We consider our common stock to be thinly traded and, accordingly, reported sales prices or quotations may not be a true market-based valuation of our common stock.

Holders

As of April 17, 2017, 2016, 32,808,909December 18, 2020, 67,744,953 shares of Common Stock were issued and outstanding, which were held by approximately 6070 holders of record. We also believe there are more owners of our common stock whose shares are held by nominees or in street name.

Dividends

We have not paid any dividends and we do not anticipate paying any cash dividends in the foreseeable future and we intend to retain all of our earnings, if any, to finance our growth and operations and to fund the expansion of our business. Payment of any dividends will be made in the discretion of our Board of Directors, after our taking into account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansion.

20162020 Amended and Restated Equity Incentive Plan

The Board of Directors and stockholders of the Company adopted the 2015 Equity Incentive Plan, which was amended and restated in 2016, 2018 and 2020, which reserves a total of 15,000,00090,000,000 shares of Common Stock for issuance under the 20162020 Plan. If an incentive award granted under the 20162020 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 20162020 Plan.

Shares issued under the 20162020 Plan through the settlement, assumption or substitution of outstanding awards or obligations to grant future awards as a condition of acquiring another entity are not expected to reduce the maximum number of shares available under the 20162020 Plan. In addition, the number of shares of common stock subject to the 20162020 Plan, any number of shares subject to any numerical limit in the 20162020 Plan, and the number of shares and terms of any incentive award are expected to be adjusted in the event of any change in our outstanding common stock by reason of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction.

Administration

It is expected that the Board will administer the 20162020 Plan. Subject to the terms of the 20162020 Plan, the Board would have complete authority and discretion to determine the terms of awards under the 20162020 Plan.

Grants

The 20162020 Plan is expected to authorize the grant to 20162020 Plan participants of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Internal Revenue Code (as amended, the “Code”) and stock appreciation rights, as described below:

Duration, Amendment, and Termination

The Board is expected to have the power to amend, suspend or terminate the 20162020 Plan without stockholder approval or ratification at any time or from time to time. Unless sooner terminated, the 20162020 Plan would terminate ten years after it is adopted.

The table below sets forth information as of December 31, 20162018 with respect to compensation plans under which our common stock or options are authorized for issuance.

Item 6. Selected Financial Data.

This item is not required for a smaller reportingan emerging growth company.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following management’s discussion and analysis should be read in conjunction with our historical financial statements and the related notes. The management’s discussion and analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Report. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Report.

As the result of the transactions of which PeerlogixPeerLogix Technologies, Inc. became a wholly-owned subsidiary of the Company and the change in business and operations of the Company from a shell company to a technology company, a discussion of our financial results prior to the Share Exchange is not pertinent, and the financial results of PeerLogix Technologies, Inc., the accounting acquirer, are considered the financial results of the Company on a historical and going-forward basis.

The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Results of Operations for the Years Endedended December 31, 20162018 and 20152017

The following table sets forth the summary income statement for the years ended December 31, 20162018 and 2015:2017:

Revenues: From inception, through December 31, 2016 the Company has generated minimal revenues.minimum revenues due to being in the development stage with regard to its technology and channel partner relationships.

Operating Expenses: Operating expenses consist primarily of compensation and related costs for personnel and facilities, and include costs related to our facilities, finance, human resources, information technology and fees for professional services. Professional services are principally comprised of outside legal, audit, information technology consulting, marketing, investor relations and outsourcing services.

Operating expenses decreasedincreased by 16%143% during the year ended December 31, 2016,2018, as compared to the year ended December 31, 2015.2017. The overall $242,364 decrease$2,841,988 increase in operating expenses is primarily attributable to the following approximate net increases (decreases) in operating expenses:

Other income (expense):expenses, net: Other income (expense)expense, net consists primarily of gains and losses on settlement of vendor liabilities, gains and losses on extinguishment of debt and interest expense primarily related to the Company’s convertible promissory notenotes and warrant issuances.notes payable and includes non-cash amortization of debt discounts of $703,544 and $1,766,925 and non-cash interest of $111,606 and $1,442,654 for the years ended December 31, 2018 and 2017, respectively.

