| Stockholders' Deficit | NOTE 8– STOCKHOLDERS’ DEFICIT Preferred stock The Company increased its authorized preferred
shares to 10,000,000 shares in July 2018. Series A preferred stock On April 9, 2019, the Company entered into
agreements with all holders of its Series A Convertible Preferred Stock to exchange all 4,000,000 outstanding shares of preferred
stock for an aggregate of 2,600,000 shares of restricted common stock. Upon conversion, pursuant to Section 9(i) of the Certificate
of Designation, the Series A Convertible Preferred Stock became undesignated upon their return to the Company. In July 2020, the
Company filed a Certificate of Withdrawal of the Series A designation. Series B preferred shares In August 2019, the Company designated Series
B Preferred Shares consisting of 1,700,000 shares with a par value of $0.001 and a stated value of $0.001. The Series B preferred
shares have no voting rights and are not redeemable. Each share of Series B Preferred stock is convertible into one share of common
stock at the option of the holder subject to beneficial ownership limitation. On August 16, 2019, the Company issued 1,000,000
Series B preferred shares for services rendered to the former member of Prime EFS who is considered a related party. The shares
were valued at $2.50 per shares on an as if converted basis to common shares based on recent sales of the Company’s common
stock of $2.50 per share. In connection with the issuance of these Series B Preferred shares, the Company recorded stock-based
compensation of $2,500,000. On August 16, 2019, the Company issued 700,000
shares of Series B Preferred shares upon settlement of 700,000 shares of issuable common shares (see Note 6). On July 24, 2020, the Company issued 1,000,000
shares of its common stock upon conversion of 1,000,000 shares of Series B Preferred shares. Series C preferred shares Pursuant to the August 2019 Purchase Agreement
(see Note 6), by and among the Company and the investors named therein (the “ August 2019 Investors August 2019 Reserve Requirement inter alia On June 5, 2020, the Company sold to John Mercadante,
for $100, one share of Series C Preferred Stock which has voting power equal to 51% of the number of votes eligible to vote at
any special or annual meeting of the Company’s stockholders (with the power to take action by written consent in lieu of
a stockholders meeting) for the sole purpose of amending the Company’s Amended and Restated Articles of Incorporation to
increase the number of shares of common stock that the Company is authorized to issue. Upon the effectiveness of the amendment
on July 20, 2020, the Series C Preferred Stock was automatically cancelled. The Series C Preferred Stock was not entitled to vote
on any other matter, was not entitled to dividends, was not convertible into any other security of the Company and was not entitled
to any distributions upon liquidation of the Company. Series D preferred shares In connection with Exchange Agreements (See
Note 6), the Board of Directors (the “ Board On July 20, 2020, the Board filed the Certificate
of Designation of Preferences (“COD”), Rights and Limitations of Series D Preferred Stock (the “ Series D COD Stated Value Subject to a beneficial ownership limitation
and customary adjustments for stock dividends and stock splits, each share of Series D is convertible into 1,000 shares of common
stock. A holder of Series D may not convert any shares of Series D into common stock if the holder (together with the holder’s
affiliates and any persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially
own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the conversion, as
such percentage ownership is determined in accordance with the terms of the Series D COD. However, upon notice from the holder
to the Company, the holder may decrease or increase the beneficial ownership limitation, which may not exceed 9.99% of the number
of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined
in accordance with the terms of the Series D COD, provided that any such increase or decrease in the beneficial ownership limitation
will not take effect until 61 days following notice to the Company. Approval of at least a majority of the outstanding
Series D is required to: (a) amend or repeal any provision of, or add any provision to, the Company’s Articles of Incorporation
or bylaws, or file any Certificate of Designation (however such document is named) or articles of amendment to create any class
or any series of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges
or powers, or restrictions provided for the benefit, of the Series D, regardless of whether any such action shall be by means of
amendment to the Articles of Incorporation or bylaws or by merger, consolidation or otherwise or filing any Certificate of Designation,
it being understood that the creation of a new security having rights, preferences or privileges senior to or on parity with the
Series D in a future financing will not constitute an amendment, addition, alteration, filing, waiver or repeal for these purposes;
(b) increase or decrease (other than by conversion) the authorized number of Series D; (c) issue any Series D, other than to the
