of March~~at December 31, 2018 and 2017 the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the consolidated financial statements.

The Company adopted FASB Accounting Standards Codification, Topic 842, Leases ("ASC 842") electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 840.

The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use ("ROU") assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months as of January 1, 2019. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, unamortized lease incentives provided by lessors, and restructuring liabilities, Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.

On January 1, 2018, we adopted the new accounting standard ASC 606,Revenue from Contracts with Customers,, and all of the related amendments (“new revenue standard”) as discussed in Revenue Recognition accounting policy description.

In February 2016, the FASB issued ASU 2016-02,Leases(“ASU 2016-02”), which, among other things, requires an entity to recognize a right-of-use asset and a lease liability on the balance sheet for substantially all leases, including operating leases. Expanded disclosures with additional qualitative and quantitative information are also required. ASU 2016-02 and its amendments are effective for interim and annual reporting periods beginning after December 15, 2018 and early adoption was permitted.

The Company adopted ASU 2016-02 and its amendments and applied the transition provisions as of January 1, 2019, which included recognizing a cumulative-effect adjustment through opening retained earnings as of that date. Prior year amounts were not recast under this transition approach and, therefore, prior year amounts are excluded from the leased properties footnote. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical assessments of: (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company did not elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. The Company elected a policy of not recording leases on its condensed consolidated balance sheets when the leases have a term of 12 months or less and the Company is not reasonably certain to elect an option to purchase the leased asset. The Company recognizes payments on these leases within selling, administrative and other expenses on a straight-line basis over the lease term. The standard did not materially impact consolidated net income or liquidity.

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or result of ~~operations.~~operations

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivables. The Company maintains its cash balances with high-credit-quality financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits may be withdrawn upon demand and therefore bear minimal risk.

The Company provides credit to customers on an uncollateralized basis after evaluating client creditworthiness. For the three months ended March 31, ~~2018, two~~2019, four customers accounted for ~~22%~~30%, 18%, 10% and ~~18%~~10%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 30%, 20%, 7% and ~~22%~~5%, respectively, of trade accounts receivable as of March 31, ~~2018.~~2019. For the three months ended March 31, ~~2017,~~2018, two customers accounted for ~~54%~~22% and 9%18%, respectively, of consolidated revenues for the period. ~~In addition, amounts due from these customers represented 53% and 13%, respectively, of trade accounts receivable as of March 31, 2017.~~

The Company’s customers are primarily located within the domestic United States of America and Puerto Rico. Revenues generated within the domestic United States of America accounted for approximately ~~89%~~97% of consolidated revenues for the three month period ended March 31, ~~2018 (84%~~2019 (89% - ~~2017)~~2018). Revenues generated from customers in Puerto Rico accounted for approximately ~~11%~~3% of consolidated revenues for the three month period ended March 31, ~~2018 (16%~~2019 (11% - ~~2017)~~2018).

The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by US generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows:

Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and.

Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Financial instruments consist principally of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, loans payable and convertible debentures. Derivative liabilities are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. There were no transfers into or out of “Level 3” during the three months ended March 31, ~~2018~~2019 and ~~2017.~~2018. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

Our financial assets and liabilities carried at fair value measured on a recurring basis as of ~~March~~December 31, 2018 and December 31, 2017, consisted of the following:

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. See Note 109 for additional information.

The Company accounts for derivative instruments in accordance with ASC Topic 815, ”“Derivatives and Hedging” and all derivative instruments are reflected as either assets or liabilities at fair value in the balance sheet. The Company uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of March 31, ~~2018~~2019, and December 31, ~~2017,~~2018, the Company had a $~~4,708,733~~$2,784,674 and ~~$4,749,712~~$3,166,886 derivative liability, respectively.

Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy.

Certain ~~prior period amounts~~balances in previously issued consolidated financial statements have been reclassified to ~~conform to~~be consistent with the current period presentation. The reclassification had no impact on total financial position, net income, or stockholders’ equity.

On January 4, 2019, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with InterCloud Systems, Inc., a Delaware corporation (“InterCloud”). Pursuant to the terms of the Purchase Agreement, InterCloud agreed to sell, and the Company agreed to purchase, all of the issued and outstanding capital stock of TNS, Inc., an Illinois corporation (“TNS”). The Company ~~has restated its quarterly unaudited consolidated financial statements as of~~closed and for the period ended March 31, 2018 to correct for a misstatement identified associated with valuation of the derivative liability related to the conversion feature included in the convertible note described in Notes 3 and 9(g), as well as to reclassify preferred stock from permanent equity to mezzanine, during the three months ended March 31, 2018.

~~The effect of the error is to decrease the goodwill recorded upon~~completed the acquisition of ADEX by $2,152,200, the fair value of the derivative liability by $2,394,911 and decrease net loss by $242,711 for the three months ended March 31, 2018. The effect of the reclassification of preferred stock is to decrease permanent equity and increase the value of mezzanine equity instruments by $317,767. The Company determined that the misstated amounts are material to the March 31, 2018 financial statements. As a result, the Company amended and restated the interim financial statements for the three months ended March 31, 2018.on January 4, 2019.

~~The following tables reflect the impact of the restatement to the consolidated balance sheet and the consolidated statement of operations.~~

The purchase price paid by the Company for the ~~Assets~~ includes ~~the assumption of certain liabilities and contracts associated with ADEX, $3,000,000~~$980,000 in cash, ~~of which $2,500,000 was~~ paid at closing, ~~and $500,000 was be retained by the Company for 90 days in order to satisfy any outstanding liabilities of ADEX incurred prior to the closing date,~~ and the issuance to InterCloud of a ~~one-year~~ convertible promissory note in the aggregate principal amount of ~~$2,000,000~~$620,000 (the ~~“ADEX Note”~~“Note”).

The Company has performed a valuation analysis of the fair market value of ~~ADEX’~~TNS’ assets and liabilities. The provisional fair value of the purchase consideration issued to the sellers of TNS was allocated to the net tangible assets acquired. We accounted for the acquisition of TNS as the purchase of a business under GAAP under the acquisition method of accounting, the assets and liabilities acquired were recorded as of the acquisition date, at their respective fair values and consolidated with those of our company. The excess of the aggregate fair value of the net tangible assets has been allocated to an intangible asset, value of customer accounts and the remainder to goodwill. The purchase price allocation was based, in part, on management’s knowledge of TNS' business and is preliminary. Once we complete our analysis to finalize the purchase price allocation, which includes finalizing the valuation report from a third-party appraiser and a review of potential intangible assets, it is reasonably possible that, there could be significant changes to the preliminary values below.

The following table summarizes the allocation of the preliminary purchase price as of the acquisition date:

The following table summarizes our consolidated results of operations for the ~~three months~~year ended ~~March~~December 31, 2018, as well as unaudited pro forma consolidated results of operations as though the acquisition had occurred on January 1, ~~2017:~~2018:

On April 25, 2017, pursuant to the Asset Purchase Agreement with InterCloud, the Company purchased, 80.1% of the assets associated with InterCloud’s “AW Solutions” business (“AWS”) including, but not limited to, fixed assets, real property, intellectual property, and accounts receivables (collectively, the “Assets”).

The purchase price paid by the Company for the Assets includes the assumption of certain liabilities and contracts associated with AWS, the issuance to InterCloud of a convertible promissory note in the aggregate principal amount of $2,000,000 (as described in Note 9(j)), and a potential earn-out after three months in an amount equal to the lesser of (i) three times EBITDA (as defined in the Asset Purchase Agreement) of the business for the six-month period immediately following the closing and (ii) $1,500,000. During the seven months ended December 31, 2017, Intercloud agreed to reduce the contingent liability to $793,893, as a result, the Company recorded a $615,518 gain on settlement of debt. The Company also issued Intercloud the convertible note described in Note 9(f) with a principal amount of $793,894 to settle a contingent liability of $793,893.

On February 14, 2018, the Company entered into an agreement with InterCloud providing for the sale, transfer, conveyance and delivery to the Company of the remaining 19.9% of the assets associated with InterCloud’s AWS business not already purchased by the Company (collectively, the “Remaining Assets”). The acquisition of the initial 80.1% of AWS took place during the fiscal year ended December 31, 2017. As consideration for the Remaining Assets, the Company issued InterCloud a common stock purchase warrant that entitles InterCloud to purchase a number of shares equal to 4% of the number of shares of the Company’s common stock outstanding at the time of exercise at an exercise price of $0.006 per share. The warrant has a three year term.

The Company recorded the fair value of the warrant of $259,000, reduced the carrying value of the AWS non-controlling interest from $133,256 to $0 and recorded the difference of $125,744 as additional paid in capital.

During the three months ended March 31, ~~2018,~~2019, the Company recorded ~~$4,395 (2017~~$7,018 (2018 - ~~$5,603)~~$4,395) of depreciation expense.

During the three months ended March 31, ~~2018,~~2019, the Company recorded ~~$43,438 (2017~~$86,934 (March 31, 2018 - ~~$Nil)~~$43,438) of ~~amortization expense.~~amortization.

~~Borrowings~~Interest is payable under the ~~Super G~~ Loan and Security Agreement ~~are~~at a per annum rate equal to ~~be repaid~~the Prime Rate (as defined in ~~semi-monthly installments (including interest) of $43,125 for 36 months starting on March 16, 2018, for total payments of $1,552,500.~~the Loan and Security Agreement) plus 2%. The ~~total interest charge is expected to total $402,500 and the company paid additional finance fees of $247,500. The~~Borrower’s obligations ~~of the Company~~ under the ~~Super G~~ Loan and Security Agreement are secured by ~~a lien on substantially~~ all ~~of the~~ assets of the Company and ~~its subsidiaries, including accounts receivable, intellectual property, equipment and other personal property. The Super G Loan Agreement contains certain restrictions and covenants and requires~~ADEX Puerto Rico LLC. In addition, the Company issued a warrant (the “Warrant”) to ~~comply with certain financial covenants, including maintaining unrestricted cash and minimum levels~~the Lender to purchase an amount of ~~revenue and adjusted EBITDA.~~

The Super G Loan Agreement contains customary events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, breaches of representations and warranties, certain cross defaults, certain bankruptcy related events, monetary judgments defaults and failure to own 100%shares of the Company’s ~~subsidiaries. Upon~~common stock equal to $150,000 divided by the Warrant Price (as defined in the Warrant) at a price per share equal to 125% of the prior day’s closing price.

The Loan and Security Agreement provides that upon the occurrence of an event of default, among other things, all outstanding amounts under the ~~outstanding obligations may be accelerated~~Loan and ~~become~~Security Agreement or any portion thereof becomes immediately due and payable. ~~During~~Events of default under the ~~period ended March~~Loan and Security Agreement include, among other items, the Borrower’s failure to comply with certain affirmative and negative covenants relating to the Company, its securities and its financial condition.