Other income (expense)In addition, the Company incurred an aggregate of $140,022 loss on extinguishment of debt in fiscal 2018, primarily from settlement of an outstanding convertible note as compared to a loss on settlement of debt of $913,562 in fiscal 2017 primarily from note extensions.

During 2018, the Company reduced previously issued warrants exercisable at $0.10 per share to $0.06 per share as an inducement to exercise. In addition, as part of the exercise of the warrant, the holder would receive one Series B warrant (exercisable at $0.25 per share, expiring four years from issuance -see above) for every four warrants exercised. The Company accounted for the transaction under inducement accounting and accounted for the price reduction of $0.04 per share and the fair value of the Series B warrants as inducement expense in the amount of $734,273.

In 2018, the Company issued convertible notes payable with variable conversion features which included embedded derivatives. As such, the Company is required to bifurcate the fair value of the derivative and mark-to-market each reporting period. During the year ended December 31, 2018, the Company recorded a $1,547,402 loss on change in fair value of derivative liabilities as compared to a $1,741,441 gain for 2017.

Overall, other expense, net - increased by $(582,197)$1,730,190 to $(607,090)$4,745,439 during the year ended December 31, 20162018 as compared to other income (expense) of $(24,893)$3,015,249 during the year ended December 31, 2015. The increase was primarily due to the issuance of convertible notes during the third and fourth quarter of 2016 and the modification of certain investor notes and warrants.

For year ended December 31, 2016 other income (expense) consisted of $(825,861) in interest expense, a gain on extinguishment of debt of $240,368, a loss on settlement of vendor liabilities of $(21,600) and interest income of $3.

For year ended December 31, 2015 other income (expense) consisted of $(24,962) in interest expense and interest income of $69.2017.

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at December 31, 20162018 compared to December 31, 2015:2017:

As of December 31, 2016,2018, we had a working capital deficit of $935,711$6,325,645, as compared to a working capital deficit of $276,457$3,492,378 as of December 31, 2015,2017, an increase of $659,254.$2,833,267. During the year ended December 31, 20162018 we received net proceeds of $645,500$362,887 from the issuance of convertible notes payable and $130,000warrants and $670,270 from the issuanceexercise of warrants, net with repayments of $39,941 of convertible notes payable.and officer loans. The Company used the proceeds to fund operations during the current period and pay down certain debt.year. The increase in our working capital deficit is primarily attributable to our historic negative cash flow from operations resulting in our growing accounts payable, accrued liabilities and outstanding debt.

We have incurred net operating losses and operating cash flow deficits since inception, continuing through the fourth quarter of 2016.inception. We have been funded primarily by a combination of equity issuances and debt, to execute on our business plan and for working capital.Our principal source of liquidity is our cash.At December 31, 2016,2018, we had cash oftotaling approximately $56,000.$26,000. We believe our existing available cash is insufficient to enable the Company to meet the working capital requirements for the near future. Consequently, we will be required to raise additional capital to complete the development and commercialization of our current product and to fund operations.product. However, there can be no assurance that we will be able to raise additional capital on terms acceptable to us, or at all. In order to boost sales, we continue to explore potential expansion opportunities in the industry through mergers and acquisitions, enhancement of our existing products, development of new products and expansion into other international markets. We will incur increased costs as a result of being a public company, which could affect our profitability and operating results.

We are obligated to file annual, quarterly and current reports with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the rules subsequently implemented by the SEC and the Public Company Accounting Oversight Board have imposed various requirements on public companies, including requiring changes in corporate governance practices. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities of ours more time-consuming and costly. We expect to spend between $200,000 and $250,000 in legal and accounting expenses annually to comply with our reporting obligations and Sarbanes-Oxley. These costs could affect profitability and our results of operations.