Investors; or (d) without limiting any provision hereunder, whether or not prohibited by the terms of the Series D, circumvent
a right of the Series D. On July 20, 2020 and July 22, 2020, the Company
entered Exchange Agreements (See Note 6) with two Investors to exchange outstanding August 2019 Notes and August 2019 Warrants
for a newly created series of preferred stock designated the Series D Convertible Preferred Stock. Pursuant to the Exchange Agreements,
the Investors exchanged August 2019 Notes with an aggregate remaining principal amount outstanding of $500,184, accrued interest
payable of $85,827, and Warrants to purchase 423,159,293 shares of Common Stock for 522,726 shares of Series D (the “ Exchange During the period from July 1, 2020 to September
30, 2020, the Company issued 398,350,000 shares of its common stock in connection with the conversion of 398,350 shares of Series
D. The conversion ratio was 1,000 shares of common stock for each share of Series D based on the Series D COD. Common stock On June 26, 2020, stockholders holding at least
51% of the voting power of the stock of the Company entitled to vote thereon consented, in writing, to amend the Company’s
Amended and Restated Articles of Incorporation, by adoption of the Certificate of Amendment to the Amended and Restated Articles
of Incorporation of the Company to authorize an increase of the number of shares of common stock that the Company may issue to
4,000,000,000 shares, par value $0.001 (the “ Authorized Share Increase Amendment The Company filed a preliminary information
statement on Schedule 14C regarding the stockholders’ consent to the Authorized Share Increase Amendment with the SEC on
June 8, 2020. The Company filed a definitive information statement on Schedule 14C on June 30, 2020 and first mailed that information
statement to stockholders on June 30, 2020. The Authorized Share Increase Amendment became effective on July 20, 2020. Common stock issued for services On February 25, 2019, the Company granted an
aggregate of 2,670,688 shares of its common stock to an executive officer, employees and consultants of the Company for services
rendered. The shares were valued at $2,750,808, or $1.03 per share, based on the quoted trading price on the date of grant. In
connection with these shares, the Company recorded stock-based compensation of $2,750,808. On May 1, 2019, the Company granted an aggregate
of 30,000 shares of its common stock to consultants for business development and investor relations services rendered. The shares
were valued at $265,500, or $8.85 per share, based on the quoted trading price on the date of grant. In connection with these shares,
the Company recorded stock-based professional fees of $265,500. On June 14, 2019, the Company granted 200,000
shares of its common stock to an employee of the Company for services rendered. The shares were valued at $2,200,000, or $11.00
per share, based on the quoted trading price on the date of grant. In connection with these shares, the Company recorded stock-based
compensation of $2,200,000. On July 8, 2019, pursuant to a one-year consulting
agreement, the Company agreed to issue 50,000 shares of its common stock to a consultant for investor relations services to be
rendered. These shares were valued at $125,000, or $2.50 per common share, based on contemporaneous common share sales. 25,000
of these shares vested on January 8, 2020 and 25,000 shares was to vest on July 8, 2020. In connection with these shares, the Company
shall record stock-based consulting fees over the vest period of one year. Total unrecognized professional fees related to these
unvested common shares at September 30, 2019 amounted to $96,354. At September 30, 2019, the 50,000 shares were reflected as common
stock issuable on the accompanying condensed consolidated balance sheet. In April 2020, pursuant to a settlement agreement, 25,000
shares that were non-vested were cancelled. During the nine months ended September 30, 2020 and 2019, aggregate accretion of stock-based
professional fees on granted non-vested shares amounted to $36,458 and $28,646, respectively. Shares issued in connection with debt modification On April 9, 2019, the Company entered into
an agreement with Bellridge that modified its existing obligations to Bellridge. In connection with this modification, principal
balance of the Bellridge Note was reduced to $1,800,000, in exchange for the issuance to Bellridge of 800,000 shares of restricted
common stock, which shall be delivered to Bellridge, either in whole or in part, at such time or times as when the beneficial ownership
of such shares by Bellridge will not result in Bellridge’s beneficial ownership of more than the Beneficial Ownership Limitation
and such shares will be issued within three business days of the date the Bellridge has represented to the Company that it is below
the Beneficial Ownership Limitation. Such issuances will occur in increments of no fewer than the lesser of (i) 50,000 shares and
(ii) the balance of the 800,000 shares owed. The “Beneficial Ownership Limitation” shall be 4.99% of the number of
shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock
issuable pursuant to this Agreement. These 800,000 shares issued and issuable were valued at $10,248,000, or $12.81 per share,
based on the quoted trading price on the date of grant. In connection with these shares, the Company recorded a loss on debt extinguishment
of $10,248,000. In August 2019, 100,000 of these shares were issued and 700,000 shares issuable were converted into 700,000 shares
of Series B preferred shares. On April 9, 2019, the Company entered into
an agreement with Bellridge and the Placement Agent that cancelled certain warrants in exchange for an aggregate of 600,000 common
shares of the Company (360,000 shares to Bellridge and 240,000 shares to Placement Agent). These shares were valued at $7,686,000,
or $12.81 per share, based on the quoted trading price on the date of grant. In connection with these shares, the Company recorded
a loss on debt extinguishment of $7,686,000. Cancellation of common shares On May 1, 2019, the Company entered into a
Share Exchange Agreement with Save On and Steven Yariv, whereby the Company returned all of the stock of Save On to Steven Yariv
in exchange for Mr. Yariv conveying 1,000,000 shares of common stock of the Company back to the Company and the shares were cancelled.
In connection with the disposal of Save On, the Company recorded an increase in equity of $56,987 related to the amount of net
liabilities disposed of in a transaction with the former chief executive officer of the Company since the CEO is still a related
party after this transaction as he remained a principal shareholder (see Note 3). Shares issued in connection with conversion
of convertible debt and interest During the three months ended September 30,
2019, the Company issued 423,711 shares of its common stock and 423,711 warrants at an exercise price of $2.50 per share in connection
with the conversion of notes payable of $946,250 and accrued interest of $113,028. These shares were valued at $1,059,277, or $2.50
per common share, based on contemporaneous common share sales. Since the conversion price of $2.50 was equal to the fair value
of the shares as determined by recent sales of the Company’s common shares, no beneficial feature conversion was recorded. In connection with a Note Conversion Agreement
dated July 12, 2019, the Company issued 203,000 shares of its common stock at $2.50 per share for the conversion of a related party
convertible note payable of $500,000 and accrued interest payable of $7,500. In connection with the conversion of this convertible
note, the Company issued the entity warrants to purchase 203,000 shares of the Company’s common stock at an exercise price
of $1.81 per share for a period of five years. In connection with a Note Conversion Agreement
dated July 12, 2019, the Company issued 812,000 shares of its common stock at $2.50 per share for the conversion of related party
convertible note payable of $2,000,000 and accrued interest payable of $30,000. In connection with the conversion of this convertible
notes, the Company issued the entity warrants to purchase 812,000 shares of the Company’s common stock at an exercise price
of $2.50 per share for a period of five years. In connection with the modification of the
related convertible notes, the Company changed the conversion price of the notes to $2.50 per share and issued an aggregate if
1,015,000 warrants as discussed above. The Company accounted for the full conversion of these related party convertible notes pursuant
to the guidance of ASC 470-20, Debt with Conversion and Other Options. During the six months ended June 30, 2020,
the Company issued 417,863,999 shares of its common stock upon the partial conversion of a convertible note which had bifurcated
embedded conversion option derivatives including the conversion of principal and default interest balances due of $2,844,979, accrued
interest payable due of $218,600, and fees of $8,180, at the contractual conversion price. The Company accounted for the partial
conversion of these convertible notes pursuant to the guidance of ASC 470-20, Debt with Conversion and Other Options. During the three months ended September 30,
2020, the Company issued 477,682,407 shares of its common stock in connection with the conversion of convertible notes payable
and default interest of $4,215,651, accrued interest of $82,852, and fees of $900. The conversion price was based on contractual
terms of the related debt. In connection with the issuance of these shares, the Company recorded a loss on debt extinguishment
of $512,366 which is associated with the fair market value of the excess shares issued upon conversion of the principal balances
converted at the conversion price. Shares issued upon cashless exercise of
warrants During the period from June 1, 2020 to June
29, 2020, the Company issued 70,203,889 shares of its common stock in connection with the cashless exercise of warrants. The exercise
price was based on contractual terms of the related warrant. During the period from July 1, 2020 to August
10, 2020, the Company issued 85,710,419 shares of its common stock in connection with the cashless exercise of 83,662,448 warrants.