In connection with the financing, on October 10, 2018, the Company also issued a warrant to purchase 113,953 shares of the Company’s common stock at $1.25 per share for three years. The fair value of the warrants of $87,410 and $190,000 of debt issuance costs resulted in a discount to the note payable of $277,410. At December 31, 2018, the Company ~~repaid $43,125~~owed $3,483,015 pursuant to this agreement and will record accretion equal to the debt discount of $257,194 over the remaining term of the ~~loan~~note. At during the three months ended March 31, 2019 the Company borrowed an additional $1,063,686 and recorded accretion of ~~$31,812 increasing~~$108,014. At March 31, 2019, the ~~carrying value~~Company owed $4,546,701 pursuant to this agreement and will record accretion equal to the debt discount of $149,180 over the remaining term of the ~~note to $891,187.~~note.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Libertas $31,602 each week based upon an anticipated 20% of its future receivables until such time as $1,460,000 has been paid, a period Libertas and the Financing Parties estimated to be approximately eleven months. In the event that the Financing Agreement is paid off earlier than eleven months, there is a discount to the sum owed. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions. The Company used the proceeds of the Financing Agreement for the acquisition of TNS, as discussed in Note 3.

~~In accordance with ASC 470-20, “~~~~Debt with Conversion and Other Options~~”, the Company determined that the convertible debentures contained no embedded beneficial conversion feature as the convertible debentures were issued with a conversion price higher than the fair market value of the Company’s common shares at the time of issuance.

In accordance with ASC 470-20, the Company allocated the proceeds of issuance between the convertible debt and the detachable share purchase warrants based on their relative fair values. Accordingly, the Company recognized the fair value of the share purchase warrants of $45,930 as additional paid-in capital and an equivalent discount against the convertible debentures. The Company had recorded accretion expense of $45,930, increasing the carrying value of the convertible debentures to $250,000.

On January 19, 2012, the Company entered into a settlement agreement with one of the debenture holders to settle a $50,000 convertible debenture and $122,535 in accounts payable and accrued interest with the debt holder. Pursuant to the agreement, the debt holder agreed to reduce the debt to Cdn$100,000 on the condition that the Company pays the amount of Cdn$2,500 per month for 40 months, beginning March 1, 2012 and continuing on the first day of each month thereafter.

On July 18, 2012, the Company entered into a settlement agreement with the $150,000 debenture holder. Pursuant to the settlement agreement, the lender agreed to extend the due date until April 11, 2013 and the Company agreed to pay $43,890 of accrued interest within five days of the agreement (paid), pay the accruing interest on a monthly basis (paid), and pay a $10,000 premium in addition to the $150,000 principal outstanding on April 11, 2013. On April 29, 2013, the Company entered into an amended settlement agreement whereby the lender agreed to extend the due date to September 15, 2013 and the Company agreed to pay $6,836 of interest for the period from April 1 to September 15, 2013 upon execution of the agreement (paid) and granted the lender 100,000 stock options exercisable at $0.12 per share for a period of two years.

On November 15, 2013, the Company entered into a second settlement agreement amendment. Pursuant to the second amendment, on November 15, 2013, the Company agreed to pay interest of $4,438 (paid) and commencing February 1, 2014, the Company would make monthly payments of $10,000 on the outstanding principal and interest. On December 4, 2015, the holder of the convertible debenture entered into an agreement to sell and assign the remaining outstanding principal to a third party. The Company approved and is bound by the assignment and sale agreement.

The Company evaluated the modifications and determined that the creditor did not grant a concession. In addition, as the present value of the amended future cash flows had a difference of less than 10% of the cash flows of the original debt, it was determined that the original and new debt instruments are not substantially different. As a result, the modification was not treated as an extinguishment of the debt and no gain or loss was recognized because the fair value of the old debt and new debt remained the same. The Company recorded the fair value of $12,901 for the stock options as additional paid-in capital and a discount. During the year ended May 31, 2014, the Company repaid $40,000 of the debenture. As of May 31, 2014, the Company had accreted $12,901 of the discount bring the carrying value of the convertible debenture to $114,661. During the year ended May 31, 2015, the Company repaid $54,808 decreasing the carrying value to $59,853. During the year ended May 31, 2017, the Company recorded an additional fee of $21,266 increasing the carrying value to $81,119. On November 16, 2017, the debenture and $15,423 of accrued interest was converted into Series A Preferred Stock as described in Note 10(b).

~~At March 31, 2018, the other remaining debenture of $50,000 remained outstanding and past due.~~

The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $1,174,000 resulted in a discount to the note payable of $943,299. ~~During the year ended May 31, 2017, the Company recorded accretion of $77,465 increasing the carrying value of the note to $1,134,166.~~ On December 15, 2017, February 14, 2018, ~~and~~ February 21, 2018, June 7, 2018, January 24, 2019, and March 15, 2019 the holder of the convertible promissory note entered into agreement to sell and assign a total of ~~$310,000~~$105,000, $105,000, $105,000, $39,375, $100,000 and $100,000 of the outstanding principal, respectively to a third party. The Company approved and is bound by the assignment and sale agreement. As a result of the assignment, the conversion price for the ~~$310,000~~total of $354,375 of notes assigned is now equal to the lesser 70% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion and ~~$0.04.~~$8. The Company accounted for this assignment in accordance with ASC 470-50 “Modifications and Extinguishments”. In accordance with ASC 470-50, the Company accounted for the assignment as a debt extinguishment and adjusted the fair value of the derivative to its fair value on the assignment date. During the ~~three-month period~~year ended ~~March~~December 31, 2018, ~~$92,703~~the entire December 15, 2017 note of $105,000, the entire February 14, 2018 note of $105,000 and $55,000 of the February 21, 2018 $105,000 note was converted into ~~27,094,947~~661,795 shares of common stock. ~~During the three-month period ended~~The February 21, 2018, June 7, 2018, notes are described in Notes 8(b), and (c) respectively. The January 24, 2019 and March 15, 2019 assignments are described in Note 8(d). At March 31, ~~2018, the Company recorded accretion of $282,976 increasing~~2019, the carrying value of the notes ~~to $1,828,940.~~was $1,445,625,

~~The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “~~~~Derivatives and Hedging~~”. The initial fair value of the conversion feature of $1,744,661 and the fair value of the warrants of $425,918 resulted in a discount to the note payable of $400,000 and the recognition of a loss on derivatives of $1,770,579. During the year ended May 31, 2017, the Company recorded accretion of $54,526, increasing the carrying value of the note to $54,526. During the three-month period ended December 31, 2017, the Company recorded accretion of $173,031 increasing the carrying value of the note to $194,557. On March 12, 2018, the Company issued 10,560,000 shares of common stock upon the conversion of $33,000 of principal pursuant of accrued interest of $2,640. On February 6, 2018, $374,000 of the debenture and $32,560 of accrued interest was converted into Series A Preferred Stock as described in Note 12(a).

On September 26, 2018, the holder of the convertible promissory note entered into agreement to sell and assign a total of $75,000 of the outstanding principal to a third party. The Company approved and is bound by the assignment and sale agreement. As a result of the assignment, the assigned note bears interest at 5% and the conversion price for the $75,000 of notes assigned is now equal to the lesser 75% of the lowest volume-weighted average price during the 15 trading days immediately preceding the date of conversion and $8. On December 3, 2018, the holder of the convertible promissory note entered into agreement to sell and assign a total of $50,000 of the outstanding principal to a third party. The Company accounted for the assignments in accordance with ASC 470-50 “Modifications and Extinguishments”. In accordance with ASC 470-50, the Company accounted for the assignment as a debt extinguishment and adjusted the fair value of the derivative to its fair value on the assignment date. During the ~~three-month period~~year ended ~~March~~December 31, 2018, $74,993 of the note was converted into 321,500 shares of common stock. During the year ended December 31, 2018, the Company recorded accretion of ~~$37,913~~$352,251 increasing the carrying value of the notes to ~~$1,398,913.~~$1,565,681.

During the three months ended March 31, 2019, $49,995 of the note was converted into 617,600 shares of common stock. During the three months ended March 31, 2019, the Company repaid $45,077 and recorded accretion of $125,967 increasing the carrying value of the notes to $1,596,577.

The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $348,000 resulted in a discount to the note payable of $348,000. During the ~~three-month period~~three months ended March 31, ~~2018,~~2019, the Company recorded accretion of ~~$18,895~~$62,466 increasing the carrying value of the notes to ~~$464,789.~~$684,858.

The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $571,079 and the warrant of $158,772 resulted in a discount to the note payable of $500,000 and an initial derivative expense of $229,851. During the ~~three-month period~~three months ended March 31, ~~2018,~~2019, the Company recorded accretion of ~~$70,048~~$55,000 increasing the carrying value of the notes to ~~$70,048.~~$500,000.

The interest on the outstanding principal due under the secured note accrues at a rate of 12% per annum. All principal and accrued interest under the secured note is due on October 23, 2019 and is convertible into shares of the Company’s common stock at a fixed conversion price of $1.00. While during the first three months that the secured note is outstanding, only interest payments are due to the lender, beginning in month four, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the secured note. The secured note includes customary events of default, including non-payment of the principal or accrued interest due on the secured note. Upon an event of default, all obligations under the secured note will become immediately due and payable.

If the Company issues any common stock or common stock equivalents at an effective price per share less than $1 then the conversion price of the note will be reduced to the lower price. As long as the note is not in default the Company may repay the note at 110% of the outstanding principal amount. If the Company defaults upon the note it bears interest at 18% per annum.

In connection with the Purchase Agreement, the Company entered into a security agreement, dated as of April 23, 2018, with the Lender (the “Security Agreement”) and an intellectual property security agreement, dated as of April 23, 2018, with the Lender pursuant to which the Company granted a security interest in substantially all of the assets of the Company, but for those assets over which Prestige Capital Corporation holds a lien, to secure the Company’s obligations under the secured note. In addition, all of the Company’s subsidiaries are guarantors of the Company’s obligations to the Lender pursuant to the Secured Note.

