10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2019

or

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

For the transition period from__________ to _________

Commission File Number 333-139045

 

ENIGMA-BULWARK, LTD.

(Exact name of registrant as specified in its charter)

Nevada	46-4733512
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3415 South Sepulveda Blvd., Suite 1100-#1234, Los Angeles, CA	90034
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code:	(888) 287-9994

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 90 days.	Yes ☐ No ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)	Yes ☐ No ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	□	Accelerated filer	□
Non-accelerated filer	□	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).	☐

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

136,591,547 common shares issued and outstanding as of May 31, 2023

1

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

The Company’s unaudited interim consolidated financial statements for the nine months ended September 30, 2019, form part of this quarterly report. They are stated in United States Dollars (US$), and are prepared in accordance with United States generally accepted accounting principles.

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included thereto for the year ended December 31, 2018, on Form 10-K, as filed with the Securities and Exchange Commission on June 8, 2023.

2

ENIGMA-BULWARK, LTD.

CONSOLIDATED BALANCE SHEETS

	September 30, 2019			December 31, 2018
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	39,862		$	--
Accounts receivable		76,097			--
Prepaid expenses		6,706			--
Total current assets		122,665			--
Non-current assets
Investment in securities		1,207			2,413
Property and equipment, net		356			710
Intangible assets, net		29,966			31,166
Other assets		5,800			5,800
Total non-current assets		37,329			40,089
TOTAL ASSETS	$	159,994		$	40,089
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	1,946,477		$	1,692,746
Notes and loans payable		169,605			169,605
Notes payable, related party, net of unamortized discount		73,904			--
Notes payable, convertible		500,000			500,000
Notes payable, convertible, related party		908,985			728,985
Related party payables		1,191,276			798,261
Total current liabilities		4,790,247			3,889,597
Long-term liabilities
Notes and convertible notes payable, related party		2,443,720			2,443,720
Total long-term liabilities		2,443,720			2,443,720
Total liabilities		7,233,967			6,333,317
Stockholders’ deficit
Preferred stock, $0.001 par value, 25,000,000 shares authorized, none issued and outstanding		--			--
Common stock, $0.001 par value, 250,000,000 shares authorized, 94,937,223 and 77,382,753 issued and outstanding as of September 30, 2019, and December 31, 2018, respectively		94,937			77,382
Additional paid in capital		11,220,871			11,057,370
Subscriptions receivable		(3,710	)		(7,000	)
Accumulated deficit		(18,381,919	)		(17,418,034	)
Accumulated comprehensive income		(4,152	)		(2,946	)
Total stockholders' deficit		(7,073,973	)		(6,293,228	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	159,994		$	40,089

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

3

ENIGMA-BULWARK, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the three months ended						For the nine months ended
	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Revenue	$	106,297		$	--		$	106,297		$	--
Cost of sales		94,295			--			94,295			--
Gross profit		12,002			--			12,002			--
General and administrative expenses		439,772			147,289			806,211			451,754
Operating loss		(427,770	)		(147,289	)		(794,209	)		(451,754	)
Other expenses
Interest expense		(60,520	)		(53,080	)		(169,582	)		(152,869	)
Discount amortization		(94	)		(21,804	)		(94	)		(64,701	)
Total other expenses		(60,614	)		(74,884	)		(169,676	)		(217,570	)
Net loss		(488,384	)		(222,173	)		(963,885	)		(669,324	)
Comprehensive loss
Unrealized loss on securities		--			--			(1,206	)		(2,412	)
Net comprehensive loss		--			--			(1,206	)		(2,412	)
Net loss and comprehensive loss	$	(488,384	)	$	(222,173	)	$	(965,091	)	$	(671,736	)
Net loss per share - basic and diluted	$	(0.006	)	$	(0.003	)	$	(0.012	)	$	(0.010	)
Weighted average common shares outstanding - basic and diluted		83,790,500			69,382,753			79,221,627			69,382,753

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

4

ENIGMA-BULWARK, LTD.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

(UNAUDITED)

	For the nine months ended September 30, 2018
	Common Stock			Additional		Subscriptions		Accumulated			Accumulated Other Comprehensive
	Shares	Amount		Paid In Capital		Receivable		Deficit			Income (Loss)			Total
Equity Balance, December 31, 2017	69,382,753	$	69,382	$	11,025,120	$	--	$	(18,511,900	)	$	(534	)	$	(7,417,932	)
Net loss									(221,777	)		(2,412	)		(224,189	)
Equity Balance, March 31, 2018	69,382,753		69,382		11,025,120		--		(18,733,677	)		(2,946	)		(7,642,121	)
Net loss									(225,374	)		--			(225,374	)
Equity Balance, June 30, 2018	69,382,753		69,382		11,025,120		--		(18,959,051	)		(2,946	)		(7,867,495	)
Net loss									(222,173	)		--			(222,173	)
Equity Balance, September 30, 2018	69,382,753	$	69,382	$	11,025,120	$	--	$	(19,181,224	)	$	(2,946	)	$	(8,089,668	)

	For the nine months ended September 30, 2019
	Common Stock			Additional		Subscriptions			Accumulated			Accumulated Other Comprehensive
	Shares	Amount		Paid In Capital		Receivable			Deficit			Income (Loss)			Total
Equity Balance, December 31, 2018	77,382,753	$	77,382	$	11,057,370	$	(7,000	)	$	(17,418,034	)	$	(2,946	)	$	(6,293,228	)
Amortization of restricted stock award					750											750
Net loss										(209,169	)		(1,206	)		(210,375	)
Equity Balance, March 31, 2019	77,382,753		77,382		11,058,120		(7,000	)		(17,627,203	)		(4,152	)		(6,502,853	)
Amortization of restricted stock award					750											750
Amortization of stock options					4,652											4,652
Net loss										(266,332	)					(266,332	)
Equity Balance, June 30, 2019	77,382,753		77,382		11,063,522		(7,000	)		(17,893,535	)		(4,152	)		(6,763,783	)
Grant of stock award for services-officers/directors	13,544,000		13,544		121,896		(210	)								135,230
Exercise of stock options-officers/directors	4,010,470		4,011		16,042											20,053
Amortization of restricted stock award					750											750
Amortization of stock options					18,661											18,661
Subscriptions received							3,500									3,500
Net loss										(488,384	)					(488,384	)
Equity Balance, September 30, 2019	94,937,223	$	94,937	$	11,220,871	$	(3,710	)	$	(18,381,919	)	$	(4,152	)	$	(7,073,973	)

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

5

ENIGMA-BULWARK, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the nine months ended
	September 30, 2019			September 30, 2018
Cash flow from operating activities:
Net loss and comprehensive loss	$	(965,091	)	$	(671,736	)
Comprehensive loss		(1,206	)		(2,412	)
Net loss		(963,885	)		(669,324	)
Adjustments to reconcile net loss to net cash used by operating activities:
Stock compensation/amortization of deferred compensation		147,459			--
Accruals converted to related party loans		205,000			359,676
Depreciation and amortization		1,554			354
Discount amortization		94			64,701
Changes in operating assets and liabilities:
Increase in accounts receivable		(76,097	)		--
Increase in prepaid expenses		(6,706	)		--
Increase in accounts payable and accrued expenses		252,541			191,414
Increase in related party payables		393,015			53,179
Net cash used by operating activities		(47,025	)		--
Cash flow from financing activities:
Proceeds from related party promissory notes		50,000			--
Proceeds from issuance of common stock		36,887			--
Net cash provided by financing activities		86,887			--
Net increase in cash		39,862			--
Cash - beginning of period		--			--
Cash - end of period	$	39,862		$	--
NONCASH ACTIVITIES
Imputed interest on related party promissory note	$	1,190		$	--
Conversion of related party payable to related party convertible promissory note	$	205,000		$	359,676
Conversion of convertible note payable to related party convertible note payable	$	--		$	188,755
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	13,912		$	--
Income taxes paid	$	--		$	--

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

6

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

NOTE 1. OVERVIEW AND NATURE OF BUSINESS

The accompanying unaudited consolidated financial statements of Enigma-Bulwark, Ltd., (the “Company” or “Enigma”) have been prepared in accordance with generally accepted accounting principles.  The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2018. Notes to the consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements have been omitted.