Management has determined that additional capital will be required in the form of equity or debt securities. In addition, if we cannot raise additional short term capital we will be forced to continue to further accrue liabilities due to our limited cash reserves. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

Going Concern and Management’s Liquidity Plans

As reflected in the consolidated financial statements, the Company had an accumulated deficit at December 31, 2016,2018, a net loss and net cash used in operating activities for the year then ended and has generated only minimal revenues since inception. These factors indicate that there israise substantial doubt about the Company’s ability to continue as a going concern within one year from the issuance date of this report.the consolidated financial statements.

The ability of the Company to continue its operations is dependent on management’s plans, which include the raising of capital through debt and/or equity markets, with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. The Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence. There can be no assurance that the Company will be able to raise any additional capital.

The Company may also require additional funding to finance the growth of our anticipated future operations as well as to achieve its strategic objectives. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. In that event, the Company would be required to change its growth strategy and seek funding on that basis, if at all.

The Company’s plan regarding these matters is to raise additional debt and/or equity financing to allow the Company the ability to cover its current cash flow requirements and meet its obligations as they become due. There can be no assurances that financing will be available or if available, that such financing will be available under favorable terms. In the event that the Company is unable to generate adequate revenues to cover expenses and cannot obtain additional financing in the near future, the Company may seek protection under bankruptcy laws. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Financing Transactions

On January 28, 2016,The spread of a novel strain of coronavirus (COVID-19) around the Company entered into a Securities Purchase Agreement (“SPA”), Promissory Note (the “January Note”) and Registration Rights Agreement (“RRA”) (collectively, the “Transaction Documents”) with Pinewood Trading Fund, L.P. (“Pinewood”). Pursuant to the SPA, the Company issued 100,000 shares (the “Shares”) of its common stock (the “Common Stock”), in exchange for Pinewood lending $105,000 (“Funding Amount”) to the Company pursuant to the January Note with a principal amount of $131,250 (“Principal Amount”).The January Note was due on July 28, 2016 or earlierworld in the eventfirst half of 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies. The outbreak and any preventative or protective actions that governments or we may take in respect of this COVID-19 may result in a period of business disruption, reduced customer traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but may materially affect our business, financial condition, and results of operations. The extent to which the gross proceeds of any Company offering equals or exceeds $300,000.The January Note is secured by all assetsCOVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the Company.COVID-19 and the actions to contain the COVID-19 or treat its impact, among others.

As of July 28, 2016, the Company was not compliant with the repayment terms of the January Note and is in default. As of that date, the outstanding principal balance on the January Note was $131,250. On September 28, 2016, the Company andPinewoodentered into a Forbearance Agreement (“Agreement”). As an inducement to Pinewood to enter into the Agreement, the Company shall pay to the Lender a forbearance fee in the initial principal amount of $1,000, which fee shall be added to the principal balance of the Note on the last day of the Forbearance Period, December 31, 2016. Certain covenants of the Agreement require the Company to pay Pinewood the outstanding accrued interest under the Note from the first $100,000 of any equity or debt raised in connection with the Company; pay Pinewood 25% of the next $100,000 of equity or debt raised in connection with the Company and pay Pinewood 50% of any equity or debt raised in connection with the Company in excess of the $200,000 previously raised. The interest rate applicable to amounts due under the Note from July 29, 2016 through and including the date on which all obligations under the Note have been paid in full shall be 18%. During the year ended December 31, 2016, the Company paid $26,250 in principal and $6,149 in accrued interest on the Note. The Company is currently in default of the Agreement, making the entire unpaid principal and interest due and payable. In addition, Pinewood may take possession of the Collateral without notice or hearing, and sell or dispose of it. The Lender can now institute legal action to enforce its rights under the Note. As of the date of this report no defaults under the note have been called by Pinewood.