The exercise price was based on contractual terms of the related warrant. In connection with the cashless exercise of warrants,
the Company recorded a loss on debt extinguishment of $237,664 which is associated with the fair market value of the excess common
shares issued upon the cashless exercise of warrants over the number of shares issuable using the warrant exercise price. Common shares issued settlement On July 20, 2020, in connection with the parties’
recent settlement, the Company issued 10,281,018 shares to Bellridge to settle certain claims of Bellridge (see Note 9 under legal
matters). These shares were valued at $502,742, or $0.049 per share, based on the quoted trading price on the date of grant. In
connection with these shares, the Company recorded a loss on debt extinguishment of $502,742. Common shares issued conversion of Series
B preferred shares On July 24, 2020, the Company issued 1,000,000
shares to its common stock upon the conversion of 1,000,000 shares of Series B preferred shares. Common shares issued conversion of Series
D preferred shares During the three months ended September 30,
2020, the Company issued 398,350,000 shares of its common stock in connection with the conversion of 398,350 shares of Series D.
The conversion ratio was 1,000 shares of common stock for each share of Series D based on the Series D COD. Sale of common shares During the three months ended September 30,
2019, the Company issued 585,000 shares of its common stock and 585,000 five-year warrants to purchase common shares for an exercise
price of $2.50 per common share to investors for cash proceeds of $1,462,500 or $2.50 per share, pursuant to unit subscription
agreements. Stock options Stock option activities for the nine months
ended September 30, 2020 are summarized as follows:
Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value
Balance Outstanding December 31, 2019 80,000 $ 8.84 - $ -
Granted - -
Cancelled - -
Balance Outstanding September 30, 2020 80,000 $ 8.84 3.58 $ -
Exercisable, September 30, 2020 20,000 $ 8.84 3.58 $ - Warrants Warrants issued in connection with convertible
debt During the nine months ended September 30,
2020, the Company issued Q1/Q2 2020 Warrants to purchase up to 827,200 shares of the Company’s common stock (See Note 6).
The Q1/Q2 2020 Warrants are exercisable at any time on or after the date of the issuance and entitle the investors to purchase
shares of the Company’s common stock for a period of five years from the initial date the Q1/Q2 2020 Warrants become exercisable.
Under the terms of the Q1/Q2 2020 Warrants, the investors are entitled to exercise the Q1/Q2 2020 Warrants to purchase up to 827,200
shares of the Company’s common stock at an initial exercise price of $0.40, subject to adjustment as detailed in the respective
Q1/Q2 2020 Warrant. In connection with the 374,000 warrants issued in January 2020, the Company calculated the relative fair value
of these warrants in the amount of $262,872 which was added to debt discount and will be amortized over the term of the notes (see
Note 6). In connection with the 453,200 warrants issued in February, March 2020 and April 2020, the Company determined that various
terms of these Q1/Q2 2020 Notes and Q1/Q2 2020 Warrants, including the default provisions in the Q1/Q2 2020 Notes discussed in
Note 6, caused derivative treatment of the warrants. During the nine months ended September 30, 2020, on the initial measurement
dates, the fair value of the warrant derivatives of $456,858 was recorded as derivative liabilities and was allocated as a debt
discount up to the net proceeds of the Q1/Q2 2020 Notes of $456,858. The fair value of these warrants was estimated using the Binomial
valuation model with the assumptions as outlined in Note 6. Warrant price protection On August 30, 2019, pursuant to the terms of
the August 2019 Purchase Agreements with accredited investors, the Company issued August 2019 Warrants to purchase up to 987,940
shares of the Company’s common stock (See Note 6). The August 2019 Warrants are exercisable at any time on or after the date
of the issuance and entitle the investors to purchase shares of the Company’s common stock for a period of five years from
the initial date the August 2019 Warrants become exercisable. Under the terms of the August 2019 Warrants, the investors were entitled
to exercise the August 2019 Warrants to purchase up to 987,940 shares of the Company’s common stock at an initial exercise
price of $3.50, subject to adjustment as detailed in the August 2019 Warrants. On September 6, 2019, the Company sold its common
shares at $2.50 per share and accordingly, the August 2019 Warrant down-round provisions were triggered. As a result, the number
of shares issuable upon exercise of the warrants was increased by 395,176 to 1,383,116 and the exercise price was lowered to $2.50.