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

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

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

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

As of September 30, 2019, the Company was structured with four wholly-owned subsidiaries: Enigma-Bulwark Risk Management, Inc., a Delaware corporation, and PearTrack Systems Group, Ltd. (“PTSG”), Ecologic Products, Inc. (“EPI”), and Ecologic Car Rentals, Inc. (“ECR”), all Nevada corporations.  The Company’s current business activities are diversified into two specific markets: security and risk management, and remote/mobile asset tracking products.

The Company intends to provide a unique solution to security issues in the intermodal shipping container marketplace, with its patented container tracking and locking system, EnigmaLok (formerly PearLoxx), the rights of which were licensed to the Company in perpetuity in 2015.

Through the subsidiaries, Ecologic Car Rentals, Inc. and Ecologic Products, Inc., the Company continues its pursuits for strategic opportunities for its shareholders, as management believes that the brands have value for companies with environmentally-friendly consumer-related products and services.

Going Concern

The Company has incurred losses since inception resulting in a current period net loss of $965,091, an accumulated deficit of $18,381,919, and a working capital deficit of $4,667,582 as of September 30, 2019, and further losses are anticipated. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, which may not be available at commercially reasonable terms.  There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations and the Company may cease operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

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

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

The Company’s fiscal year end is December 31.

7

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Use of Estimates

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

Fair Value Hierarchy

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

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

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

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

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

Fair Value of Financial Instruments

As of September 30, 2019, and December 31, 2018, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, investments in securities, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation.

Cash and Cash Equivalents

The Company considers cash in banks, deposits in transit, and highly-liquid debt instruments purchased with original maturities of three months or less to be cash and cash equivalents. As of September 30, 2019, and December 31, 2018, the Company had no cash equivalents.

Accounts Receivable

Accounts receivable are stated net of an allowance for doubtful accounts. The accounts receivable balance primarily includes amounts from customers of the Company’s security services.  Charges to bad debt are based on both historical write-offs and specifically identified receivables. As of September 30, 2019 and December 31, 2018, no allowance for doubtful accounts was established.

Investments in Securities

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

8

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

Property and Equipment

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

Intangible Assets

Product processes, patents and customer lists are amortized on a straight-line basis over their estimated useful lives between 4 to 20 years.  Application development stage costs for significant internally developed software projects are capitalized and amortized on a straight-line basis over the useful life, between 2 to 5 years.  Costs to extend and maintain patents and trademarks are charged directly to expense as incurred.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.  When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.  Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

Due to the Company’s recurring losses and lack of revenue from its intellectual properties, its intellectual properties were evaluated for impairment, and it was determined that expected future cash flows were sufficient for recoverability of the assets at September 30, 2019, and December 31, 2018.

Convertible Debt

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

Revenue Recognition

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

The Company’s revenue is generated from limited customer contracts for its security services operations.  As of September 30, 2019, the Company has not generated revenues from the commercialization of its intellectual properties.

Income Taxes

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

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

As of September 30, 2019, the Company had not yet filed its 2013 through 2018 annual corporate income tax returns, which were filed in April 2022.  Due to the Company’s recurring losses, no corporate income taxes are due for these periods.

Net Income (Loss) Per Common Share

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

Other Comprehensive Income (Loss)

Other comprehensive income includes unrealized gains and losses on securities available for sale, and unrealized gains and losses resulting from foreign exchange differences.  During the nine months ended September 30, 2019 and 2018, respectively, other comprehensive losses of $1,206 and $2,412 have been recognized.  As of September 30, 2019 and 2018, respectively, other comprehensive losses of $4,152 and $2,946 has been accumulated.

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ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

The following represents the accumulated comprehensive income activity:

	Unrealized Foreign Currency Exchange		Unrealized Securities Gains (Losses)			Total Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2017	$	6,703	$	(7,237	)	$	(534	)
Gain (loss)		--		(2,412	)		(2,412	)
Balance, September 30, 2018	$	6,703	$	(9,649	)	$	(2,946	)
Balance, December 31, 2018	$	6,703	$	(9,649	)	$	(2,946	)
Gain (loss)		--		(1,206	)		(1,206	)
Balance, September 30, 2019	$	6,703	$	(10,855	)	$	(4,152	)

Stock Based Compensation

The Company records stock-based 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. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Recent Accounting Pronouncements

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

Adopted:

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10: Recognition and Measurement of Financial Assets and Financial Liabilities). The new guidance is intended to improve the recognition, measurement, presentation and disclosure of financial instruments. Among other changes, there will no longer be an available-for-sale classification for which changes in fair value are currently reported in other comprehensive income for equity securities with readily determinable fair values. Equity investments with readily determinable fair values will be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for the Company beginning January 1, 2018, with early adoption not permitted.  

In February 2016, the FASB issued ASU No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU is effective for the Company beginning January 1, 2019, with early adoption permitted.

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

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory.  ASU 2016-16 improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory.  As part of the Board’s initiative to reduce complexity in accounting standards.  The amendments in this update are effective for the Company for annual reporting periods beginning after December 15, 2017, and interim periods.  Early adoption is permitted for interim or annual reporting periods for which financial statements have not been issued or made available for issuance.

In October 2016, the FASB issued ASU No. 2016-17, Consolidation (Topic 810), Interests Held through Related Parties That Are Under Common Control.  ASU 2016-17 amends the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity.  The amendments in this update are effective for the Company for fiscal years beginning after December 15, 2016, and interim periods.  Early adoption is permitted.

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

10

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

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

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

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

In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting.  ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company for annual periods beginning after December 15, 2018, and interim periods.  Early adoption is permitted.

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

Not Yet Adopted:

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

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

In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.  The amendments to Topic 326 and other Topics in ASU 2019-04 clarify or address stakeholders’ specific issues about certain aspects of the amendments in Update 2016-13. The amendments to Topic 815 in ASU 2019-04 include items related to Update 2017- 12 and clarify certain aspects of Topic 815. The amendments to Topic 321 and other Topics in ASU 2019-04 relate to the amendments in Update 2016-01 and clarify certain aspects of the amendments in Update 2016-01. ASU 2019-04 is effective for the Company for annual periods beginning after December 15, 2019, and interim periods.  Early adoption is permitted.  The Company is currently evaluating the impact of the application of this accounting standard update on its consolidated financial statements and related disclosures.

Recently Issued Accounting Standards Updates: 

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

11

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

NOTE 3. INVESTMENT IN SECURITIES

As of September 30, 2019, and December 31, 2018, the Company held 12,061,854 shares of Amazonas Florestal, Ltd. (OTC: AZFL) common stock. The securities are classified as Level 1 investments (Note 2, Fair Value Hierarchy), and are valued using the quoted market prices. During the nine months ended September 30, 2019 and 2018, respectively, $1,206 and $2,412 in unrealized losses were recognized and included as part of comprehensive income (loss).  As of September 30, 2019, and December 31, 2018, respectively, $10,855 and $9,649 in cumulative unrealized losses were recognized, and the securities held a fair value of $1,207 and $2,413.

NOTE 4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	September 30, 2019			December 31, 2018
Office equipment	$	2,362		$	2,362
Accumulated depreciation		(2,006	)		(1,652	)
Property and equipment, net	$	356		$	710

During the nine months ended September 30, 2019 and 2018, respectively, $354 and $354 in depreciation was expensed.

NOTE 5.  INTANGIBLE ASSETS

Intangible assets consists of the following:

	September 30, 2019			December 31, 2018
Intellectual property	$	31,500		$	31,500
Accumulated amortization		(1,534	)		(334	)
Intellectual property, net	$	29,966		$	31,166

During the nine months ended September 30, 2019 and 2018, respectively, $1,200 and $0 in amortization was expensed.