On April 8, 2016 (the “Initial Closing Date”), we entered into a Securities Purchase Agreement (the “SPA”) with Attia Investments, LLC, a related party (the “Investor”). A shareholder of the Company who owns in-excess of 5% of the Company’s common stock is the managing member of Attia Investments, LLC. Under the Agreement, the Investor agreed to purchase senior secured convertible debentures in the aggregate principal amount of up to $125,000 (together the “Debentures” and each individual issuance a “Debenture”), bearing interest at a rate of 0% per annum, with maturity on October 8, 2016, which can be extended to April 8, 2017 at the discretion of the Investor. The principal amount of the Debentures shall equal the amount funded by the Investor together with an original issue discount of 20%. The Debentures are secured by all assets of the Company. The Company is currently in default of the SPA, making the entire unpaid principal and interest due and payable. As of the date of this report no defaults under the note have been called by the Investor.

During the year ended December 31, 2016, we issued and sold to the Investor, and the Investor purchased from us, Debentures in the principal amount of $87,500 for a purchase price of $70,000.

The principal amount of the Debentures can be converted at the option of the Investor into shares of our common stock at a conversion price per share of the lower of (i) $0.05 or (ii) the price per share in an offering of securities prior to the maturity date. In order to induce Investors to invest in the Debentures, the Investors were issued 175,000 shares of Company common stock.

The Agreement provides that, the shares of Company common stock and stock options held by the CEO and former COO (the “Founders Shares”), together with medallion guaranteed stock powers relating thereto, shall be placed into an escrow account established by the Investor and shall be held pending a determination by the Board of Directors, in consultation with the Investor, of the status of the operations of the Company. Within 45 days following the Initial Closing Date the Company shall deliver to the escrow agent a written notice which shall state that the Board of Directors of the Company, in consultation and agreement with the Investor, have made one of the following determinations:

On September 27, 2016, theSPA was amended. The determination date, by the Board of Directors, in consultation with the Investor, of the status of the operations of the Company has been extended to September 22, 2017. As per the terms of the amended SPA, on October 2, 2016, 8,324,084 shares originally issued to the Company’s founders were cancelled.

Pursuant to the agreement governing the escrow (as heretofore amended, the “Escrow Agreement”), each of William Gorfein and Joshua Partridge, by William Gorfein, attorney-in-fact, agreed to cancel 4,162,042 shares of their respective shares of common stock, as a result of which each such individual shall be the record holder of 2,500,000 shares of common stock (the “Remaining Shares”). Each such individual has also agreed to cancel and return all options theretofore granted thereto. All shares cancelled shall become authorized, but unissued, shares of capital stock of the Company. As of the date of the Escrow Agreement, no options were held by Mr. Gorfein or Mr. Partridge.

In connection with such cancellation, William Gorfein and Joshua Partridge each received from the Company an agreement to indemnify them for their services as a director and officer of the Company and an agreement, among other things, releasing all claims between either such individual and the Company under certain circumstances.

On August 22, 2016, the Company issued an unsecured convertible promissory note in principal amount of $25,000 to an investor. The note bears interest at a rate of 12% per annum, with maturity on the earlier of i) September 22, 2016 and ii) an offering of securities of the Company through WestPark. On September 22, 2016, the promissory note was converted into a convertible note as part of the WestPark Offering.Financing Transactions

During the year ended December 31, 2016, the Company2018, we sold $600,500 of$425,900 Units to investors (“Offering 3”). Of the $600,500 in Units issued, $575,500 resulted from the receipt of cash and the other $25,000 resulted from the conversion of promissory notes.investors. Each Unit was sold at a price of $10,000 per Unit and consisted of one (1) six (6) month, 18% convertible promissory note (36% on an annual basis) with a face value of $10,000 (the “Notes”) and four year warrants exercisable for an aggregate number of shares of common stock equal to 50% of the shares of common stock into which the Note is initially convertible, exercisable at a price of $0.10 per share duringshare. The Offerings Notes are due six months after the four (4) year period commencing on February 15, 2017, the dateissuance of the final closing.each note, as amended.