The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $3,325,000 resulted in a discount to the note payable of $1,500,000 and an initial derivative expense of $1,825,000. During the three months ended March 31, 2019, the Company repaid $131,579 of the note which resulted in a $72,000 gain on the extinguishment of the note and associated derivative liability. During the three months ended March 31, 2019, the Company recorded accretion of $130,500 increasing the carrying value of the notes to $239,291

The interest on the outstanding principal due under the secured note accrues at a rate of 12% per annum. All principal and accrued but unpaid interest under the secured note is due on May 18, 2019. The secured note is convertible into shares of the Company’s common stock at a fixed conversion price of $1 per share. Interest is payable monthly on the 18th of each month. While interest payments must be made in cash during the first six months that the secured note is outstanding, beginning in month seven, and on each monthly anniversary thereafter until maturity, the Company has the option to pay interest payments in stock, subject to certain equity conditions being satisfied. Any payment of interest or principal scheduled after December 1, 2018 that is made in cash will be subject to a 5% prepayment premium. Any other prepayment is subject to a 10% premium. The secured note includes customary events of default, including non-payment of the principal or accrued interest due on the secured note and cross default to other notes owing to the investor. Upon an event of default, all obligations under the secured note and other notes owing to the investor will become immediately due and payable. In connection with the issuance of the secured note, the Company issued the investor 496,101 shares of Series A Preferred Stock with a fair value of $193,509 which was expensed. The investor was granted a right to participate in future financing transactions of the Company while the secured note remains outstanding.

In connection with the Securities Purchase Agreement, the Company entered into an amendment to the existing Security Agreement described in Note 10(o). Pursuant to the amendment, the Company agreed that obligations under the secured note and related documents will be secured pursuant to the existing security interest in substantially all of the assets of the Company securing other notes issued to the Investor (except for those assets over which Prestige Capital Corporation holds a lien). In addition, all of the Company’s subsidiaries are guarantors of the Company’s obligations to the Investor pursuant to the Secured Note and have granted a similar security interest over substantially their assets.

The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $468,000 resulted in a discount to the note payable of $280,959 and an initial derivative expense of $187,041. During the three months ended March 31, 2019, the Company recorded accretion of $89,783 increasing the carrying value of the notes to $212,959.

The interest on the outstanding principal due under the secured note accrues at a rate of 12% per annum. All principal and accrued but unpaid interest under the secured note is due on March 15, 2019. The secured note is convertible into shares of the Company’s at the greater of $0.80 or 75% of the lowest VWAP in the 10 trading days prior to conversion.

The Company may repay the note at 115% of the outstanding principal amount. If the Company defaults upon the note it bears interest at 18% per annum.

The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $23,000 resulted in a discount to the note payable of $23,000. During the year ended December 31, 2018, the Company recorded accretion of $17,860 increasing the carrying value of the notes to $69,860. During the three months ended March 31, 2019, the Company repaid the note in full and recognized a loss on settlement of debt of $2,300.

The interest on the outstanding principal due under the secured note accrues at a rate of 12% per annum. All principal and accrued but unpaid interest under the secured note is due on March 15, 2019. The secured note is convertible into shares of the Company’s at the greater of $1 or 75% of the lowest VWAP in the 10 trading days prior to conversion.

The Company may repay the note at 115% of the outstanding principal amount. If the Company defaults upon the note it bears interest at 18% per annum.

The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $103,000 resulted in a discount to the note payable of $75,000 and an initial derivative expense of $28,000. During the year ended December 31, 2018, the Company recorded accretion of $37,554 increasing the carrying value of the notes to $37,554. During the three months ended March 31, 2019, the Company repaid the note in full and recognized a loss on settlement of debt of $90,000.

The interest on the outstanding principal due under the secured note accrues at a rate of 8% per annum. All principal and accrued but unpaid interest under the secured note is due on December 4, 2019. The secured note is convertible into shares of the Company’s at 65% of lowest trading price for the fifteen trading days prior to the conversion date.

The Company may repay the note at 150% of the outstanding principal amount. If the Company defaults upon the note it bears interest at 18% per annum.

The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 “Derivatives and Hedging”. The initial fair value of the conversion feature of $189,000 resulted in a discount to the note payable of $144,000.

On January 28, 2019, the holder of the convertible promissory note entered into agreement to sell and assign a total of $620,000 of the $620,000 outstanding principal to two third parties, with $186,000 and $434,000 of principal assigned to each party. The Company approved and is bound by the assignment and sale agreement. During the three months ended March 31, 2019, $70,000 of each of the notes was converted into a total of 1,400,000 shares of common stock. During the three months ended March 31, 2019, the Company recorded accretion of $13,011 and $23,645 on the two notes increasing the carrying value of the two notes to $85,844 and $286,845 respectively.

The embedded conversion option of the convertible debenture described in Note ~~9(e) contains a~~8 contain conversion ~~feature~~features that ~~qualifies~~qualify for embedded derivative classification. The fair value of the liability will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments.

Upon the issuance of the convertible note payable described in Note ~~9(e),~~8, the Company concluded that it only has sufficient shares to satisfy the conversion of some but not all of the outstanding convertible notes, warrants and options. The Company elected to reclassify contracts from equity with the earliest inception date first. As a result, none of the Company’s previously outstanding convertible instruments qualified for derivative reclassification, however, any convertible securities issued after the election ~~including the convertible note described in Notes 9(e) to 9(g),~~ qualified for derivative classification. The Company reassesses the classification of the instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

During the year ended May 31, 2017, the Company reclassified 350,000 options exercisable at $0.03 until March 16, 2017 with a fair value of $2,350, 2,000,000 warrants exercisable at $0.03 until August 29, 2018 with a fair value of $13,745, 533,333 warrants exercisable at $0.80 with a fair value of $Nil, 4,075,000 warrants exercisable at $0.37 with a fair value of $16,978 and a $59,853 note convertible at $0.40 with a fair value of $41 that qualified for treatment as derivative liabilities.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities.

The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using Monte-Carlo model or a Binomial Model based on various assumptions.

Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

On November 15, 2017, the Company revised its authorized share capital to increase the number of authorized common shares from 275,000,000 common shares with a par value of $0.00001, to 750,000,000 common shares with a par value of $0.00001.

Treasury stock- The Company holds 621,258 shares in treasury at a cost of $277,436.

On November 15, 2017, the Company created one series of the 20,000,000 preferred shares it is authorized to issue, consisting of 8,000,000 shares, to be designated as Series A Preferred Shares.

On October 29, 2018, the Company amended and restated the Company’s Series A Convertible Preferred Stock. The principal terms of the Series A Preferred Shares are as follows:

Dividend rights – The holders of the Series A Preferred Shares shall not be entitled to receive any dividends. No dividends (other than those payable solely in common stock) shall be paid on the common stock or any class or series of capital stock ranking junior, as to dividends, to the Series A Preferred Shares during any fiscal year of the Corporation until there shall have been paid or declared and set apart during that fiscal year for the holders of the Series A Preferred Shares a dividend in an amount per share equal to (i) the number of shares of common stock issuable upon conversion of the Series A Preferred Stock times (ii) the amount per share of the dividend to be paid on the common stock.

Conversion rights – The holders of the Series A Preferred Shares have the right to convert each Class A Preferred Share and all accrued and unpaid dividends thereon shall be convertible at the option of the holder thereof, at any time after the issuance of such share into fully paid and nonassessable shares of common stock of the Corporation. The number of shares of common stock into which each share of the Series A Preferred Shares may be converted shall be determined by dividing the sum of the Stated Value of the Series A Preferred Shares ($~~0.25~~1.00 per share) being converted and any accrued and unpaid dividends by the Conversion Price in effect at the time of the conversion. The Series A Preferred Shares may be converted at an initial conversion price of the greater of 75% of the lowest VWAP during the ten ~~(10)~~ trading day period immediately preceding the date a conversion notice is delivered or ~~$0.004.~~$0.40 subject to adjustment for any subdivision or combination of the Company’s outstanding shares of Common Stock.

Liquidation rights -– Upon the occurrence of any liquidation, each holder of Series A Preferred Shares then outstanding shall be entitled to receive, out of the assets of the Corporation available for distribution to its stockholders, before any payment shall be made in respect of the common stock, or other series of preferred stock then in existence that is outstanding and junior to the Series A Preferred Shares upon liquidation, an amount per share of Series A Preferred Shares equal to the amount that would be receivable if the Series A Preferred Shares had been converted into common stock immediately prior to such liquidation distribution, plus, accrued and unpaid dividends.

In accordance with ASC 480Distinguishing Liabilities from Equity, the Company has classified the ~~following~~ Series A Preferred Shares as ~~a liability.~~ temporary equity or “mezzanine”.

On ~~March 23,~~April 16, 2018, the Company ~~revised the conversion rights~~designated 1,000 shares of Series B preferred stock of the Company (the “Series B Preferred Stock”) with a stated value of $3,500 per share. The Series AB Preferred Stock ~~to include a minimum conversion price of $0.004. This modification resulted in the reclassification~~is neither redeemable nor convertible into common stock. The principal terms of the Series A Preferred Shares are as follows:

Issue Price - The stated price for the Series B Preferred shall be $3,500 per share.

Dividends - The holders of the Series B Preferred shall not be entitled to receive any dividends.

Preference of Liquidation - The Corporation’s Series A Preferred Stock (the “Senior Preferred Stock) shall have a liquidation preference senior to the Series B Preferred. Upon any Fundamental Transaction, liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the Holders of the shares of the Series B Preferred shall be entitled, after any distribution or payment is made upon any shares of capital stock of the Corporation having a liquidation preference senior to the Series B Preferred, including the Senior Preferred Stock, but before any distribution or payment is made upon any shares of Common Stock or other capital stock of the Corporation having a liquidation preference junior to the Series B Preferred, to be paid in cash the sum of $3,500 per share. If upon such liquidation, dissolution or winding up, the assets to be distributed among the Series B Preferred Holders and all other shares of capital stock of the Corporation having the same liquidation preference as the Series B Preferred shall be insufficient to permit payment to said holders of such amounts, then all of the assets of the Corporation then remaining shall be distributed ratably among the Series B Preferred Holders and such other capital stock of the Corporation having the same liquidation preference as the Series B Preferred, if any. Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after provision is made for Series B Preferred Holders and all other shares of capital stock of the Corporation having the same liquidation preference as the Series B Preferred, if any, then-outstanding as provided above, the holders of Common Stock and other capital stock of the Corporation having a liquidation preference junior to the Series B Preferred shall be entitled to receive ratably all remaining assets of the Corporation to be distributed.

Voting - The holders of shares of Series B Preferred shall be voted together with the shares of Common Stock such that the aggregate voting power of the Series B Preferred is equal to 51% of the total voting power of the Company.

In accordance with ASC 480 Distinguishing Liabilities from ~~a liability to~~Equity, the Company has classified the Series B Preferred Shares as temporary equity or “mezzanine”. ~~As a result of the reclassification, the Company recognized a gain on extinguishment of $287,815.~~

~~As of March 31, 2018, the~~The following table summarizes the continuity of share purchase warrants:

As ofat March 31, ~~2018,~~2019, the following share purchase warrants were outstanding:

~~On March 22, 2018, we~~In February 2016, the FASB issued ~~Pryor Cashman LLP~~ASU No. 2016-02,Leases, which introduced a ~~warrant to purchase 12,000,000 shares~~lessee model that requires the majority of ~~our common stock at an exercise price of $0.0016 per share. The proceeds of such warrant are~~leases to be ~~used~~recognized on the balance sheet. On January 1, 2019, the Company adopted the ASU using the modified retrospective transition approach and elected the transition option to ~~apply~~recognize the adjustment in the period of adoption rather than in the earliest period presented. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to ~~outstanding amounts owed to Pryor Cashman LLP~~carry forward the historical lease classification. Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of approximately $269,341 and $269,341 respectively, as of January 1, 2019. During the three months ended March 31, 2019, non-cash right of use assets recorded in exchange for ~~accrued legal fees.~~non-cash operating lease liabilities was $269,341. The Company leases certain office space and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term. The Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.