NOTE 6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of:

	September 30, 2019		December 31, 2018
Accounts payable-vendors	$	774,766	$	713,581
Accrued payroll and taxes		110,995		80,995
Accrued interest		1,049,108		897,391
Sales tax payable		10,829		--
Other liabilities		779		779
Total accounts payable and accrued expenses	$	1,946,477	$	1,692,746

NOTE 7. NOTES AND LOANS PAYABLE

Notes and loans payable consists of the following:

	September 30, 2019		December 31, 2018
Loans payable	$	44,605	$	44,605
Notes payable, short term		125,000		125,000
Total notes and loans payable		169,605		169,605
Notes payable, short-term, convertible		500,000		500,000
Total	$	669,605	$	669,605

Notes payable includes the following convertible promissory notes at September 30, 2019, and December 31, 2018:

Description	Principal		Interest Rate (%)	Conversion Rate	Maturity Date
Matrix Advisors, Inc.	$	500,000	5	$0.25	12/31/2015	[1]
Total convertible notes payable	$	500,000

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

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, interest in the amount of $38,893 and $60,797 was expensed; and $0 and $68,726 was reclassified to related party interest. As of September 30, 2019, and December 31, 2018, respectively, interest in the amount of $389,959 and $351,066 has been accrued and is included as part of accrued expenses on the accompanying consolidated balance sheets.

12

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

NOTE 8. RELATED PARTY TRANSACTIONS

Related party transactions consists of the following:

	September 30, 2019		December 31, 2018
Notes payable, short term, net of discount	$	73,904	$	--
Notes payable, convertible, short-term		908,985		728,985
Notes payable, convertible, long-term		2,443,720		2,443,720
Total notes payable		3,426,609		3,172,705
Accrued compensation		1,038,876		645,555
Reimbursable expenses/cash advances payable		152,400		152,706
Total related party payable		1,191,276		798,261
Total related party transactions	$	4,617,885	$	3,970,966

Related party notes payable consists of the following convertible notes payable at September 30, 2019, and December 31, 2018:

Description	Principal		Interest Rate (%)	Conversion Rate	Maturity Date
Short-term:
Huntington Chase Financial Group	$	413,913	7	$0.05	1 year from demand	[1]
Huntington Chase LLC		220,000	5	$0.05	12/31/2023
William Nesbitt		86,317	5	$0.05	Funding	[2]
Kasper Group, Ltd.		188,755	7	$0.05	1 year from demand	[1]
Total short-term		908,985
Long-term:
Huntington Chase Financial Group		1,103,000	5	$0.05	12/31/2021
E. William Withrow Jr.		894,256	5	$0.05	12/31/2021
John Macey		426,464	4	$0.25	12/31/2023
Total long-term		2,423,720
Total convertible notes payable	$	3,352,705

[1] No demand has been made

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

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

As of September 30, 2019, and December 31, 2018, respectively, affiliates and related parties are due a total of $4,617,885 and $3,970,966, which is comprised of promissory notes to related parties, net of unamortized discounts of $1,096 and $0, in the amount of $3,426,609 and $3,172,705; accrued compensation in the amount of $1,038,876 and $645,555; and reimbursable expenses/cash advances to the Company in the amount of $152,400 and $152,706; for a net increase (decrease) of $646,919 and ($1,182,536). During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, promissory notes to related parties increased (decreased) by $255,000 and $($1,391,569), unamortized discounts increased (decreased) by $1,096 and ($81,469), accrued compensation increased by $393,321 and $127,564, and reimbursable expenses cash advances decreased by $306 and $0.

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, promissory notes to related parties, net of unamortized discounts, increased (decreased) by $253,904 and ($1,310,100), as a result of an increase in accrued compensation owed to related parties in the amount of $205,000 and $419,676 converted to convertible promissory notes; $50,000 and $0 in cash loans to the Company; $0 and $188,755 reclassified from non-related party promissory notes; $0 and $2,000,000 in secured promissory notes canceled; and an increase (decrease) in unamortized discount in the amount of $1,096 and $81,469.

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, $598,321 and $548,240 in related party compensation was accrued, of which $205,000 and $419,676 was converted into convertible promissory notes; and $0 and $1,000 was paid; for a net increase in accrued compensation in the amount of $393,321 and $127,564.

13

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, reimbursable expenses/cash advances owed to related parties decreased by $306 and $0 as a result of an increase in cash loans to the Company and expenses paid by related parties on behalf of the Company in the amount of $3,281 and $0; and repayments to related parties in the amount of $3,587 and $0.

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, $130,690 and $215,096 in interest on related party loans was expensed; and $13,912 and $0 was paid to the note holder. As of September 30, 2019, and December 31, 2018, respectively, $663,103 and $546,325 in interest on related party loans has been accrued, and is included as part of accrued expenses on the accompanying consolidated balance sheets.

Agreements

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

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

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

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

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

Stock Issuances

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

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

14

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

NOTE 9. CAPITAL STOCK

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

On August 29, 2019, in connection with certain consultants’ agreements, the Company issued 13,334,000 shares of its restricted Common Stock, valued at $133,340, at $0.001 per share, for cash in the amount of $13,334, plus 210,000 shares under the agreements’ non-dilution provision, valued at $2,100, at $0.001 per share, for cash in the amount of $210.  As a result, $121,896 was recorded as additional paid in capital.

On September 20, 2019, in connection with the exercise of certain stock options, the Company issued 4,010,470 shares of its restricted Common Stock to related parties at an exercise price of $0.005, for cash in the amount of $20,052. As a result, $16,042 was recorded to additional paid in capital.

As of September 30, 2019, and December 31, 2018, respectively, the Company had 94,937,223 and 77,382,753 shares of Common Stock issued and outstanding.

NOTE 10. STOCK OPTIONS AND AWARDS

Stock Options

As of September 30, 2019, and December 31, 2018, the Company had 7,467,163 and 602,500 stock options issued and outstanding.

On May 15, 2019, in connection with certain consulting agreements, the Company granted 9,625,133 options to purchase shares of its Common Stock, valued at $55,825 using the Black-Scholes method, at an exercise price of $0.005 per share.  The options are exercisable for a period of five (5) years, of which 50% vest when certain performance goals are met, and the remainder vest when certain funding goals are met. .The assumptions used in valuing the options were: expected term 4.00 years, expected volatility 38.58%, risk free interest rate 2.15%, and dividend yield 0%.

On September 1, 2019, in connection with a certain consulting agreement, the Company granted 1,250,000 options to purchase shares of its Common Stock, valued at $625 using the Black-Scholes method, at an exercise price of $0.05 per share.  The options are exercisable for a period of five (5) years, and vest periodically over a period of thirty-six (36) months. The assumptions used in valuing the options were: expected term 5.75 years, expected volatility 41.3%, risk free interest rate 1.84%, and dividend yield 0%.

Outstanding and Exercisable Options
		Remaining	Exercise Price
	Number of	Contractual Life	times Number		Weighted Average
Exercise Price	Shares	(in years)	of Shares		Exercise Price
$0.005	5,614,663	4.85	$	28,073		$0.16
$0.05	1,250,000	4.90		62,500		$0.04
$0.10	500,000	4.30		50,000		$0.63
$3.20	102,500	1.55		328,000		$3.20
	7,467,163		$	468,573		$1.20

Options Activity	Number		Weighted Average
	of Shares		Exercise Price
Outstanding at December 31, 2018	602,500			$2.34
Granted	10,875,133			$0.20
Exercised	(4,010,470	)		($0.16)
Expired / Cancelled	--			--
Outstanding at September 30, 2019	7,467,163			$1.20

During the nine months ended September 30, 2019, and the year ended December 31, 2018, 10,875,133 and 500,000 stock options were granted, for which $56,450 and $0 in deferred stock option compensation was recorded, and $23,313 and $0 was expensed. There remained $33,137 and $0 deferred stock option compensation at September 30, 2019, and December 31, 2018, to be expensed over the next thirty-three (33) months.