Each of the Notes will beis convertible at an initial price equal to $0.06 per share. In addition, during the two month period commencing on the final closingeach issuance of the Offering 3 Notes, as amended, the Notes will contain a look-back provision pursuant to which the Notes will be convertible at the lower of $0.06 per share or the lowest volume weighted average price of the Company’s common stock (the “VWAP”) during any 10 day period during such two (2) month period, provided however, in the event that the VWAP during any such ten (10) day period is less than $0.06 per share, then the reset conversion price of the Notes shall be no lower than $0.03. The Notes also contain a reset provision to the same price as any future offering inover the next three (3) yearslifetime of the Notes in the event that the conversion or offering price of securities offered in such subsequent offering is less than the Conversion Price of the Notes in this Offering.

In addition, to Notwithstanding the extent that any investor that acquires Unitsforegoing, in this Offering had previously acquired securities issued byno event shall the Company or its subsidiary in one of the two prior private offerings placed by the Placement Agent (each a “Prior Offering”), which collectively raised gross proceeds of $1,510,000 (each an “Existing Investor”), the Company has agreed to provide additional consideration to each such Existing Investor as follows: (i) if the Existing Investor acquires Units in this Offering in an amount equal to fifty percent (50%) or greaterConversion Price be lower than the amount the Existing Investor invested in a Prior Offering, such Existing Investor will receive (a) an additional 7.33 shares, as amended, (if the investor invested in the first Prior offering) or 9 shares, as amended, of the Company’s common stock (if the investor invested in the second Prior Offering) (each “Incentive Shares”); and (b) the exercise price of each of the warrants purchased by the Existing Investor will be reduced from $0.60$0.03 per share (if the investor invested in the first Prior Offering) or $0.72 per share (if the investor invested in the second Prior Offering) to $0.10 per share (the “Incentive Warrant Price Reduction”); and (ii) if the Existing Investor acquires Units in this Offering in an amount equal to less than fifty percent (50%) of the amount the Existing Investor invested in a Prior Offering, such Existing Investor will receive a pro-rata number of Incentive Shares and Incentive Warrant Price Reduction on only a pro-rata portion of the warrants acquired by the Existing Investor in the Prior Offering. The Company issued investors who invested in prior offerings 9,563,332, as amended, shares of common stock and reduced the exercise price of 1,187,584 warrants as per the terms above.share.

The Company will have the ability to extend the Notes for an additional six (6) months (the “Extended Term”) and if so extended shall be referred to herein as the “Extended Notes”. The Extended Notes, upon maturity, will pay interest at a six (6) month rate of 18% (36% annualized) at the termination of the Extended Term. The Extended Notes, to the extent extended pursuant to their terms for the Extended Term, will carry an additional 50% warrant coverage (e.g. such warrant to be exercisable for an additional 50% of the number of shares into which the Extended Note is initially convertible (the “Extended Warrants”). The Extended Warrants shall be exercisable at a price equal to $0.10. The Extended Warrants will expire four (4) years from the Extended Term and shall contain customary anti-dilution rights (for stock splits, stock dividends and sales of substantially all the Company’s assets) and the shares underlying the Extended Warrants will contain registration rights.

The Company granted investors in Offering 3, 6,229,999 shares of common stock and 5,004,173 warrants through December 31, 2016.

The Company granted the placement agent 450,375 shares of common stock and 1,000,835 warrants through December 31, 2016.

On September 9, 2016, the Company sold 57,000 shares of common stock to an investor for proceeds of $2,000.

On April 13, 2017, the Company sold 166,667 shares of common stock to an investor for proceeds of $10,000.

Placement Agent and Finders Agreements

In April 2016, the Company entered into a Financial Advisory and Investment Banking Agreement with WestPark Capital, Inc. (“WestPark”) (the “WestPark Advisory Agreement”). Pursuant to the WestPark Advisory Agreement, WestPark shall act as the Company’s financial advisor and placement agent in connection with a best efforts private placement (the “Financing”) of up to $750,000 of the Company’s debt and/or equity securities (the “Securities”) initially proposed to take place between April 2016 and June 2016. On September 20, 2016, the terms of the Financing were finalized and the offering period was to take place from September 20, 2016 through October 31, 2016. Subsequent to October 31, 2016, the Financing was extended to November 25, 2016, extended to December 30, 2016 and extended to January 30, 2017. The final closing of the Financing took place on February 15, 2017.