On January 7, 2020, the Company issued new convertible debt with an initial conversion price of $0.40 per share and warrants exercisable
at $0.40 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the number
of shares issuable upon exercise of the warrants was increased to 8,644,474 and the exercise price was lowered to $0.40. As a result
of the January 7, 2020 trigger of the down-round provisions, on January 7, 2020, the Company recorded a deemed dividend of $17,836,244
which represents the fair value transferred to the warrant holders from the down-round feature being triggered. The Company calculated
the difference between the August 2019 Warrants’ fair value on January 7, 2020, the date the down-round feature was triggered
using the current exercise price and the new exercise price and the new number of shares issuable upon exercise of the warrants.
The deemed dividend was recorded as an increase in accumulated deficit and increase in paid-in capital and increased the net loss
to common shareholders by the same amount. Subsequent to January 7, 2020, additional down-round protection was triggered. As of
September 30, 2020, the exercise price of the August 2019 Warrants was lowered to $0.006 per share, and the number of shares issuable
upon exercise of the warrants was increased. In August 2019, in connection with the sale
of common stock, the Company issued 585,000 five-year warrants to purchase common shares for an exercise price of $2.50 per common
share to investors. These warrants include down-round provisions under which the warrant exercise price could be affected by future
equity offerings undertaken by the Company. During the nine months ended September 30, 2020, down-round provisions were triggered.
As of September 30, 2020, the exercise price of these warrants was lowered to $0.006 per share. In October 2019, pursuant to the terms of the
October 3 Purchase Agreement with an accredited investor, the Company issued the October 3 Warrant to purchase up to 66,401 shares
of the Company’s common stock (See Note 6). The October 3 Warrant is exercisable at any time on or after the date of the
issuance and entitles the investor to purchase shares of the Company’s common stock for a period of five years from the initial
date the October 3 Warrant becomes exercisable. Under the terms of the October 3 Warrant, the investor is entitled to exercise
the October 3 Warrant to purchase up to 66,401 shares of the Company’s common stock at an initial exercise price of $3.51,
subject to adjustment as detailed in the October 3 Warrant. The October 3 Warrant includes a down-round provision under which the
October 3 Warrant exercise price could be affected, on a full-ratchet basis, by future equity offerings undertaken by the Company.
Subsequent to October 3, 2019, the Company issued convertible debt with a conversion price of $2.50 per share and accordingly,
the October 3 Warrant down-round provisions were triggered. As a result, the October 3 Warrant exercise price was lowered to $2.50
and the number of shares issuable upon exercise of warrants was increased to 66,667. On January 7, 2020, the Company issued new
convertible debt with an initial conversion price of $0.40 per share and warrants exercisable at $0.40 per share and accordingly,
the conversion price and warrant down-round provisions were triggered. As a result, the number of shares issuable upon exercise
of the warrants was increased to 416,669 and the exercise price was lowered to $0.40. As a result of the January 7, 2020 trigger
of the down-round provisions, on January 7, 2020, the Company recorded a deemed dividend of $859,768 which represents the fair
value transferred to the warrant holders from the down-round feature being triggered. The Company calculated the difference between
October 3 Warrant’s fair value on January 7, 2020, the date the down-round feature was triggered using the current exercise
price and the new exercise price and the new number of shares issuable upon exercise of the warrants. The deemed dividend was recorded
as an increase in accumulated deficit and increase in paid-in capital and increased the net loss to common shareholders by the
same amount. Subsequent to January 7, 2020, additional down-round protection was triggered. As of September 30, 2020, the exercise
price of the October 3 Warrant was lowered to $0.006 per share, and the number of shares issuable upon exercise of the October
3 Warrant was increased. Other As discussed in Note 6 above, the Company issued
debt that consists of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible
notes are variable based on certain factors, such as the future price of the Company’s common stock, default provisions and
payment of amortization Payments in stock. The number of shares of common stock to be issued is based on the future price of the
Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate.