15

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

Restricted Stock Awards

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, 0 and 1,000,000 restricted stock awards were granted, valued at $0 and $9,000, net of cost in the amount of $0 and $1,000; and 250,000 and 83,333 restricted stock awards vested, for which $2,250 and $750 in deferred stock compensation was expensed. As of September 30, 2019, and December 31, 2018, respectively, 666,667 and 916,667 shares remain to be vested, and $6,000 and $8,250 deferred stock compensation remains to be expensed over the next twenty-four (24) months.

Restricted Stock Awards Activity	Number		Deferred
	of Shares		Compensation
Outstanding at December 31, 2018	916,667		$	8,250
Granted	--			--
Vested	(250,000	)		(2,250	)
Forfeited/Canceled	--			--
Outstanding at September 30, 2019	666,667		$	6,000

NOTE 11. SEGMENT REPORTING

The Company currently operates with two (2) business segments: Security Services and Corporate/Intellectual Property.  The following table is a reconciliation of the Company’s business segments to the consolidated financial statements:

	Security Services [1]			Corporate/ Intellectual Property			Consolidated Totals
September 30, 2019
Revenue	$	106,297		$	--		$	106,297
Gross profit		12,002			--			12,002
Operating loss		(4,996	)		(789,213	)		(794,209	)
Depreciation and amortization		--			1,554			1,554
Interest expense		3,952			165,630			169,582
Discount amortization		--			94			94
Unrealized losses		--			(1,206	)		(1,206	)
Total assets		104,584			55,410			159,994
September 30, 2018
Revenue	$	--		$	--		$	--
Gross profit		--			--			--
Operating loss		--			(451,754	)		(451,754	)
Depreciation and amortization		--			354			354
Interest expense		--			152,869			152,869
Discount amortization		--			64,701			64,701
Unrealized losses		--			(2,412	)		(2,412	)
Total assets		--			9,041			9,041

[1] Security Services Segment commenced August 2019.

NOTE 12. SUBSEQUENT EVENTS

The Company has evaluated the events and transactions for recognition or disclosure subsequent to September 30, 2019, and has determined that there have been no events that would require disclosure, with the exception of the following:

During the period October 1, 2019, to December 31, 2022, the Company increased its loans from related parties by $1,386,983, from a total of $4,617,885 at September 30, 2019, to $6,004,868 at December 31, 2022. The increase represents (a) an increase in promissory notes in the amount of $2,062,562, as a result of (i) $110,995 reclassified from non-related party transactions, (ii) $426,464 reclassified to non-related party transactions, (iii) $3,764,845 converted from accrued compensation, (iv) an increase in discounts resulting from beneficial conversion features of $1,051,304, (v) a decrease in unamortized discount of $741,522, (vi) payments to the Company in the amount of $4,500 for stock award payments, (vii) $521,557 converted to common stock, and (viii) payments to related parties in the amount of $549,975; (b) a decrease in accrued compensation of $560,153 as a result of (i) $3,321,164 in accrued compensation, of which $3,764,845 was converted into promissory notes, (ii) $55,000 in accrued compensation reclassified to non-related party transactions, (iii) payments to the Company in the amount of $5,500 for related party stock awards, and (iv) payments to related parties in the amount of $55,972; and (c) a decrease in reimbursable expenses and cash advances to the Company of $115,426. All outstanding related party promissory notes bear interest at a rate of 5 to 7 percent per annum, are due and payable between one (1) year of written demand and December 31, 2024, or upon certain equity funding, and are convertible into the Company’s common stock at a price of between $0.05 to $0.25 per share, or the 20-day average trading price.

16

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019, AND DECEMBER 31, 2018

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

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

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

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

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

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

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

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

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

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

Management Changes:

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

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

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

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

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

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

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

.

*       *       *       *       *

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

Forward-Looking Statements

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

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

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

Corporate History

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

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

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

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

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

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

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

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

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

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

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

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

COVID-19 Pandemic

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

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

Current Business

The Company is currently structured with four wholly-owned subsidiaries: Enigma-Bulwark Risk Management, Inc., a Delaware corporation (“EBRM”), and PearTrack Systems Group, Ltd. (“PTSG”), Ecologic Products, Inc. (“EPI”), and Ecologic Car Rentals, Inc. (“ECR”), all Nevada corporations.  The Company’s current business activities are diversified into two specific markets: security and risk management, and remote/mobile asset tracking products.

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

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

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

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

The Company also intends to provide a unique solution to security issues in the intermodal shipping container marketplace, with its patented container tracking and locking system, EnigmaLok (formerly PearLoxx), the rights of which were licensed to the Company in perpetuity in 2015.

Through the subsidiaries, Ecologic Car Rentals, Inc. and Ecologic Products, Inc., the Company continues its pursuits for strategic opportunities for its shareholders, as management believes that the brands have value for companies with environmentally-friendly consumer-related products and services.

Management

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

Enigma’s team is at the core of its value, with decades of intelligence and military experience, as well as technology expertise and specialized experience in:

·advanced training techniques 

·new and innovative technology applications 

·intelligence and reconnaissance 

·risk assessment and threat identification.  

The Enigma team includes individuals with backgrounds from U.S. and South African Special Forces and military intelligence, and applies its experience to deliver measured and effective security management, regardless of adversary or operating environment. Additionally, Enigma is sensitive and experienced at managing low-profile, security operations in challenging environments.

The Company works with a core management team to remain flexible during times of non-engagement. With over forty years of professional military service, the Enigma team has established a large network of security professionals that can be deployed on a global basis. The Company will continue to identify diverse and skilled security personnel, and develop innovative solutions across the full spectrum of security needs.

The following summary of the Company’s financial condition and results of operations should be read in conjunction with the Company’s unaudited consolidated financial statements for the nine months ending September 30, 2019, which are included herein. The financial information of Enigma-Bulwark, Ltd., and its wholly-owned subsidiaries as of September 30, 2019, Enigma-Bulwark Risk Management, Inc., PearTrack Systems Group, Ltd., Ecologic Car Rentals, Inc. and Ecologic Products, Inc. is provided below on a consolidated basis, unless otherwise indicated. All significant intercompany accounts and transactions have been eliminated.

Balance Sheet

As of September 30, 2019, the Company had total assets of $159,994 compared with total assets of $40,089 at December 31, 2018. The increase in total assets of $119,905 is attributable to an increase in cash of $39,862, an increase in accounts receivable of $76,097, an increase in prepaid expenses of $6,706, a decrease in investment in securities of $1,206, depreciation of $354, and amortization of $1,200.

As of September 30, 2019, the Company had total liabilities of $7,233,967 compared with total liabilities of $6,333,317 at December 31, 2018. The increase in total liabilities of $900,650 is attributable to an increase in accounts payable and accrued expenses of $253,731, an increase in related party payables of $393,015, an increase in related party notes payable, net of unamortized discount, of $73,904, and an increase in related party convertible notes payable of $180,000.

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Results of Operations

Three and nine months ended September 30, 2019, compared to three and nine months ended September 30, 2018.

	For the three months ended						For the nine months ended
	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Revenue	$	106,297		$	––		$	106,297		$	––
Cost of sales	$	94,295		$	––		$	94,295		$	––
Gross profit	$	12,002		$	––		$	12,002		$	––
General and administrative expenses	$	439,772		$	147,289		$	806,211		$	451,754
Operating loss	$	(427,770	)	$	(147,289	)	$	(794,209	)	$	(451,754	)
Interest expense	$	(60,520	)	$	(53,080	)	$	(169,582	)	$	(152,869	)
Discount amortization	$	(94	)	$	(21,804	)	$	(94	)	$	(64,701	)
Net loss	$	(488,384	)	$	(222,173	)	$	(963,885	)	$	(669,324	)
Net comprehensive loss	$	––		$	––		$	(1,206	)	$	(2,412	)
Net loss and comprehensive loss	$	(488,384	)	$	(222,173	)	$	(965,091	)	$	(671,736	)

Revenue

For the three months ended September 30, 2019, revenue in the amount of $106,297 consisted of sales resulting from the Company’s security services activities, which commenced in August 2019.

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

For the nine months ended September 30, 2019, revenue in the amount of $106,297 consisted of sales resulting from the Company’s security services activities, which commenced in August 2019.