The Company upon closing of the Financing will pay consideration to WestPark, in cash, a fee in an amount equal to 10% of the aggregate gross proceeds raised in the Financing from the sale of Securities placed by WestPark and warrants in the amount of 10% of the aggregate gross proceeds. The Company will also pay all WestPark legal fees and expenses as well as a 3% non-accountable expense allowance of the aggregate gross proceeds raised in the Financing. The Placement Agent Warrants will have: (a) a nominal exercise price of $0.001 per share, and (b) a cashless exercise provision. The shares underlying the Placement Agent Warrants will have standard piggyback registration rights.

In April 2016, the Company issued to WestPark 675,000 shares of the Company’s common stock for entering into the agreement. In addition the Company will issue 750,000 shares of the Company’s common stock for every $1,000,000 raised in the Financing on a pro-rata basis, 500,000 shares of the Company’s common stock upon $500,000 being raised in the Financing and 651,000 shares of the Company’s common stock upon $825,000 being raised in the Financing. The aforementioned shares will have standard registration rights.

Summary Cash flows for the yearyears ended December 31, 20162018 and 2015:2017:

Cash Used in Operating Activities

Our primary uses of cash from operating activities include payments to consultants for research and development, compensation and related costs, legal and professional fees, computer and internet expenses and other general corporate expenditures.

Cash used in operating activities consistin 2018 consisted of net loss adjusted for certain non-cash items primarilysuch as equity-based compensation expense loss on settlement of vendor liabilities, gain$2,606,982, fair value of warrants issued in connection with note extensions, inducement expense of $734,273, fair value of warrants for services, amortization of debt discounts of $703,544, non-cash interest of $111,606, loss on extinguishment of debt modification of investor warrants, amortization$140,022, loss on change in fair value of debt discount, and amortizationderivative liabilities of debt issuance costs during the year ended December 31, 2016,$1,547,402, as well as the effect of changes in working capital and other activities.

The adjustmentsCash Used in Investing Activities

No cash used in investing activities for the non-cash items increased from the year ended December 31, 20152018 as compared to the year ended December 31, 2016 due primarily to an increase in equity based compensation, loss of settlement of vendor liabilities, gain on extinguishment of debt, modification of investor warrants and amortization of the debt discount and debt issuance costs recorded on the notes payable entered into during the current period. In addition, the net increase in cash from changes in working capital activities from the year ended December 31, 2015 to the year ended December 31, 2016 primarily consisted of an increase in accounts payable and accrued expenses primarily due to an increase in accrued payroll and payroll related expenses, accrued accounting fees, accrued director’s fees and accrued consulting fees, business development, financial advisory services and investor relations.$37,500 for 2017.

Cash Provided by Financing Activities

Cash provided by financing activities consists primarily of net proceeds from issuance or repayments of notes payable, convertible promissory notes related party loans and proceeds fromwarrant exercises for the issuance of common stock and warrants of the Company.year ended December 31, 2018.

Cash provided by financing activities decreasedincreased from the year ended December 31, 20152017 to the year ended December 31, 2016,2018, primarily driven by a decreasean increase in proceeds from the issuance of common stockconvertible notes and warrants partiallyexercises offset by an increasethe repayment of notes payable and related party loans.

Recent Accounting Pronouncements

See Note 3 to the consolidated financial statements included elsewhere in the issuance of convertible promissory notes and promissory notes during 2016.this Filing.

Critical Accounting Policies

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“U.S. GAAP”). U.S. GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to U.S. GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies (along with new accounting pronouncements) are summarized in Note 3 of our consolidated financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

We believe the following critical accounting policies and procedures, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from these estimates. The Company’s significant estimates and assumptions include the fair value of the Company’s equity instruments, convertible debt, stock-based compensation, and the valuation allowance relating to the Company’s deferred tax assets.