The following table ~~summarizes~~sets forth the ~~continuity~~operating lease right of ~~the Company’s stock options:~~

~~Additional information regarding stock options~~use (“ROU”) assets and liabilities as of March 31, ~~2018~~2019:

Expense related to leases is recorded on a straight-line basis over the lease term, including rent holidays. During the three months ended March 31, 2019, the Company recognized operating lease expense of $48,175. Operating lease costs are included within selling, administrative and other expenses on the condensed consolidated statements of income and comprehensive income. During the three months ended March 31, 2019, short-term lease costs were $78,035.

Cash paid for amounts included in the measurement of operating lease liabilities were $47,309 for the three months ended March 31, 2019, and this amount is included in operating activities in the condensed consolidated statements of cash flows. During the three months ended March 31, 2019, the Company reduced its operating lease liabilities by $36,150 for cash paid.

The operating lease liabilities as of March 31, 2019 reflect a weighted average discount rate of 48%. Lease payments over the next five years and thereafter are as follows:

During the three months ended March 31, ~~2017, the Company operated in one operating segment in one geographical area.~~

~~During the three months ended March 31,~~2019 and 2018, the Company had ~~three~~one operating ~~segments~~segment including:

Factors used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance. The Company’s operating segments have been broken out based on similar economic and other qualitative criteria. The Company operates the SGS reporting segment in one geographical area (the United States), the AW Solutions operating segment in two geographical areas (the United States and Puerto Rico), and the ADEX operating segment in two geographical areas (the United States and Puerto Rico).

Financial statement information by operating segment for the three months ended March 31, ~~2018 (As Restated)~~2019 is presented below:

Geographic information for the three months ended and as ofat March 31, ~~2018 (As Restated)~~2019 is presented below:

	Revenues $		Long-Lived Assets $

Puerto Rico		310,478		3,371
United States		11,025,254		6,817,755
Consolidated Total		11,335,732		6,821,126

Financial statement information by operating segment for the three months ended March 31, 2018 is presented below:

~~17.~~

~~Net Income (Loss) Per Share~~

	Spectrum Global $			AWS/ADEX $			Total $

Net Sales		–			4,327,764			4,327,764
Operating (loss) income		(666,249	)		(77,242	)		(743,491	)
Interest expense		107,894			71,431			179,325
Depreciation and amortization		–			47,833			47,833
Total Assets as of December 31, 2018		99,835			12,830,561			10,774,123

Geographic information for the three months ended March 31, 2018 is presented below:

Three Months Three Months
Ended Ended
March 31, March 31,
2018 2017
$ $

Numerator:
Net income (loss) 134,269 (1,018,921 )
Convertible note interest 87,860 -
Adjusted diluted net income (loss) 222,129 (1,018,921 )

Denominator:
Weighted average shares outstanding used in computing net income per share:
Basic 445,161,856 117,272,240
Effect of dilutive stock options and convertible notes payable 1,238,870,969 –
Effect of preferred shares 1,768,439 –
Diluted 1,685,801,264 117,272,240

Net income (loss) per share applicable to common stockholders:
Basic 0.00 (0.01 )
Diluted 0.00 (0.01 )

	Revenues $		Long-Lived Assets $

Puerto Rico		466,624		5,377
United States		3,861,140		4,016,895
Consolidated Total		4,327,764		4,022,273

~~18.~~16.

Net (Loss) Income Per Share

	Three Months			Three Months
	Ended			Ended
	March 31,			March 31,
	2019			2018
	$			$

Numerator:
Net income (loss)		(1,332,587	)		134,269
Convertible note interest		–			87,860
Adjusted diluted net income (loss)		(1,332,587	)		222,129

Denominator:
Weighted average shares outstanding used in computing net income per share:
Basic		11,771,927			2,225,809
Effect of dilutive stock options and convertible notes payable		–			6,194,355
Effect of preferred shares		–			8,842
Diluted		11,771,927			8,429,006

Net income (loss) per share applicable to common stockholders:
Basic		(0.11	)		0.06
Diluted		(0.11	)		0.03

17.	Subsequent Events

On April ~~6, 2018,~~2. 2019, the Company ~~designated 1,000~~issued 1,400,000 shares of ~~Series B preferred~~common stock upon the conversion of ~~the Company (the “Series B Preferred Stock”) with a stated value~~$70,000 and $6.930 of $3,500 per share. The Series B Preferred Stock is neither redeemable nor convertible into common stock. The aggregate voting power of the Series B Preferred Stock is equal to fifty-one percent of the total voting power of the Company.accrued interest described in Note 8 (d).


	b)	On April ~~23, 2018, each of Roger Ponder, the Company’s Chief Executive Officer, and Keith Hayter, the Company’s President, exchanged certain shares of common stock of~~13, 2019, the Company ~~held by each of them for shares of~~amended the newly designated Series B Preferred Stock. Mr. Ponder exchanged 108,500,000 shares of common stock for an aggregate of 500 shares of Series B Preferred Stock, and Mr. Hayter exchanged 108,500,000 shares of common stock for an aggregate of 500 shares of Series B Preferred Stock.note described in Note 6(d). Pursuant to the amendment, the notes maturity was extended from April 13, 2019 to April 13, 2020. In addition, the interest rate increased from 8% to 10%.

On April 23, ~~2018, the Company entered into and closed on a Securities Purchase Agreement with an institutional investor, pursuant to which~~2019, the Company issued to799,980 shares of common stock upon the ~~lender a senior secured convertible promissory note in the aggregate principal amount~~conversion of ~~$1,578,947.37 an aggregate purchase price~~$30,000 and $9,999 of ~~$1,500,000.00.~~

~~The interest on the outstanding principal due under the secured note accrues at a rate of 12% per annum. All principal and~~ accrued interest under the secured note is due on October 23, 2019 and is convertible into shares of the Company’s common stock at a fixed conversion price of $0.005. While during the first three months that the secured note is outstanding, only interest payments are due to the lender, beginningdescribed in month four, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the secured note. The secured note includes customary events of default, including non-payment of the principal or accrued interest due on the secured note. Upon an event of default, all obligations under the secured note will become immediately due and payable.Note 8(d).

On ~~May 18, 2018, the Company entered into and closed on a Securities Purchase Agreement with an institutional investor, pursuant to which~~April 23, 2019, the Company issued 699,980 shares of common stock upon the conversion of $25,000 and $9,999 of accrued interest described in Note 8(d).

On May 3, 2019, the Company and Dominion Capital LLC (the “Holder”) entered into an exchange agreement (the “Exchange Agreement”) to exchange the ~~investor~~two Senior Secured Convertible Promissory Notes described in Notes 8(h) and (i), with principal amounts of $1,052,632 plus accrued interest and $295,746 plus accrued interest respectively, for a ~~senior secured convertible promissory~~single Senior Secured Convertible Promissory note ~~in the aggregate~~with a principal amount of ~~$295,746.73 for an aggregate purchase price of $280,959.39.~~$1,571,134 (the “Exchange Note”).

The interest on the outstanding principal due under the ~~secured note~~Exchange Note accrues at a rate of 12% per annum. All principal and accrued ~~but unpaid~~ interest under the ~~secured note~~Exchange Note is due on ~~May 18, 2019. The secured note~~October 17, 2020 and is convertible into shares of the Company’s ~~common stock at a fixed~~Common Stock. The conversion price ~~of $0.005 per share. Interest is payable monthly~~in effect on the ~~18th~~date such conversion is effected shall be equal to (i) initially, $0.10 or (ii) on or after the date of ~~each month.~~the closing of the next public or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount greater than $100,000, one hundred and five percent (105%) of the price of the Common Stock issuable in the offering. While ~~interest payments must be made in cash~~ during the first six months that the ~~secured note~~Exchange Note is outstanding, only interest payments are due to the Holder, beginning in ~~month seven,~~October 2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under the Company has the option to pay interest payments in stock, subject to certain equity conditions being satisfied. Any payment of interest or principal scheduled after December 1, 2018 that is made in cash will be subject to a 5% prepayment premium. Any other prepayment is subject to a 10% premium.Exchange Note. The ~~secured note~~Exchange Note includes customary events of default, including non-payment of the principal or accrued interest due on the ~~secured note and cross default to other notes owing to the investor.~~Exchange Note. Upon an event of default, all obligations under the ~~secured note and other notes owing to the investor~~Exchange Note will become immediately due and payable. ~~In connection with the issuance of the secured note, the Company will also issue the investor 496,101 shares of Series A Preferred Stock.~~

The ~~investor~~Holder was granted a right to participate in future financing transactions of the Company while the ~~secured note~~Exchange Note remains outstanding.

The proceeds of the Secured Note were used to repurchase and retire 1,273,161 shares of Series A Preferred Stock of the Company. In addition, the Company transferred all of its ownership interests in and to its subsidiaries Carbon Commodity Corporation, Mantra China Limited, Mantra Media Corp., Mantra NextGen Power Inc., Mantra Wind Inc., Climate ESCO Ltd. and Mantra Energy Alternatives Ltd. to an entity controlled by the Company’s former Chief Executive Officer, Larry Kristof. The new owner of the aforementioned entities assumed all liabilities and obligations with respect to such entities.

On May 6, 2019, in accordance with terms of the notes described in Notes 8(a) and (e), the Company issued an aggregate of 15,707,163 shares of the Company’s common stock to InterCloud pursuant to the automatic forced conversion of all outstanding obligations under the Notes, in full satisfaction thereof. The shares issued were unregistered and are subject to Rule 144 restrictions.

On May 10, 2019, the Company entered into an amendment to the note payable described in Note 8(g). Pursuant to the amendment the maturity date of the note was extended from January 15, 2019 to June 1, 2019.

~~-27-~~

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

The following information has been adjusted to reflect the restatement of our consolidated financial statements as described in the “Explanatory Note” at the beginning of this amended Quarterly Report on Form 10-Q/A and in Note 2, “Restatement of Consolidated Financial Statements,” in Notes to the Consolidated Financial Statements (Unaudited) of this amended Quarterly Report on Form 10-Q/A.

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plan”, “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 our or our 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 we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited consolidated financial statements are stated in United States dollars ($) and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our 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 “$“” refer to United States dollars and all references to “common stock” refer to the common shares in our capital stock.