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

At September 30, 2019, the Company had not yet generated revenues from the commercialization of its intellectual properties.

Cost of sales

For the three months ended September 30, 2019, cost of sales in the amount of $94,295 consisted of staffing and related labor costs resulting from the Company’s security services activities, which commenced in August 2019.

For the three months ended September 30, 2018, no cost of sales was incurred.

For the nine months ended September 30, 2019, cost of sales in the amount of $94,295 consisted of staffing and related labor costs resulting from the Company’s security services activities, which commenced in August 2019.

For the nine months ended September 30, 2018, no cost of sales was incurred.

At September 30, 2019, the Company had not yet incurred costs related to revenues from the commercialization of its intellectual properties.

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General and Administrative Expenses

	For the three months ended				For the nine months ended					Variances
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018			3-month		9-month
Legal and accounting fees	$	4,000	$	4,000	$	12,000	$	12,000		$	––	$	––
Management fees		276,195		143,009		627,131		439,855			133,186		187,276
Other staff and outside services		1,301		––		1,301		––			1,301		1,301
Stock compensation/amortization of deferred compensation		141,307		––		147,459		––			141,307		147,459
Depreciation and amortization		518		118		1,554		354			400		1,200
Office supplies and miscellaneous expenses		16,451		162		16,766		(455	)		16,289		17,221
Total general and administrative expenses	$	439,772	$	147,289	$	806,211	$	451,754		$	292,483	$	354,457

General and administrative expenses in the amount of $439,772 for the three months ended September 30, 2019, were comprised of $4,000 of legal and accounting fees, $276,195 of management fees, $1,301 of other staff and outside services, $141,307 of stock compensation/amortization of deferred compensation, $518 of depreciation and amortization, and $16,451 of office overhead and other general and administrative expenses.

General and administrative expenses in the amount of $147,289 for the three months ended September 30, 2018, were comprised of $4,000 of legal and accounting fees, $143,009 of management fees, $118 of depreciation, and $162 of office overhead and other general and administrative expenses.

General and administrative expenses of $439,772 for the three months ended September 30, 2019, as compared to $147,288 for the three months ended September 30, 2018, resulted in an increase in general and administrative expenses for the current period of $292,483.  The increase in general and administrative expenses of $292,483 was attributable to the following items:

·an increase in management fees of $133,186, due to additional management retained for security operations; and 

·an increase in other staff and outside services of $1,301, due to administrative staff retained for security operations; and 

·an increase in stock compensation/amortization of deferred compensation of $141,307, due to stock and stock options granted in connection with additional management retained for security operations, resulting in an increase in stock compensation of $121,896 and stock option amortization of $18,661; and a stock grant in the prior year, resulting in an increase in deferred stock compensation amortization of $750; and 

·an increase in depreciation and amortization expense of $400, due to the acquisition of intellectual property, resulting in amortization expense of $400; and 

·an increase in other general and administrative expenses of $16,289, due to increases in insurance expense of $10,347, licenses and permits of $3,541, travel of $1,916, and other office supplies and miscellaneous expenses of $485. 

General and administrative expenses in the amount of $806,211 for the nine months ended September 30, 2019, were comprised of $12,000 of legal and accounting fees, $627,131 of management fees, $1,301 of other staff and outside services, $147,459 of stock compensation/amortization of deferred compensation, $1,544 of depreciation, and $16,766 of office overhead and other general and administrative expenses.

General and administrative expenses in the amount of $451,754 for the nine months ended September 30, 2018, were comprised of $12,000 of legal and accounting fees, $439,855 of management fees, $354 of depreciation, and ($455) of office overhead and other general and administrative expenses.

General and administrative expenses of $806,211 for the nine months ended September 30, 2019, as compared to $451,754 for the nine months ended September 30, 2018, resulted in an increase in general and administrative expenses for the current period of $354,457. The increase in general and administrative expenses of $354,457 was attributable to the following items:

·an increase in management fees of $187,276, due to additional management retained for security operations; and 

·an increase in other staff and outside services of $1,301, due to administrative staff retained for security operations; and 

·an increase in stock compensation/amortization of deferred compensation of $147,459, due to stock and stock options granted in connection with additional management retained for security operations, resulting in an increase in stock compensation of $121,896 and stock option amortization of $23,313; and a stock grant in the prior year, resulting in an increase in deferred stock compensation amortization of $2,250; and 

·an increase in depreciation and amortization expense of $1,200, due to the acquisition of intellectual property, resulting in amortization expense of $1,200; and 

·an increase in other general and administrative expenses of $17,221, due to increases in insurance expense of $10,347, licenses and permits of $3,541, travel of $1,916, and other office supplies and miscellaneous expenses of $1,417. 

General and administrative expenses for the nine months ended September 30, 2019 and 2018, were incurred primarily for the purpose of advancing the Company closer to its financing and operating goals.

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Net Loss

During the nine months ended September 30, 2019, the Company incurred a net loss of $963,885, compared with a net loss of $669,324, for the nine months ended September 30, 2018. The increase in net loss of $294,561 is attributable to an increase in revenue of $106,297, an increase in cost of goods sold of $94,295, an increase in general and administrative expenses of $354,457, an increase in interest expense of $16,713, and a decrease in discount amortization of $64,607.

During the nine months ended September 30, 2019, the Company incurred a net comprehensive loss of $1,206, compared with a net comprehensive loss of $2,412 for the nine months ended September 30, 2018.  The decrease in net comprehensive loss of $1,206 is attributable to a decrease in unrealized loss on securities of $1,206.

Liquidity and Capital Resources

Working Capital Deficit
	September 30, 2019				December 31, 2018			Increase (decrease)
Current assets	$	122,665		$		––		$	122,665
Current liabilities		4,790,247				3,889,597			900,650
Working capital (deficit)	$	(4,667,582	)	$		(3,889,597	)	$	777,985

As of September 30, 2019, the Company had $39,862 in cash compared to no cash at December 31, 2018.

The Company had a working capital deficit of $4,667,582 as of September 30, 2019, compared to a working capital deficit of $3,889,597 at December 31, 2018.  The increase in working capital deficit of $777,985 is primarily attributable to increases in cash of $39.862, accounts receivable of $76,097, prepaid expenses of $6,706, accounts payable and accrued expenses of $253,731, related party notes payable of $73,904, related party convertible notes payable of $180,000, and related party payable of $393,015.

Cash Flows	For the nine months ended
	September 30, 2019			September 30, 2018		Increase (decrease)
Net cash used by operating activities	$	(47,025	)	$	––	$	(47,025	)
Net cash used by investing activities		––			––		––
Net cash provided by financing activities		86,887			––		86,887
Net increase in cash	$	39,862		$	––	$	39,862

Cash Flows from Operating Activities

During the nine months ended September 30, 2019, the Company used $47,025 in cash flows from operating activities, compared to $0 for the nine months ended September 30, 2018. The increase in cash used by operating activities of $47,025 is primarily attributable to an increase in the net loss from operations of $294,561; an increase in stock compensation/amortization of deferred compensation of $147,459; a decrease in accruals converted to related party loans of $154,676; an increase in depreciation and amortization of $1,200; a decrease in discount amortization of $64,607; increases in the changes in accounts receivable of $76,097, prepaid expenses of $6,706, accounts payable and accrued expenses of $61,127, and related party payables of $339,836.

Cash Flows from Investing Activities

During the nine months ended September 30, 2019 and 2018, the Company used no cash flows from investing activities.

Cash Flows from Financing Activities

During the nine months ended September 30, 2019, the Company was provided with $86,887 in cash flows from financing activities, compared to $0 for the nine months ended September 30, 2018.  The increase in cash provided by financing activities is primarily attributable to an increase in proceeds from related party notes payable of $50,000, and an increase in proceeds from the issuance of stock of $36,887.