Accounting for Warrants

The Company accounts for the issuance of common stock purchase warrants issued in connection with debt and equity offerings in accordance with the provisions of ASC 815, Derivative Instruments and Hedging Activities (“ASC 815”). The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

The Company assessed the classification of its common stock purchase warrants as of the date of each equity offering and determined that such instruments met the criteria for equity classification, as the settlement terms indicate that the instruments are indexed to the entity’s underlying stock.

Derivative Instrument Liability

The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At December 31, 2018 and 2017, the Company did not have any derivative instruments that were designated as hedges.

Off Balance Sheet Arrangements:

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

This item is not required for a smaller reporting company.

Item 8. Financial Statements and Supplementary Data.

Our consolidated financial statements and corresponding notes thereto called for by this item appear at the end of this document commencing on pageF-1. F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

(a) Evaluation of Disclosure and Control Procedures

Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective to ensure that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to our company, particularly during the period when this report was being prepared.

(b) Management's Report on Internal Control Over Financial Reporting

This Company’s management is responsible for establishing and maintaining internal controls over financial reporting and disclosure controls. Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive officer and principal financial officer, or persons performing similar functions, and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is appropriately recorded, processed, summarized and reported within the specified time periods.

Management has conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2016,2018, based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 (“COSO”).

Based on this assessment, management concluded that as of the period covered by this Annual Report on Form 10-K, it had material weaknesses in its internal control procedures.

As of period covered by this Annual Report on Form 10-K, we have concluded that our internal control over financial reporting was ineffective. The Company’s assessment identified certain material weaknesses which are set forth below:

Based on this assessment, management concluded that as of the period covered by this Annual Report on Form 10-K, it had material weaknesses in its ability to file timely due to limited financial and personnel resources .

Functional Controls and Segregation of Duties

Because of the Company’s limited resources, there are limited controls over information processing.Thereprocessing.

There is an inadequate segregation of duties consistent with control objectives. Our Company’s management is composed of a small number of individuals resulting in a situation where limitations on segregation of duties exist. In order to remedy this situation, we would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duty is feasible. 

Accordingly, as the result of identifying the above material weakness we have concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company’s internal controls.

Management believes that the material weaknessweaknesses set forth above arewere the result of the scale of our operations and are intrinsic to our small size. Management believes this weaknessthese weaknesses did not have a material effect on our financial results and intends to take remedial actions upon receiving funding for the Company’s business operations. The Company intends to hire additional members of upper management to traditionally segregate duties upon receiving sufficient funding to do so.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report herein.

(c) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

As of April 13, 2017,December 31, 2018, our executive officers and directors were as follows:

Ray Colwell – Interim CEO

On February 21, 2017, the Company entered into an employment agreement with Ray Colwell (“Colwell”), pursuant to which, commencing March 6, 2017, Colwell will serve as the Interim Chief Executive Officer of the Company and, commencing 90 days thereafter, shall serve as Chief Executive Officer of the Company through March 5, 2019, subject to extension as provided in the employment agreement, and be appointed to the Board of Directors.

Prior to joining PeerLogix, Colwell served as a member of successful executive teams, most recently as VP of Partner Sales at AOL responsible for $100+ million of mobile demand revenue following the AOL acquisition of Millennial Media, where he was then head of Global Business Development, and prior to the acquisition of Nexage by Millennial Media in the same capacity. Colwell has deep experience generating digital media revenue in new businesses in the digital ecosystem, including his role as Chief Revenue Officer at Adelphic, recently acquired by Time Inc., and as Chief Revenue Officer of 4INFO, as well as SVP of Sales and BD for Third Screen Media, a pioneer in the mobile ad serving space acquired by AOL in 2007.

On November 26, 2019, Colwell resigned as Chief Executive Officer (“CEO”) of PeerLogix, Inc. (the “Company”). Mr. Colwell’s resignation as the CEO was not a result of any disagreements with the Company regarding its the operations, policies or practices. On November 26, 2019 Mr. Gorfein assumed the role of CEO.