Unless specifically set forth to the contrary, when used in this report the terms “we”, “our”, the “Company” and similar terms refer to Spectrum Global Solutions, Inc., a Nevada corporation, and its consolidated subsidiaries.

The information that appears on our website atwww.SpectrumGlobalSolutions.comis not part of this report.

Description of Business

On February 5, 2018, we completed our corporate jurisdiction continuation from the jurisdiction of the Province of British Columbia to the jurisdiction of the State of Nevada in accordance with the Articles of Conversion and the Articles of Incorporation filed with the Nevada Secretary of State. Our principal offices are located at 300 Crown Oak Centre, Longwood, Florida 32750. Our telephone number is (407) 512-9102. On January 2, 2018, we changed our fiscal year end to December 31.

We are a leading provider of services and solutions in the telecommunications ~~sector~~industry to top tier communication carriers, service providers, utilities and ~~research developer of alternative energy alternatives in the energy sector.~~Fortune 1000 enterprises. The telecommunications sector provides services and solutions throughout the United States, Guam, Canada and the Caribbean. ~~Our energy sector services are related to research and development of alternative energy technologies.~~

~~-28-~~

Our telecommunications division, which was acquired on April 25, 2017, is supported by its subsidiaries: AW Solutions, Inc., AW Solutions Puerto Rico, LLC and Tropical Communications, Inc. (collectively known as “AW Solutions”) ~~and~~, ADEX ~~CORP.~~CORP and ADEX Puerto Rico ~~LLC.~~LLC (acquired February 27, 2018), (collectively known as “ADEX”) and T N S, Inc (acquired January 4, 2019). AW Solutions provides a broad range of professional services and solutions to top tier communication carriers and Fortune 1000 enterprise customers. The telecommunication division offers carriers, service providers and enterprise customers professional contracting services, to include: infrastructure audits; site acquisition; architectural, structural and civil design and analysis; construction management; construction; installation; warehousing and logistics; maintenance services, that support the build-out and upgrade and operation of some of the most advanced networks, small cell, Wi-Fi, fiber and distributed antenna system (DAS) networks. We believe the expansion and migration of these next-generation networks, our long-term relationships supported by multiyear Master Service Agreements (MSA) and multi-year service contracts with major wireless, commercial wireline and wireless operators, DAS operators, tower companies, original equipment manufacturers (OEM’s) and prime contractor/project management organization provides us a significant opportunity as a long term leading and well respected industry leader in this marketplace. ADEX is a leading outsource provider of engineering and installation services, staffing solutions and other services which include consulting to the telecommunications industry, service providers and Enterprise customers. ADEX’s managed solutions diversifies the ability to service customers domestically and internationally throughout the project lifecycle. ADEX customers include many leading wireless and wireline telecommunications providers, cable broadband MSOs and Original Equipment Manufacturers (“OEM”). On a weekly basis, the Company deploys hundreds of telecommunication professionals in support of its customers. The Company believes that its global footprint of support is a differentiating factor for national and international-based customers needing a broad range of technical expertise for management of their legacy and next generation networks. The Company seeks to assist its customers throughout the entire life cycle of a network deployment via its comprehensive suite of managed solutions that include Consulting and Professional Staffing services to service providers as well as Enterprise customers, Network Implementation, Network Installation, Network Upgrades, Rebuilds, Design, Engineering and Integration Wireless Network Support, Wireless Network Integration, Wireless and Wireline Equipment Installation & Commissioning, Wireless Site Development & Construction Management, Network Engineering, Project Management, Disaster Recovery design engineering and integration.

~~Through~~ T N S, Inc. (“T N S”) is a Chicago-based structured cabling and Next-Generation DAS design and installation firm that supports voice, data, video, security and multimedia systems within commercial office buildings, multi-building campus environments, high-rise buildings, data centers and other structures. T N S, Inc. (“T N S”) is a Chicago-based structured cabling and Next-Generation DAS design and installation firm that supports voice, data, video, security and multimedia systems within commercial office buildings, multi-building campus environments, high-rise buildings, data centers and other structures. T N S extends our ~~subsidiary~~geographic reach to the Midwest area and our client reach to end-users, such as multinational corporations, universities, school districts and other large organizations and enterprise clientele that have significant ongoing next generation network needs. T N S works both in the ~~energy division, Mantra Energy Alternatives (MEA) has developed cutting edge “green” technologies that can mitigate~~US and reduce the carbon footprint of generators and consumers of fossil fuels, MEA mission and strategy of development and research efforts to acquire and commercially exploit various new energy related technologies through licenses and purchases. These energy technologies and services are to enable the sustainable consumption, production and management of resources on a residential, commercial and industrial scales on a national and international level. The company also provides marketing and graphic design services to help companies optimize their environmental awareness presence through the eyes of government, industry and the general public.Internationally.

We provide the following categories of offerings to our customers:

●

Telecommunication Division: We provide a comprehensive array of professional services and solutions to our clients that are applicable across multiple platforms and technologies to include but not limited to: Wi-Fi , Wi-Max and wide-area networks, fiber networks, DAS networks (iDAS/oDAS), small cell ~~distribution~~distributed networks, public safety networks and enterprise networks for incumbent local exchange carriers (ILECs), telecommunications original equipment manufacturers (OEMs), cable broadband multiple system operators (MSOs), tower and network aggregators, utility entities and enterprise customers. Our services teams support the deployment of new networks and technologies, as well as expand and maintain existing networks.

WaveTech Global Inc., which is under a definitive agreement to be acquired by us, is supported by its subsidiaries: Wavetech Inc., WaveTech GmbH, Inc. (collectively known as “WaveTech Global”). WaveTech is a global next generation energy management company that specializes in asset lifecycle extension, intellectual property development, and implementation services. The Company offers a global portfolio of end-to-end energy optimization and lifecycle management solutions developed from proprietary intellectual property, engineered systems, and operational expertise. WaveTech Global extensive suite of products include power asset life extension, operational servicing and automation, lifetime cost reduction, and real-time heterogeneous power source switching. WaveTech Global, through its diverse portfolio of intellectual property and engineering expertise, dramatically improves the availability and efficiency of customer networks through automation, analytics, machine learning and material science innovation. Services we provide include: Software as a Service (SaaS) subscription-based monitoring and analytics; critical power engineering design, and installation; critical power system maintenance and replacement; asset lifecycle extension that enable some of the most sophisticated and mission-critical networks in the world.

●

Energy Division: We provide research and development resources in the continued exploration of energy alternatives and technologies. MEA has successfully acquired and owns a process for the electro-reduction of carbon dioxide (“ERC”) and has secured world licenses for a mixed-reaction fuel cell (“MRFC”) which is in continuous focus toward commercial applications. The company also provides marketing and design services to help companies optimize their environmental awareness from an array of prospective ranging from the general public, industrial and government viewpoint.

Upon completion of our proposed acquisition of WaveTech Global Inc, will position our company as a leading end-to-end technology platform company that provides software, services, and solutions that dramatically increase the availability and cost efficiency of global communication solutions and supporting next generation networks. The expansion of our combined business units provides array of solutions and services which address data-center, wireless, and wireline-based networks across the globe.

Our Operating Units

Our company is comprised of the following:

●

AW Solutions. - AW Solutions, Inc., a Florida corporation (April 17, 2006), AW Solutions Puerto Rico, LLC, Puerto Rico ~~corporation~~limited liability company (March 14, 2011) and Tropical Communications, Inc., a Florida corporation (May 9, 1984), (Collectively known as, “AW Solutions”). We are professional, multi-service line, telecommunications infrastructure companies that provide outsourced services to the wireless and wireline industry. AW Solution’s services include network systems design, site acquisition services, asset audits, architectural and engineering services, program management, construction management and inspection, construction, installation, maintenance and other technical services. AW Solutions provides in-field design, Computer Aided Design and Drawing services (CADD), fiber and DAS ~~deployments.~~deployments for facilities and outdoor environments.

~~-29-~~

●

ADEX - ADEX CORP, a New York corporation (October 29, 1993) and ADEX Puerto Rico, LLC. a Puerto Rico limited liability company (April 17, 2008), (collectively known as “ADEX”). ADEX is a leading outsource provider of engineering and installation services, staffing solutions and other services which include consulting to the telecommunications industry, service providers and Enterprise customers domestically and internationally. The Company seeks to assist its customers throughout the entire life cycle of a network deployment via its comprehensive suite of managed solutions that include Consulting and Professional Staffing services to service providers as well as Enterprise customers, Network Implementation, Network Installation, Network Upgrades, Rebuilds, Design, Engineering and Integration Wireless Network Support, Wireless Network Integration, Wireless and Wireline Equipment Installation & Commissioning, Wireless Site Development & Construction Management, Network Engineering, Project Management, Disaster Recovery design engineering and integration.

●

~~Mantra Energy Alternatives, Ltd. – Mantra Energy Alternatives, Ltd.,~~T N S - T N S, Inc. an Illinois corporation (July 5, 2002) is a ~~British Columbia, Canada corporation (known~~Chicago-based structured cabling and Next-Generation DAS design and installation firm that supports voice, data, video, security and multimedia systems within commercial office buildings, multi-building campus environments, high-rise buildings, data centers and other structures. T N S extends our geographic reach to the Midwest area and our client reach to end-users, such as “MEA”), which was incorporated in Nevada on January 22, 2007. On December 8, 2008 we made a jurisdiction change from the State of Nevada into the Province of British Columbia, Canada. We focus our business strategymultinational corporations, universities, school districts and other large organizations and enterprise clientele that have significant ongoing next generation network needs. T N S works both in the ~~energy sector in the ongoing research~~US and development to commercialize alternative energy technologies and services to the residential, commercial and industrial marketplace. Continued focus and desire is to refine the technologies and exploratory efforts into strategic relationships, joint ventures, partnerships with third parties to assist in commercialization. MEA has successfully acquired and owns a process for the electro-reduction of carbon dioxide (“ERC”) and has secured world licenses for a mixed-reaction fuel cell (“MRFC”) which is in continuous focus toward commercial applications. On May 18, 2018, we divested the entities comprising our energy division, and we do not plan to operate in this segment moving forward.Internationally.