Due to the fact that the number of shares of common stock issuable exceed the Company’s authorized share limit, effective
January 30, 2020, the equity environment is tainted and all convertible debentures and warrants shall be included in the value
of the derivative. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the warrants were recorded as derivative liabilities
on the issuance date. On January 30, 2020, the Company evaluated all outstanding warrants to determine whether these instruments
are tainted and, due to reasons discussed above, all warrants outstanding were considered tainted. Accordingly, the Company recorded
a reclassification from paid-in capital to derivative liabilities of $11,381,885 for warrants becoming tainted. On January 30,
2020, the fair value of the warrants to be reclassified to derivative liabilities was determined using the Binomial valuation model. Subsequent to January 30, 2020, the Company
issued shares of its common stock upon conversion of debt at price lower than $0.40. Accordingly, the exercise prices of the August
2019 Warrants and October 3 Warrant discussed above were lowered to $0.006 and the aggregate number of shares issuable upon exercise
of the warrants was increased from 9,061,143 shares to 604,076,186 shares. Since these warrants were treated as derivative liabilities,
no additional deemed dividend was recorded. During the period from June 1, 2020 to June
29, 2020, the Company issued 70,203,889 shares of its common stock in connection with the cashless exercise of 73,635,000 warrants.
The exercise price was based on contractual terms of the related debt. On June 16, 2020, the Company issued an aggregate
of 28,100,000 five-year warrants to purchase 28,100,000 shares of the Company’s common stock at an exercise price of $0.06
per share, subject to adjustment as defined in the respective warrant to two consultants for services rendered. On June 16, 2020,
the Company calculated the fair value of these warrants of $1,963,291 which was calculated using the Binomial valuation model with
the following assumptions: expected dividend rate, 0%; expected term of 5 years; volatility of 298.8% and risk-free interest rate
of 0.33%. During the nine months ended September 30, 2020, the Company recorded stock-based professional fees of $1,963,291 related
to these warrants which has been included in professional fees on the accompanying condensed consolidated statement of operations. On July 20, 2020 and July 22, 2020, the Company
entered Exchange Agreements (see Note 6) with two Investors to exchange outstanding August 2019 Notes and August 2019 Warrants
for a newly created series of preferred stock designated the Series D (See above). Pursuant to the Exchange Agreements, the Investors
exchanged August 2019 Notes with an aggregate remaining principal amount outstanding of $500,184, accrued interest payable of $85,828,
and Warrants to purchase 423,159,293 shares of Common Stock for 522,726 shares of Series D. In connection with the issuance of
these shares, the Company recorded a loss on debt extinguishment of $239,678 which is associated with the fair market value of
the excess shares issued upon conversion of the principal balances and accrued interest converted at the conversion price. Warrant activities for the nine months ended
September 30, 2020 are summarized as follows:
Number of Shares Issuable Upon Exercise of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value
Balance Outstanding December 31, 2019 3,649,861 $ 2.410 4.66 $ 311,070
Granted 28,927,200 0.070
Increase in warrants related to price protection 602,626,403 0.006
Cashless exercise of warrants for Series D preferred (423,159,293 ) 0.006
Exercised (157,297,448 ) 0.006
Balance Outstanding September 30, 2020 54,746,723 $ 0.018 4.33 $ 154,908
Exercisable, September 30, 2020 54,746,723 $ 0.018 4.33 $ 154,908 |