William Gorfein – PFO, Founder of PeerLogix and Director

Mr. Gorfein’s leadership has spanned multiple organizations as he has provided services to companies and clients while functioning in both information technology and financially based roles. Most recently before cofounding PeerLogix, he was the lead solutions engineer for BreezeIT, a subsidiary of Core 3 Technologies in Orange County, CA. While in this capacity, Mr. Gorfein was responsible for overseeing the budget and managing the technical and implementation requirements for the majority of datacenter equipment and architectures sold to customers from the small business to the enterprise level. With over a decade of software and hardware development experience, Mr. Gorfein has developed extensive expertise in the areas of platform development, life-cycle management and server architecture.

Previously the technical lead of two major software initiatives, Mr. Gorfein oversaw the development and implementation of content monitoring software for a rights management group based in Los Angeles, and he has worked on independent software projects relating to O.C.R. (optical character recognition) and employee time management. Mr. Gorfein has hand-picked and managed multiple development teams and has led cross continent collaborations in Egypt, India and China.

Mr. Gorfein’s is experienced in understanding the underlying macro-conditions driving enterprises to adopt Information Technology, and successfully taking advantage of these trends through foresight, creativity and resource management abilities. He received his Bachelor’s degree with a focus on Economy and Industry from the University of Arizona in Tucson, AZ.

On March 6, 2017, William Gorfein stepped down as the Company’s Chief Executive Officer and was named the Company’s Chief Strategy Officer and Principal Financial Officer. No changes were made to Mr. Gorfein’s existing employment agreement.

Timothy Askew – Director

Timothy Askew is the Founder and CEO of Corporate Rain International, the elite international sales outsourcing boutique and consulting firm.  He writes a popular weekly column for Inc. Magazine and is the author of the recently publishedThe Poetry of Small Business.  Mr. Askew is a founding member of the Inc. Business Owner's Council and sits on the board of the Darien Theatre.  He has produced for Broadway, as well appearing on Broadway as an actor.

Mr. Askew has a BA in History and an MA in Philosophy and Religion from Emory University in Atlanta, Georgia.  He also has an MA in Education from Claremont Graduate School in California.  He has served on the Small Business Advisory Council for the State of New York. Mr. Askew frequently mentors fledgling entrepreneurs in New York and nationally.

Kevin Richardson – Director

Mr. Richardson, age 48, is currently Chairman of the board of directors of SANUWAVE Health, Inc. since August 2005. Mr. Richardson founded Prides Capital LLC and Prides Capital Partners LLC in January 2004 where he is Managing Director. Prides Capital LLC and Prides Capital Partners LLC specialize in strategic block, active investing in small-cap and micro-cap public and private companies. From April 1999 until the end of 2003, Mr. Richardson was a partner at Blum Capital Partners, a $2.5 billion investment firm. Between May 1999 and September 2003, Mr. Richardson was the lead public partner on 18 investments. Prior to joining Blum Capital, Mr. Richardson was an analyst at Tudor Investment Corporation, an investment management firm.

Previously, Mr. Richardson spent four years at Fidelity Management and Research where he was the assistant portfolio manager of the Fidelity Contra Fund, a registered investment company. Mr. Richardson also managed Fidelity Airline Fund, the Fidelity Aerospace and Defense Fund, and performed research and analysis in a variety of industry sectors (computer services, business services, media, financial services, and healthcare information technology). Mr. Richardson is also a member of the board of directors of As Seen On TV, Inc., a publicly traded multichannel distributor of As Seen On TV products and Pegasus Solutions, Inc., a travel technology company and was previously a board member of Healthtronics, Inc. and QC Holdings, Inc. Mr. Richardson received an undergraduate degree from Babson College and an M.B.A. from Kenan-Flagler Business School at the University of North Carolina.

Board Committees

The Company does not intend to maintain a board of directors that is composed of a majority of “independent” directors. The Company does not expect to appoint an audit committee, nominating committee and/or compensation committee, or to adopt charters relative to each such committees as at the date of this Report, but may adopt such charters and appoint such committees in the future.

Item 11. Executive Compensation

The following table sets forth information regarding each element of compensation that was paid or awarded to the named executive officers of the Company for the periods indicated.