Results of Operations for the Three Month Periods Ended March 31, ~~2018~~2019 and March 31, ~~2017~~2018

Revenues

Our operating results for the three month periods ended March 31, ~~2018~~2019 and ~~2017~~2018 are summarized as follows:

	Three Months Ended March 31, 2018 (As Restated)		Three Months Ended March 31, 2017			Difference			Three Months Ended March 31, 2019			Three Months Ended March 31, 2018		Difference
Revenue	$	4,327,764	$	-		$	4,327,764		$	11,335,732		$	4,327,764	$	7,007,968
Operating expenses	$	1,286,735	$	139,873		$	1,146,862		$	11,321,033		$	5,071,255	$	6,249,778
Other income (expense)	$	822,987	$	(902,701	)	$	(1,725,688	)	$	(1,337,688	)	$	822,987	$	2,160,675	)
Net income (loss)	$	79,496	$	(1,042,574	)	$	1,122,043		$	(1,332,587	)	$	134,269	$	(1,466,856	)

Revenue generated during the three months ended March 31, ~~2018,~~2019, was ~~$4,327,764~~$11,335,752 compared to ~~(Nil) revenues during~~$4,327,764 for the ~~same~~ period ended March 31, ~~2017.~~2018. During ~~this~~the period ended March 31, ~~2018, all~~2019, a majority of our revenues and a significant portion of our expenses were generated by our acquired telecommunications division (AW Solutions, Inc.; AW Solutions Puerto Rico, LLC; Tropical Communications, Inc.) on April 25, 2017 and ~~(ADEX~~ADEX Corp, ADEX PUERTO RICO LLC, ADEX TOWERS, INC., ADEX TELECOM, INC.) on February 28, 2018. Our telecommunications division generated $9,360,833 of revenue and our TNS division, which was acquired in January 4, 2019, accounted for $1,974,899 of revenue. During the three months ended March 31, 2018, all of our revenue was generated by our telecommunications division.

Expenses

During the three months ended March 31, ~~2018,~~2019, our operating expenses were ~~$1,286,735~~$11,321,033 compared to operating expenses of ~~$139,873~~$5,071,255 for the three month period ended March 31, ~~2017.~~2018. The increase on operating expense is a result of the acquisition of ADEX on February 28, 2018, which ~~consisting~~consisted of ADEX Corp, ADEX PUERTO RICO LLC, ADEX TOWERS, ~~INC.~~INC and ADEX TELECOM, ~~INC.~~INC and the acquisition of TNS, Inc, on January 4, 2019. These expenses include general and administrative costs, all of our corporate costs, as well as costs from our subsidiaries management personnel and administrative overhead. These costs primarily consist of employee compensation and related expenses, including legal, consulting and professional fees, information technology, provisions for recoveries of bad debt and other costs not directly related to performance of our services under customer contracts. We expect these expenses to continue to generally increase as we expand our operations, but expect that such expenses as a percentage of revenue will decrease if we succeed in increasing revenues.

~~-30-~~

General and administrative costs were $1,044,708 for the three months ended March 31, 2019 compared to $661,298 for the three months ended March 31, ~~2018 compared to $132,149~~2018. Salaries and wages were $1,358,208 for the three months ended March 31, ~~2017. Salaries and wages were~~2019 compared to $577,604 for the three months ended March 31, ~~2018 compared to $2,121~~2018. Depreciation and amortization costs were $93,952 for the three months ended March 31, ~~2017. Depreciation and amortization costs were~~2019 compared to $47,833 for the three months ended March 31, ~~2018 compared to $5,603~~2018. Cost of revenues increased from$3,784,520 for the three months ended March 31, ~~2017.~~2018 to $8,824,165 for the same period in 2019.

Other Income (Expense)

For the three months ended March 31, ~~2018,~~2019, we had other expenses of $(1,337,688) compared to other income of $822,987 ~~compared to other expenses of $902,701~~for the same period in ~~2017.~~2018. The ~~increase~~decrease was primarily due to ~~a gain on extinguishment of preferred share liability of $287,815 during the three months ended March 31, 2018,~~ a gain on settlement of debt of $561,963, a gain on extinguishment of preferred stock liability of $287,815 a gain on the change in fair value of derivatives of $806,621, amortization of debt discounts of $654,087 and interest expense of $179,325 during the three months ended March 31, 2018, compared to a ~~loss~~gain on settlement of debt of ~~$5,400 during the same period in 2017, and~~$164,457, a ~~decrease in~~ loss ~~from~~on the change in fair value of ~~conversion features~~derivatives of ~~$1,434,599. This was offset by an~~$369,391, amortization of debt discounts of $661,352 and interest expense of $471,412 during the three month period ended March 31, 2019. The increase in ~~accretion~~interest expense was a result of ~~discounts on convertible debentures of $592,959.~~the higher principal debt balances outstanding in the three months ended March 31, 2019 compared to the three months ended March 31, 2018.

Net Income (Loss)

For the three months ended March 31, ~~2018,~~2019, we ~~had~~incurred a net ~~income~~loss of ~~$79,496,~~$(1,332,587) compared to a net ~~loss~~income of ~~$1,042,574~~$134,269 for the same period in ~~2017.~~2018.

Liquidity and Capital Resources

As of March 31, ~~2018,~~2019, our total current assets were ~~$6,751,851~~$11,215,761 and our total current liabilities were ~~$16,223,927,~~$22,457,802, resulting in a working capital deficit of ~~$9,472,076~~$11,242,041 compared to a working capital deficit of ~~$9,389,007~~$8,464,969 as of December 31, ~~2017.~~2018.

We suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard, we have historically raised additional capital through equity offerings and loan transactions.

Cash Flows

Three Months Ended
March 31,
2018
(As Restated)

Three Months Ended
March 31,
2017

Statement of Operations Data:

Net Cash Used In Operating Activities $ (656,590 ) $ (16,585 )
Net Cash Used In Investing Activities $ (8,889 ) $ -
Net Cash Provided by Financing Activities $ 921,925 $ 15,184
Change In Cash $ 256,446 $ (1,401 )

	Three Months Ended March 31, 2019			Three Months Ended March 31, 2018
Statement of Operations Data:

Net Cash Used In Operating Activities	$	(544,700	)	$	(656,590	)
Net Cash Used in Investing Activities	$	(994,133	)	$	(182,855	)
Net Cash Provided by Financing Activities	$	1,885,029		$	730,181
Change In Cash	$	346,196			28,893

The increase in cash that we experienced in the period ended March 31, ~~2018,~~2019, compared to the ~~decrease~~increase during the period ended March 31, ~~2017,~~2018, is primarily due to the acquisition of ADEX and its subsidiaries along with the acquisition of TNS and increased funding requirements for ongoing operating activities. During the period ended March 31, ~~2018,~~2019, the repayment of loans payable of ~~$386,125~~$6,147,609 and convertible notes payable of $331,552 was made, and proceeds were received from ~~a note~~notes and convertible notes payable of ~~$1,116,306,~~$8,367,190, which created the cash balance as noted above. We expect that our cash position will increase, due to operating profits in the telecommunication division and TNS division. Over the coming months and year, subject to raising additional funds, we plan to primarily concentrate on our ~~telecommunications business and associated projects.~~existing business.

In order to improve our liquidity, we intend to pursue additional equity financing from private placement sales of our equity securities or shareholders loans. There is no assurance that we will be successful in completing any further private placement financing. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us.

As of March 31, ~~2018,~~ we had cash of ~~$285,339~~$996,790, compared to ~~$Nil~~$285,339 as of March 31, ~~2017.~~2018. Our cash balance at the beginning of this year was ~~$28,893.~~$620,593.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Inflation

The effect of inflation on our revenue and operating results has not been significant.

~~-31-~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures.

Our management, with the participation of our Chief Executive Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, 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. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management’s evaluation, our Chief Executive Officer concluded that, as a result of the material weaknesses described below, as of December 31, ~~2017,~~2018, our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure. The material weaknesses, which relate to internal control over financial reporting, that were identified are:

	a)	Due to our small size, we do not have a proper segregation of duties in certain areas of our financial reporting process. The areas where we have a lack of segregation of duties include cash receipts and disbursements, approval of purchases and approval of accounts payable invoices for payment. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the consolidated financial statements will not be prevented or detected on a timely basis; and

	b)	We do not have any formally adopted internal controls surrounding its cash and financial reporting procedures.

We are committed to improving our financial organization. In addition, we will look to increase our personnel resources and technical accounting expertise within the accounting function to resolve non-routine or complex accounting matters. In addition, as funds are available, we will take the following action to enhance our internal controls: Hiring additional knowledgeable personnel with technical accounting expertise to further support our current accounting personnel, which management estimates will cost approximately ~~$200,000~~$300,000 per annum. As our operations are relatively small we expect that both our technical and accounting expertise will be improved, however our overall financial requirements will only increase. We continue to have net cash losses each quarter, we do not anticipate being able to hire additional internal personnel until such time as our operations are profitable on a cash basis or until our operations are large enough to justify the hiring of additional accounting personnel. We currently engage an outside accounting firm to assist us in the preparation of our consolidated financial statements this past year and will plan to evaluate our internal capabilities as we integrate the business segments to address the sufficient number of internal accounting personnel to achieve compliance. As necessary, we will engage consultants in the future in order to ensure proper accounting for our consolidated financial statements.

Due to the fact that our internal accounting staff consists solely of a Chief Executive Officer, who functions as our Principal Accounting Officer, additional personnel will also ensure the proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support us if personnel turn over issues within the department occur. We believe this will greatly decrease any control and procedure issues we may encounter in the future.

Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, ~~2018~~2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~-32-~~

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

Item 1A. Risk Factors

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

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Since the beginning of the three month period ended March 31, ~~2018,~~2019, we have not sold any equity securities that were not registered under the Securities Act of 1933 that were not previously reported in an annual report on Form 10-K, in a quarterly report on Form 10-Q or in a current report on Form ~~8-K.~~8-K, or are listed below.

On January 14, 2019, the Company issued 100,000 shares of common stock upon the conversion of $9,746 of principal pursuant to the loan described in Note 8(e).

On January 14, 2019, the Company issued 110,742 shares of common stock upon the conversion of $10,000 of principal pursuant to the loan described in Note 8(b).

On January 28, 2019, the Company issued 200,000 shares of common stock upon the conversion of $15,552 of principal pursuant to the loan described in Note 8(e).

On February 1, 2019, the Company issued 2,859,230 shares of common stock to employees and directors of the Company in exchange for services for the Company. The shares vest over periods between 11 and 36 months. During the quarter ended March 31, 2019, the Company recorded $28,270 for the vested portion of the shares, leaving $343,430 of unvested compensation expense to be recognized in future periods

On February 7, 2019, the holder of the assigned note converted $75,000 of the note and $7,499 of interest into 1,071,418 shares of the Company’s common stock.

On February 7, 2019, the Company issued 172,414 shares of common stock upon the conversion of $12,500 of principal pursuant to the loan described in Note 8(b).

On February 11, 2019, the Company issued 317,600 shares of common stock upon the conversion of $24,697 of principal pursuant to the loan described in Note 8(e).

On February 12, 2019, the Company issued 300,000 shares of common stock upon the conversion of $21,750 of principal pursuant to the loan described in Note 8(b).