As of September 30, 2019, affiliates and related parties are due a total of $4,617,885, which is comprised of promissory notes to related parties, net of unamortized discounts, in the amount of $3,426.609; accrued compensation in the amount of $1,038,876; and reimbursable expenses/cash advances to the Company in the amount of $152,400; for a net increase of $646,919. During the nine months ended September 30, 2019, promissory notes to related parties, net of unamortized discounts, increased by $253,904, accrued compensation increased by $393,321, and reimbursable expenses/cash advances decreased by $306.  All outstanding promissory notes to related parties bear interest at a rate of 5 to 7 percent per annum, are due and payable within between one (1) year of written demand and by December 31, 2023, or upon certain equity funding, and are convertible into the Company’s common stock at a price of between $0.05 and $0.25 per share.

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

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Contractual Obligations

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

Going Concern

The Company has incurred losses since inception resulting in a current period net loss of $965,091, an accumulated deficit of $18,381,919, and a working capital deficit of $4,667,582, and further losses are anticipated. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, which may not be available at commercially reasonable terms.  There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations and the Company may cease operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

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

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

The discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s audited consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. The Company believes that understanding the basis and nature of the estimates and assumptions involved with the following aspects of the Company’s consolidated financial statements is critical to an understanding of its consolidated financial statements.  The following should be read in conjunction with Note 2 to the Company’s consolidated financial statements, “Summary of Significant Accounting Policies”:

Impairment reviews

Management is required to perform tests annually, or more often if necessary, for impairment of its finite lived and indefinite lived assets, to determine if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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

·growth in EBITDA, calculated as adjusted operating profit before depreciation and amortization; 

·long term growth rates; and 

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

The Company prepares five-year projections and uses these as the basis for its impairment reviews. Changing the assumptions selected by management, in particular the discount rate and growth rate assumptions used in the projections, could significantly affect the Company’s impairment evaluation and, hence, results.

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

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

As of September 30, 2019, the end of the Company’s period covered by this quarterly report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s president, chief executive officer and chief financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, the Company’s president, chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting that occurred during the nine months ended September 30, 2019, that have materially or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

24

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

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

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

There were no unregistered securities issued by the Registrant during the current period, including sales of reacquired securities, as well as new issues, securities issued in exchange for property, services, or other securities, and new securities resulting from the modification of outstanding securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY STANDARDS

Not Applicable

ITEM 5. OTHER INFORMATION

None

25

ITEM 6. EXHIBITS

Exhibit Number	Description	Filing Reference
(2)	Plan of Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession
2.1	Agreement and Plan of Merger between the Company, PearTrack Systems Group Limited and PearTrack Acquisition Corp. effective October 17, 2014	Filed with the SEC on October 23, 2014, as part of the Company’s Current Report on Form 8-K
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation	Filed with the SEC on November 30, 2006, as part of the Company’s registration statement on form SB-2
3.2	Bylaws	Filed with the SEC on November 30, 2006, as part of the Company’s registration statement on form SB-2
3.3	Certificate of Change filed with the Secretary of State of Nevada on April 2, 2008	Filed with the SEC on April 21, 2008, as part of the Company’s Current Report on Form 8-K
3.4	Articles of Merger	Filed with the SEC on June 26, 2008, as part of the Company’s Current Report on Form 8-K
3.5	Certificate of Change filed with the Secretary of State of Nevada on August 29, 2008, with respect to reverse stock split	Filed with the SEC on September 17, 2008, as part of the Company’s Current Report on Form 8-K
3.6	Articles of Merger	Filed with the SEC on June 11, 2009, as part of the Company’s Current Report on Form 8-K
3.7	Certificate of Change filed with the Secretary of State of Nevada on May 15, 2009, with respect to reverse stock split	Filed with the SEC on June 11, 2009, as part of the Company’s Current Report on Form 8-K
3.8	Articles of Merger filed with the Secretary of State of Nevada on June 2, 2009, with respect to the merger between Ecological Acquisition Corp. and Ecologic Sciences, Inc.	Filed with the SEC on July 9, 2009, as part of the Company’s Current Report on Form 8-K
3.9	Certificate of Amendment filed with the Secretary of State of Nevada on September 29, 2014, effective October 17, 2014	Filed with the SEC on October 2, 2014, as part of the Company’s Current Report on Form 8-K
3.10	Certificate of Amendment filed with the Secretary of State of Nevada on October 8, 2019, effective October 9, 2019	Filed with the SEC on October 9, 2019, as part of the Company’s Current Report on Form 8-K
3.11	Amended and restated Articles of Incorporation filed with the Secretary of State of Nevada on October 8, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
3.12	Certificate of Incorporation of Enigma-Bulwark Risk Management, Inc. filed August 30, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
(10)	Material Contracts
10.1	License Agreement between PearTrack Systems Group Ltd. and AudioEye, Inc. dated June 30, 2014	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.2	Assignment and Licensed Rights Agreement with PearLoxx Limited dated December 19, 2014	Filed with the SEC on January 26, 2015, as part of the Company’s Current Report on form 8-K
10.3	Amendment to the Assignment and Licensed Rights Agreement with and PearLoxx Limited dated March 9, 2015	Filed with the SEC on May 20, 2015, as part of the Company’s Quarterly Report on Form 10-Q
10.4	Intellectual Property Purchase Agreement with Safer, Inc. dated October 11, 2018	Filed with the SEC on October 10, 2019, as part of the Company’s Current Report on form 8-K
10.5	Revenue Sharing Agreement with Safer, Inc. dated October 11, 2018	Filed with the SEC on October 10, 2019, as part of the Company’s Current Report on form 8-K
10.6	Royalty Agreement with Safer, Inc. dated October 11, 2018	Filed with the SEC on October 10, 2019, as part of the Company’s Current Report on form 8-K
10.7	Employment Agreement with Kyle W. Withrow dated October 1, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.8	Intellectual Property Purchase Agreement with Intellectual Property Network, Inc. dated October 11, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.9	Revenue Sharing Agreement with Intellectual Property Network, Inc. dated October 11, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.10	Royalty Agreement with Intellectual Property Network, Inc. dated October 11, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.11	Consulting Agreement with MJ Management Services, Inc. dated November 1, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.12	Consulting Agreement with Huntington Chase Ltd. dated November 1, 2018	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.13	Consulting Agreement with David Rocke dated May 1, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.14	Consulting Agreement with Michael Gabriele dated May 1, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.15	Non-Compete, Non-Dilution and Registration Rights Agreement with David Rocke dated August 28, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.16	Non-Compete, Non-Dilution and Registration Rights Agreement with Michael Gabriele dated August 28, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.17	Consulting Agreement with Clive Oosthuizen dated September 1, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.18	Consulting Agreement with Yinuo Jiang dated October 1, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.19	Non-Compete, Non-Dilution and Registration Rights Agreement with Michael Gabriele dated August 28, 2019	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
10.20	Joint Venture Agreement with Prime Africa dated October 3, 2020	Filed with the SEC on June 6, 2023, as part of the Company’s Quarterly Report on Form 10-Q
(21)	Subsidiaries of the Registrant
21.1	Enigma-Bulwark Risk Management, Inc. PearTrack Systems Group, Ltd. Ecologic Car Rentals, Inc. Ecologic Products, Inc.
(31)	Section 302 Certifications
31.1*	Section 302 Certification of Clive Oosthuizen	Filed herewith.
31.2*	Section 302 Certification of Calli R. Bucci	Filed herewith.
(32)	Section 906 Certifications
32.1*	Section 906 Certification of Clive Oosthuizen	Filed herewith.
32.2*	Section 906 Certification of Calli R. Bucci	Filed herewith.
(101)	Interactive Data Files
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

*Filed herewith. 

**Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. 

26

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ENIGMA-BULWARK, LTD.
Dated: June 8, 2023	/s/ Clive Oosthuizen
	Clive Oosthuizen
	President and CEO
Dated: June 8, 2023	/s/ Calli Bucci
	Calli Bucci
	Chief Financial Officer

27

EX-31

EXHIBIT 31.1

CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Clive Oosthuzien., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Enigma-Bulwark, Ltd.; 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):  

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and  

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 

/s/ Clive Oosthuzien.  

Clive Oosthuzien

President and CEO

June 8, 2023

EX-31

Ex 31.2 Sec 302 Cert-CFO

EX-32

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Clive Oosthuzien., hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Quarterly Report on Form 10-Q of Enigma-Bulwark, Ltd. for the period ended September 30, 2019 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Enigma-Bulwark, Ltd. 

/s/ Clive Oosthuzien  

Clive Oosthuzien

President and CEO

June 8, 2023

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Enigma-Bulwark, Ltd. and will be retained by Enigma-Bulwark, Ltd. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Calli Bucci, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Quarterly Report on Form 10-Q of Enigma-Bulwark, Ltd. for the period ended September 30, 2019 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Enigma-Bulwark, Ltd. 

/s/ Calli Bucci  

Calli Bucci

Chief Financial Officer

June 8, 2023

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Enigma-Bulwark, Ltd. and will be retained by Enigma-Bulwark, Ltd. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	May 31, 2023
Details
Registrant CIK	0001379245
Fiscal Year End	--12-31
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	333-139045
Entity Registrant Name	ENIGMA-BULWARK, LTD.
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	46-4733512
Entity Address, Address Line One	3415 South Sepulveda Blvd., Suite 1100-#1234
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90034
Phone Fax Number Description	Registrant's telephone number
City Area Code	888
Local Phone Number	287-9994
Entity Current Reporting Status	No
Entity Interactive Data Current	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		136,591,547
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 39,862	$ 0
Accounts receivable	76,097	0
Prepaid expenses	6,706	0
Total current assets	122,665	0
TOTAL ASSETS	159,994	40,089
Non-current assets
Investment in securities	1,207	2,413
Property and equipment, net	356	710
Intangible assets, net	29,966	31,166
Other assets	5,800	5,800
Total non-current assets	37,329	40,089
Current liabilities
Accounts payable and accrued expenses	1,946,477	1,692,746
Notes and loans payable	169,605	169,605
Notes payable, related party, net of unamortized discount	73,904	0
Notes payable, convertible	500,000	500,000
Notes payable, convertible, related party	908,985	728,985
Related party payables	1,191,276	798,261
Total current liabilities	4,790,247	3,889,597
Long-term liabilities
Notes payable, related party, convertible, net of unamortized discount	2,443,720	2,443,720
Total long-term liabilities	2,443,720	2,443,720
Total liabilities	7,233,967	6,333,317
Stockholders' deficit
Preferred Stock	0	0
Common stock, $0.001 par value, 250,000,000 shares authorized, 94,937,223 and 77,382,753 issued and outstanding as of September 30, 2019, and December 31, 2018, respectively	94,937	77,382
Additional paid in capital	11,220,871	11,057,370
Subscriptions receivable	(3,710)	(7,000)
Accumulated deficit	(18,381,919)	(17,418,034)
Accumulated comprehensive income	(4,152)	(2,946)
Total stockholders' deficit	(7,073,973)	(6,293,228)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 159,994	$ 40,089

XML

Consolidated Balance Sheets - Parenthetical - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Consolidated Balance Sheets
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	25,000,000	25,000,000
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Shares Issued and Outstanding	94,937,223	77,382,753

XML

Consolidated Statements of Income - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Consolidated Statements of Income
Revenue	$ 106,297	$ 0	$ 106,297	$ 0
Cost of sales	94,295	0	94,295	0
Gross profit	12,002	0	12,002	0
General and administrative expenses	439,772	147,289	806,211	451,754
Operating loss	(427,770)	(147,289)	(794,209)	(451,754)
Other expenses
Interest expense	(60,520)	(53,080)	(169,582)	(152,869)
Discount amortization	(94)	(21,804)	(94)	(64,701)
Total other expenses	(60,614)	(74,884)	(169,676)	(217,570)
Net loss	(488,384)	(222,173)	(963,885)	(669,324)
Comprehensive loss
Unrealized loss on securities	0	0	(1,206)	(2,412)
Net comprehensive loss	0	0	(1,206)	(2,412)
Net loss and comprehensive loss	$ (488,384)	$ (222,173)	$ (965,091)	$ (671,736)
Net loss per share - basic and diluted	$ (0.006)	$ (0.003)	$ (0.012)	$ (0.010)
Weighted average common shares outstanding - basic and diluted	83,790,500	69,382,753	79,221,627	69,382,753

XML

Consolidated Statement of Stockholders' Deficit - USD ($)	Common Stock, Shares	Common Stock, Value	Paid In Capital	Subscriptions Receivable	Accumulated Deficit	AOCI	Total
Equity Balance at Dec. 31, 2017		$ 69,382	$ 11,025,120	$ 0	$ (18,511,900)	$ (534)	$ (7,417,932)
Equity Balance, Shares at Dec. 31, 2017	69,382,753
Net Loss					(221,777)		(224,189)
Comprehensive Loss						(2,412)
Equity Balance at Mar. 31, 2018		69,382	11,025,120	0	(18,733,677)	(2,946)	(7,642,121)
Equity Balance, Shares at Mar. 31, 2018	69,382,753
Net Loss					(225,374)		(225,374)
Comprehensive Loss						0
Equity Balance at Jun. 30, 2018		69,382	11,025,120	0	(18,959,051)	(2,946)	(7,867,495)
Equity Balance, Shares at Jun. 30, 2018	69,382,753
Net Loss					(222,173)		(222,173)
Comprehensive Loss						0
Equity Balance at Sep. 30, 2018		69,382	11,025,120	0	(19,181,224)	(2,946)	(8,089,668)
Equity Balance, Shares at Sep. 30, 2018	69,382,753
Equity Balance at Dec. 31, 2018		77,382	11,057,370	(7,000)	(17,418,034)	(2,946)	(6,293,228)
Equity Balance, Shares at Dec. 31, 2018	77,382,753
Amortization of restricted stock award			750				750
Net Loss					(209,169)		(210,375)
Comprehensive Loss						(1,206)
Equity Balance at Mar. 31, 2019		77,382	11,058,120	(7,000)	(17,627,203)	(4,152)	(6,502,853)
Equity Balance, Shares at Mar. 31, 2019	77,382,753
Equity Balance at Dec. 31, 2018		77,382	11,057,370	(7,000)	(17,418,034)	(2,946)	(6,293,228)
Equity Balance, Shares at Dec. 31, 2018	77,382,753
Equity Balance at Sep. 30, 2019	$ 94,937,223	94,937	11,220,871	(3,710)	(18,381,919)	(4,152)	(7,073,973)
Equity Balance at Mar. 31, 2019		77,382	11,058,120	(7,000)	(17,627,203)	(4,152)	(6,502,853)
Equity Balance, Shares at Mar. 31, 2019	77,382,753
Amortization of restricted stock award			750				750
Amortization of stock options			4,652				4,652
Net Loss					(266,332)		(266,332)
Equity Balance at Jun. 30, 2019		77,382	11,063,522	(7,000)	(17,893,535)	(4,152)	(6,763,783)
Grant of stock award for services-officers/directors		13,544	121,896	(210)			135,230
Exercise of stock options-officers/directors		4,011	16,042				20,053
Amortization of restricted stock award			750				750
Amortization of stock options			18,661				18,661
Grant of stock award for services-officers/directors, shares	13,544,000
Exercise of stock options-officers/directors shares	4,010,470
Net Loss					(488,384)		(488,384)
Equity Balance at Sep. 30, 2019	$ 94,937,223	$ 94,937	$ 11,220,871	(3,710)	$ (18,381,919)	$ (4,152)	(7,073,973)
Subscriptions received				$ 3,500			$ 3,500

XML

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flow from operating activities
Net income (loss) and comprehensive income (loss)	$ (965,091)	$ (671,736)
Comprehensive income (loss)	(1,206)	(2,412)
Net loss	(963,885)	(669,324)
Adjustments to reconcile net loss to net cash used by operating activities
Stock compensation/amortization of deferred compensation	147,459	0
Accruals converted to related party loans	205,000	359,676
Depreciation and amortization	1,554	354
Discount amortization	94	64,701
Changes in operating assets and liabilities
Increase in accounts receivable	(76,097)	0
Increase in prepaid expenses	(6,706)	0
Increase in accounts payable and accrued expenses	252,541	191,414
Increase in related party payables	393,015	53,179
Net cash used by operating activities	(47,025)	0
Cash flow from financing activities
Proceeds from related party promissory notes	50,000	0
Proceeds from issuance of common stock	36,887	0
Net cash provided by financing activities	86,887	0
Net increase in cash	39,862	0
Cash - beginning of period	0	0
Cash - end of period	39,862	0
NONCASH ACTIVITIES
Imputed interest on related party promissory note	1,190	0
Conversion of related party payable to related party convertible note payable	205,000	359,676
Conversion of convertible note payable to related party convertible note payable	0	188,755
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	13,912	0
Income taxes paid	$ 0	$ 0

XML

Overview and Nature of Business

9 Months Ended

Sep. 30, 2019

Notes

Overview and Nature of Business

NOTE 1. OVERVIEW AND NATURE OF BUSINESS

The accompanying unaudited consolidated financial statements of Enigma-Bulwark, Ltd., (the “Company” or “Enigma”) have been prepared in accordance with generally accepted accounting principles.  The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2018. Notes to the consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements have been omitted.