On February 14, 2019, the Company issued 1,400,000 shares of common stock upon the conversion of $140,000 principal pursuant to the convertible promissory note described in Note 8(m).

	j)	On March 7, 2019, the Company issued 576,501 shares of common stock upon the conversion of $39,375 of principal pursuant to the loan described in Note 8( c).

		The above issuances of the Company’s securities were not registered under the Securities Act and the Company relied on an exemption from registration provided by rule 506 of Regulation D promulgated under the Securities Act for such issuances.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit #		Exhibit Description
10.1		Employment agreement, dated August 1, 2018, by and between the Company and Roger Ponder

10.2		Employment agreement, dated August 1, 2018, by and between the Company and Keith Hayter

31.1		Certification of the Principal Executive ~~Officer, Principal Financial Officer and Principal Accounting~~ Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certifications of the Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certifications of the Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 SCH		XBRL Taxonomy Extension Schema Document

101 CAL		XBRL Taxonomy Calculation Linkbase Document

101 LAB		XBRL Taxonomy Labels Linkbase Document

101 PRE		XBRL Taxonomy Presentation Linkbase Document

101 DEF		XBRL Taxonomy Extension Definition Linkbase Document

~~-33-~~

SIGNATURES

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

	SPECTRUM GLOBAL SOLUTIONS, INC.

Date: ~~August~~May 15, ~~2018~~2019	By:	/s/Roger M. Ponder
		Roger M. Ponder
		Chief Executive Officer and Principal Financial Officer

~~- 34 -~~

Nevada		26-0592672
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

300 Crown Oak Centre Drive, Longwood, Florida		32750
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☐☒	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☒
Emerging growth company	☐

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock		SGSI		OTCQB

	Page Number

Condensed Consolidated balance sheets as of March 31, ~~2018 (As Restated)~~2019 (unaudited) and December 31, ~~2017~~2018	32

Condensed Consolidated statements of operations for the three months ended March 31, 2019 and 2018 (unaudited)	3

Condensed Consolidated statements of stockholder’s equity (deficit) for the three months ended March 31, 2019 and ~~2017 (As Restated) (unaudited)~~2018	4

Condensed Consolidated statements of cash flows for the three months ended March 31, ~~2018~~2019 and ~~2017 (As Restated)~~2018 (unaudited)	5

Notes to unaudited condensed consolidated financial statements	6 ~~– 27~~

	March 31,			December 31,
	2018			2017
	$			$
	(As Restated) (unaudited)
ASSETS
Current assets
Cash		285,339			28,893
Accounts receivable (net of allowance for doubtful accounts of $560,971 and $54,482, respectively)		6,432,403			1,473,377
Prepaid expenses and deposits		34,109			41,063
Total current assets		6,751,851			1,543,333
Property and equipment (net of accumulated depreciation of $1,004,164 and $999,769, respectively)		65,652			61,159
Goodwill		1,834,856			1,503,633
Customer lists (net of accumulated amortization of $90,823 and $65,269, respectively)		946,725			836,279
Tradenames (net of accumulated amortization of $59,484 and $41,600, respectively)		1,146,121			533,005
Other assets		28,918			27,931
Total assets		10,774,123			4,505,340

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities		3,784,315			2,368,652
Due to related parties		117,640			159,782
Loans payable (net of discount of $618,188 and $nil, respectively)		3,621,692			363,081
Loans payable to related parties		148,858			148,858
Convertible debentures (net of discount of $1,438,501 and $573,776, respectively)		3,842,689			1,913,224
Derivative liability		4,708,733			4,749,712
Contingent liability		-			793,893
Preferred stock liability:
Authorized: 8,000,000 Series A preferred stock, par value $0.00001 Issued and outstanding: 1,768,439 (December 31, 2017 – 1,262,945) shares		-			435,138
Total current liabilities		16,223,927			10,932,340

Mezzanine equity
Preferred stock Authorized: 8,000,000 Series A preferred stock, par value $0.00001 Issued and outstanding: 1,768,439 (December 31, 2017 – 1,262,945) shares		317,767			-

Stockholders’ deficit
Common stock Authorized: 750,000,000 shares, par value $0.00001 Issued and outstanding: 460,682,237 (December 31, 2017 – 423,027,290) shares		4,610			4,233
Additional paid-in capital		16,618,210			15,905,400
Common stock subscribed		74,742			74,742
Accumulated deficit		(22,188,456	)		(22,322,725	)
Total Spectrum Global Solutions, Inc. stockholders’ deficit		(5,173,127	)		(6,338,350	)
Non-controlling interest		(276,677	)		(88,650	)
Total stockholders’ deficit		(5,449,804	)		(6,427,000	)
Total liabilities and stockholders’ deficit		10,774,123			4,505,340

PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2832
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3237
Item 4.	Controls and Procedures	3237
PART II – OTHER INFORMATION		3338
Item 1.	Legal Proceedings	3338
Item 1A.	Risk Factors	3338
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3338
Item 3.	Defaults Upon Senior Securities	3339
Item 4.	Mine Safety Disclosures	3339
Item 5.	Other Information	3339
Item 6.	Exhibits	3339
SIGNATURES		3440

	Three Months Ended March 31,			Three Months Ended March 31,
	2018$			2017$			Three Months Ended March 31,			Three Months Ended March 31,
	(As Restated)						2019$			2018$

Revenue		4,327,764			-			11,335,732			4,327,764

Operating expenses
Cost of revenues		3,784,520			-			8,824,165			3,784,520
Depreciation and amortization		47,833			5,603			93,952			47,833
General and administrative		661,298			132,149			1,044,708			661,298
Salaries and wages		577,604			2,121			1,358,208			577,604

Total operating expenses		5,071,255			139,873			11,321,033			5,071,255

Loss from operations		(743,491	)		(139,873	)
Income (loss) from operations								14,699			(743,491	)

Other income (expense)
Gain (loss) on settlement of debt		561,963			(5,400	)
Gain on settlement of debt								164,467			561,963
Gain on extinguishment of preferred stock liability		287,815			-			–			287,815
Loss on disposal of assets		-			2,067
Amortization of discounts on convertible debentures		(654,087	)		(61,128	)
Amortization of discounts on convertible debentures and notes payable								(661,352	)		(654,087	)
Gain (loss) on change in fair value of derivatives		806,621			(627,978	)		(369,391	)		806,621
Interest expense		(179,325	)		(102,648	)		(471,412	)		(179,325	)
Impairment loss		-			(103,480	)
Total other income (expense)		822,987			(902,701	)		(1,337,688	)		822,987

Net income (loss) for the period		79,496			(1,042,574	)
Net income (loss) before income taxes								(1,322,987	)		79,496

Provision for income taxes								(9,600	)		–

Net income (loss)								(1,332,587	)		79,496

Less: net loss attributable to the non-controlling interest		54,773			23,653			–			54,773

Net income (loss) attributable to Spectrum Global Solutions, Inc.		134,269			(1,018,921	)
Net income (loss) attributable to Spectrum Global Solutions, Inc. common shareholders								(1,332,587	)		134,269

Net income (loss) per share attributable to Spectrum Global Solutions, Inc. common shareholders:
Basic		0.00			(0.01	)		(0.11	)		0.06
Diluted		0.00			(0.01	)		(0.11	)		0.03

Weighted average number of shares outstanding used in the calculation of net income (loss) attributable to Spectrum Global Solutions, Inc. per common share:
Basic		445,161,856			117,272,240			11,771,927			2,225,809
Diluted		1,685,801,264			117,272,240			11,771,927			8,429,006

	Common Stock				Additional paid-in			Common stock		Treasury		Accumulated			Non- controlling			Total stockholders’
	Number		Amount $		capital $			subscribed $		Stock $		deficit $			interest $			deficit $

Balance, December 31, 2017		2,115,136		21		15,909,612			74,742		–		(22,322,725	)		(88,650	)		(6,427,000	)

Shares issued upon conversion of convertible debt		188,274		2		526,367			–		–		–			–			526,369

Warrant issued to acquire non-controlling interest		–		–		(125,744	)		–		–		–			(133,254	)		(258,998	)

Shares issued for services		–		–		312,561			–		–		–			–			312,561

Net loss for the period		–		–		–			–		–		134,269			(54,773	)		79,496

Balance, March 31, 2018		2,303,410		23		16,622,796			74,742		–		(22,188,456	)		(276,677	)		(5,767,572	)

	Automotive		3-5 years straight-line basis
	Computer equipment and software		3-7 years straight-line basis
	Leasehold improvements		5 years straight-line basis
	Office equipment and furniture		5 years straight-line basis
	Research equipment		5 years straight-line basis

Revenue by service type	Three Months Ended March 31, 2019 $		Three Months Ended March 31, 2018 $
Professional services		5,935,226		3,366,569
Construction		5,400,506		961,195
Total		11,335,732		4,327,764

Revenue by contract duration	Three Months Ended March 31, 2019 $		Three Months Ended March 31, 2018 $
Short-term		65,430		43,278
Long-term		11,270,302		4,284,486
Total		11,335,732		4,327,764

Revenue by contract type	Three Months Ended March 31, 2019 $		Three Months Ended March 31, 2018 $
Unit-price		3,238,658		710,362
Fixed-price		2,161,848		250,833
Time-and-materials		5,935,226		3,366,569
Total		11,335,732		4,327,764

	March 31, 2018
Consolidated Balance Sheet	As Previously Reported			Effect of Restatement			As Restated
Goodwill	$	3,987,056		$	(2,152,200	)	$	1,834,856
Total Assets		12,926,323			(2,152,200	)		10,774,123
Derivative liability		7,103,644			(2,394,911	)		4,708,733
Total current liabilities		18,618,838			(2,394,911	)		16,223,927
Preferred stock – mezzanine		-			317,676			317,676
Preferred stock – par value		18			(18	)		-
Additional paid in capital		16,935,959			(317,749	)		16,618,210
Deficit Accumulated During the Development Stage		(22,431,167	)		242,711			(22,188,456	)
Total Spectrum Global Solutions, Inc. Stockholder’ Deficit	$	(5,415,838	)	$	242,711		$	(5,173,127	)
Total Stockholder’ Deficit	$	(5,692,515	)	$	242,711		$	(5,449,804	)

	For the Three Months Ended March 31, 2018
Consolidated Statement of Operations	As Previously Reported			Effect of Restatement		As Restated

Gain (loss) on change in fair value of derivatives	$	563,910		$	242,711	$	806,621
Total other income		580,276			242,711		822,987
Net Income (Loss)		(163,215	)		242,711		79,496
Net Income (Loss) Attributable to Spectrum Global Solutions, Inc.	$	(108,442	)	$	242,711	$	134,269
Net Income (Loss) Per Share – Basic and Diluted	$	(0.00	)	$	0.00	$	0.00

Purchase Price
$2,000,000 Convertible Note	$	1,663,800
Cash		2,500,000
Cash retained for 90 days		500,000
Total Purchase Price	$	4,663,800

Allocation of Purchase Price
Cash	$	191,744
Accounts receivable		5,143,749
Other assets		6,800
Tradenames		631,000
Customer lists		136,000
Accounts payable		(136,684	)
Accrued expenses		(1,627,116	)
Other current liabilities		(12,916	)
Goodwill		331,223
Net assets acquired	$	4,663,800

Provisional Purchase Consideration
$620,000 Convertible Note	$	665,000
Cash		980,000
Total Purchase Price	$	1,645,000

Preliminary Allocation of Purchase Price
Cash	$	38,407
Accounts receivable, net		65,166
Prepaid expenses		630,810
Customer lists *		1,800,000
Tradenames *		300,000
Goodwill *		670,759
Accounts payable		(275,331	)
Accrued expenses		(611,778	)
Contract liabilities		(973,033	)
Net assets acquired	$	1,645,000

	March 31, 2018 $						March 31, 2017 $
	As Reported (As Restated)			Pro Forma			As Reported			Pro Forma

Net Sales		4,327,764			7,892,535			–			4,807,214
Net Income		134,269			127,318			(1,042,574	)		(4,535,676	)

Earnings per common share:

Basic		(0.00	)		(0.00	)		(0.01	)		(0.04	)

Diluted		(0.00	)		(0.00	)		(0.01	)		(0.04	)

	March 31, 2019 $						March 31, 2018 $
	As Reported			Pro Forma			As Reported		Pro Forma

Net Sales		11,335,732			11,335,732			4,327,764		8,259,398
Net Loss		(1,332,587	)		(1,340,141	)		134,269		1,243,947

Earnings per common share:

Basic		(0.11	)		(0.11	)		0.06		0.56

Diluted		(0.11	)		(0.11	)		0.03		0.16

	March 31, 2018 $			December 31, 2017 $

Computers and office equipment		317,538			308,649
Equipment		382,139			382,140
Research equipment		143,129			143,129
Software		177,073			177,073
Vehicles		94,356			94,356
Vehicles under capital lease		–			–

Total		1,114,235			1,105,347

Less: impairment		(44,419	)		(44,419	)
Less: accumulated depreciation		(1,004,164	)		(999,769	)

Equipment, Net		65,652			61,159

	March 31, 2019 $			December 31, 2018 $

Computers and office equipment		331,987			329,937
Equipment		382,140			382,140
Research equipment		143,129			143,129
Software		227,563			177,073
Vehicles		94,356			94,356
Vehicles under capital lease		–			–

Total		1,179,175			1,126,635

Less: impairment		(44,419	)		(44,419	)
Less: accumulated depreciation		(1,027,977	)		(1,020,959	)

Equipment, Net		106,779			61,257

	Cost $		Accumulated amortization $		Impairment $		March 31, 2018 Net carrying value $		December 31, 2017 Net carrying value $

Customer relationship and lists		1,037,548		90,823		–		946,725		836,279
Trade names		1,205,605		59,484		–		1,146,121		533,005
		2,243,153		150,307		–		2,092,846		1,369,284

			$
	~~For year ending December 31, 2018~~		~~155,541~~
	For year ending December 31, 2019		~~207,387~~260,453
	For year ending December 31, 2020		~~207,387~~347,387
	For year ending December 31, 2021		~~207,387~~347,387
	For year ending December 31, 2022		~~207,387~~347,387
	For year ending December 31, 2023		~~207,387~~
	~~For year ending December 31, 2024~~		~~207,387~~
	~~For year ending December 31, 2025~~		~~191,193~~
	~~For year ending December 31, 2026~~		~~149,591~~
	~~For year ending~~ to December 31, 2027		~~92,432~~2,647,496
Total		3,950,110

	March 31, 2019		December 31, 2018
Promissory note issued to Roger Ponder, 10% interest, unsecured, matured on November 30, 2018 and extended to November 30, 2019	$	18,858	$	18,858
Promissory note issued to Keith Hayter, 10% interest, unsecured, matured on November 30, 2018 and extended to November 30, 2019		130,000		130,000
Promissory note issued to Keith Hayter, 8% interest, unsecured, matures April 10, 2019		85,000		85,000
Promissory note issued to Keith Hayter, 8% interest, unsecured, matures August 20, 2019		80,000		80,000

Total	$	313,858	$	313,858

	March 31, 2019		December 31, 2018
Promissory note issued to J. Thacker, non-interest bearing, unsecured and due on demand	$	41,361	$	41,361
Promissory note issued to S. Kahn, non-interest bearing, unsecured and due on demand	$	7,760	$	7,760
Promissory note issued to 0738856 BC Ltd, non-interest bearing, unsecured and due on demand		15,000		15,000
Promissory note issued to Bluekey Energy, non-interest bearing, unsecured and due on demand		7,500		7,500
Promissory note issued to 0738856 BC ltd non-interest bearing, unsecured and due on demand		2,636		2,636
Subscription amount due to T. Warkentin non-interest bearing, unsecured and due on demand		50,000		50,000
Promissory note issued to Old Main Capital LLC, 8% interest, unsecured and due on demand		12,000		12,000
Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand		275,000		275,000
Loan with Heritage Bank of Commerce, interest rate of prime plus 2%, secured by all assets of the Company, matures October 20, 2020, net of debt discount of $149,180 and $257,194		4,397,521		3,225,821
Loan with WaveTech Global, Inc., interest rate of 12%, matured April 28, 2019		1,325,895		-

Total	$	6,134,673	$	3,637,078

	March 31, 2019		December 31, 2018
Convertible promissory note, InterCloud Systems, Inc,, 8% interest, unsecured, matured April 27, 2018, net of debt discount of $0 and $361,333	$	1,445,625	$	1,735,000
Convertible promissory note, InterCloud Systems, Inc,, 6% interest, unsecured, matured March 27, 2019, net of debt discount of $160,782 and $286,749		1,596,542		1,565,681
Convertible promissory note, InterCloud Systems, Inc,, 1% interest, unsecured, matures August 16, 2019, net of debt discount of $109,036 and $171,557		684,858		622,392
Convertible promissory note, Barn 11, 6% interest, unsecured, matures June 1, 2019, net of debt discount of $0 and $45,000		500,000		445,000
Convertible promissory note, Dominion Capital, 18% interest, secured, matures October 23,2019, net of debt discount of $879,130 and $1,009,630		239,291		240,370
Convertible promissory note, Dominion Capital, 12% interest, unsecured, matures May 18, 2019, net of debt discount of $82,787 and $172,570		212,959		123,176
Convertible promissory note, M2B Funding, 12% interest, unsecured, matures March 15, 2019, net of debt discount of $0 and $9,087		-		69,860
Convertible promissory note, M2B Funding, 12% interest, unsecured, matures March 15, 2019, net of debt discount of $0 and $41,395		-		37,552
Convertible promissory note, Silverback, 8% interest, unsecured, matures December 4, 2019, net of debt discount of $21,656 and $24,140		5,844		3,360
Convertible promissory note, Michael Roeske, 6% interest, unsecured, matures, January 30, 2020, net of debt discount of $30,189 and $0		85,844		-
Convertible promissory note, Joel Raven, 6% interest, unsecured, matures January 30, 2020, net of debt discount of $77,155 and $0		286,845		-
Convertible promissory note, Virtual Capital, LLC, 0% interest, unsecured, matured, January 24, 2019		125,000
Convertible promissory note, RDW Capital LLC, 9.9% interest, unsecured, matured March 30, 2019, net of debt discount of $0 and $0		5,750		-

Total	$	5,188,558	$	4,842,391

	March 31, 2018			December 31, 2017
	(As Restated)
Balance at the beginning of period	$	4,749,712		$	3,760,067
Derivative issued as part of acquisition		302,800			-
Original discount limited to proceeds of notes		1,487,000			250,200
Fair value of derivative liabilities in excess of notes proceeds received		229,851			82,766
Derivative warrants issued for services and to acquire non-controlling interest		327,536			-
Derivative liability settled through the issuance of preferred stock		(358,556	)		(2,591,345	)
Conversion of derivative liability		(354,138	)		-
Change in fair value of embedded conversion option		(1,675,472	)		3,248,024
Balance at the end of the period	$	4,708,733		$	4,749,712

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)

At issuance		0-299	%		0.07-2.42	%		0	%		0.50-3.00
At December 31, 2017		259-294	%		1.39-1.89	%		0	%		0.30-2.33
At January 3, 2018 upon conversion		280	%		1.41	%		0	%		0.31
At February 6, 2018 upon conversion		331	%		1.52	%		0	%		0.22
At March 12, 2018 upon conversion		340	%		1.71	%		0	%		0.13
At March 30, 2018 upon conversion		192	%		1.63	%		0	%		0.07
At March 31, 2018		209-333	%		1.39-2.39	%		0	%		0.07-2.89

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)

At issuance		204	%		2.57	%		0	%		1.07
At December 31, 2018		172-381	%		2.45-2.63	%		0	%		0.04-2.78
At March 31, 2019		215-386	%		2.27-2.44	%		0	%		0.25-2.53

	Number of warrants		Weighted average exercise price $

Balance, December 31, 2017		83,575,000		0.03
Issued		55,427,289		0.006
Balance, March 31, 2018		139,002,289		0.02

	Number of warrants			Weighted average exercise price $

Balance, December 31, 2018		1,715,177			2.14
Issued		284,717			1.20
Expired		(60,000	)		0.32
Balance, March 31, 2019		1,939,894			1.96

Number of warrants		Exercise price $		Expiry date

	666,667		0.03	August 28, 2018
	4,075,000		0.37	April 10, 2019
	1,333,333		0.03	August 29, 2018
	27,500,000		0.03	April 28, 2020
	50,000,000		0.005	June 27, 2020
	18,427,289		0.006	February 13, 2021
	25,000,000		0.008	February 21, 2021
	12,000,000		0.0016	March 22, 2019

	139,002,289

	Number of options		Weighted average exercise price $		Weighted average remaining contractual life (years)		Aggregate intrinsic value $

Outstanding, December 31, 2017 and March 31, 2018		350,000		0.03		0.13		–
Exercisable, December 31, 2017 and March 31, 2018		350,000		0.03		0.13		–

	March 31, 2019
Operating lease assets	$	232,325

Operating lease liabilities:
Current operating lease liabilities	$	233,191
Total operating lease liabilities	$	233,191

Number of options		Exercise price $		Expiry date

	350,000		0.03	May 17, 2018
	350,000

	March 31, 2019
2019	$	173,727
2020		88,431
2021		61,372
2022		63,214
2023		21,330
2024		-
Total lease payments		408,074
Less: imputed interest		(174,883	)
Total operating lease liabilities	$	233,191