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

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

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

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

As of September 30, 2019, the Company was structured with four wholly-owned subsidiaries: Enigma-Bulwark Risk Management, Inc., a Delaware corporation, and PearTrack Systems Group, Ltd. (“PTSG”), Ecologic Products, Inc. (“EPI”), and Ecologic Car Rentals, Inc. (“ECR”), all Nevada corporations.  The Company’s current business activities are diversified into two specific markets: security and risk management, and remote/mobile asset tracking products.

The Company intends to provide a unique solution to security issues in the intermodal shipping container marketplace, with its patented container tracking and locking system, EnigmaLok (formerly PearLoxx), the rights of which were licensed to the Company in perpetuity in 2015.

Through the subsidiaries, Ecologic Car Rentals, Inc. and Ecologic Products, Inc., the Company continues its pursuits for strategic opportunities for its shareholders, as management believes that the brands have value for companies with environmentally-friendly consumer-related products and services.

Going Concern

The Company has incurred losses since inception resulting in a current period net loss of $965,091, an accumulated deficit of $18,381,919, and a working capital deficit of $4,667,582 as of September 30, 2019, and further losses are anticipated. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, which may not be available at commercially reasonable terms.  There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations and the Company may cease operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

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

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Notes

Significant Accounting Policies

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

The Company’s fiscal year end is December 31.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Use of Estimates

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

Fair Value Hierarchy

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

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

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

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

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

Fair Value of Financial Instruments

As of September 30, 2019, and December 31, 2018, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, investments in securities, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation.

Cash and Cash Equivalents

The Company considers cash in banks, deposits in transit, and highly-liquid debt instruments purchased with original maturities of three months or less to be cash and cash equivalents. As of September 30, 2019, and December 31, 2018, the Company had no cash equivalents.

Accounts Receivable

Accounts receivable are stated net of an allowance for doubtful accounts. The accounts receivable balance primarily includes amounts from customers of the Company’s security services.  Charges to bad debt are based on both historical write-offs and specifically identified receivables. As of September 30, 2019 and December 31, 2018, no allowance for doubtful accounts was established.

Investments in Securities

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

Property and Equipment

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

Intangible Assets

Product processes, patents and customer lists are amortized on a straight-line basis over their estimated useful lives between 4 to 20 years.  Application development stage costs for significant internally developed software projects are capitalized and amortized on a straight-line basis over the useful life, between 2 to 5 years.  Costs to extend and maintain patents and trademarks are charged directly to expense as incurred.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.  When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.  Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

Due to the Company’s recurring losses and lack of revenue from its intellectual properties, its intellectual properties were evaluated for impairment, and it was determined that expected future cash flows were sufficient for recoverability of the assets at September 30, 2019, and December 31, 2018.

Convertible Debt

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

Revenue Recognition

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

The Company’s revenue is generated from limited customer contracts for its security services operations.  As of September 30, 2019, the Company has not generated revenues from the commercialization of its intellectual properties.

Income Taxes

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

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

As of September 30, 2019, the Company had not yet filed its 2013 through 2018 annual corporate income tax returns, which were filed in April 2022.  Due to the Company’s recurring losses, no corporate income taxes are due for these periods.

Net Income (Loss) Per Common Share

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

Other Comprehensive Income (Loss)

Other comprehensive income includes unrealized gains and losses on securities available for sale, and unrealized gains and losses resulting from foreign exchange differences.  During the nine months ended September 30, 2019 and 2018, respectively, other comprehensive losses of $1,206 and $2,412 have been recognized.  As of September 30, 2019 and 2018, respectively, other comprehensive losses of $4,152 and $2,946 has been accumulated.

The following represents the accumulated comprehensive income activity:

	Unrealized Foreign Currency Exchange		Unrealized Securities Gains (Losses)			Total Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2017	$	6,703	$	(7,237	)	$	(534	)
Gain (loss)		--		(2,412	)		(2,412	)
Balance, September 30, 2018	$	6,703	$	(9,649	)	$	(2,946	)
Balance, December 31, 2018	$	6,703	$	(9,649	)	$	(2,946	)
Gain (loss)		--		(1,206	)		(1,206	)
Balance, September 30, 2019	$	6,703	$	(10,855	)	$	(4,152	)

Stock Based Compensation

The Company records stock-based 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. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Recent Accounting Pronouncements

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

Adopted:

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10: Recognition and Measurement of Financial Assets and Financial Liabilities). The new guidance is intended to improve the recognition, measurement, presentation and disclosure of financial instruments. Among other changes, there will no longer be an available-for-sale classification for which changes in fair value are currently reported in other comprehensive income for equity securities with readily determinable fair values. Equity investments with readily determinable fair values will be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for the Company beginning January 1, 2018, with early adoption not permitted.  

In February 2016, the FASB issued ASU No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU is effective for the Company beginning January 1, 2019, with early adoption permitted.

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

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory.  ASU 2016-16 improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory.  As part of the Board’s initiative to reduce complexity in accounting standards.  The amendments in this update are effective for the Company for annual reporting periods beginning after December 15, 2017, and interim periods.  Early adoption is permitted for interim or annual reporting periods for which financial statements have not been issued or made available for issuance.

In October 2016, the FASB issued ASU No. 2016-17, Consolidation (Topic 810), Interests Held through Related Parties That Are Under Common Control.  ASU 2016-17 amends the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity.  The amendments in this update are effective for the Company for fiscal years beginning after December 15, 2016, and interim periods.  Early adoption is permitted.

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

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

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

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

In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting.  ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company for annual periods beginning after December 15, 2018, and interim periods.  Early adoption is permitted.

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

Not Yet Adopted:

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

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

In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.  The amendments to Topic 326 and other Topics in ASU 2019-04 clarify or address stakeholders’ specific issues about certain aspects of the amendments in Update 2016-13. The amendments to Topic 815 in ASU 2019-04 include items related to Update 2017- 12 and clarify certain aspects of Topic 815. The amendments to Topic 321 and other Topics in ASU 2019-04 relate to the amendments in Update 2016-01 and clarify certain aspects of the amendments in Update 2016-01. ASU 2019-04 is effective for the Company for annual periods beginning after December 15, 2019, and interim periods.  Early adoption is permitted.  The Company is currently evaluating the impact of the application of this accounting standard update on its consolidated financial statements and related disclosures.

Recently Issued Accounting Standards Updates: 

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

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Investment in Securities

9 Months Ended

Sep. 30, 2019

Notes

Investment in Securities

NOTE 3. INVESTMENT IN SECURITIES

As of September 30, 2019, and December 31, 2018, the Company held 12,061,854 shares of Amazonas Florestal, Ltd. (OTC: AZFL) common stock. The securities are classified as Level 1 investments (Note 2, Fair Value Hierarchy), and are valued using the quoted market prices. During the nine months ended September 30, 2019 and 2018, respectively, $1,206 and $2,412 in unrealized losses were recognized and included as part of comprehensive income (loss).  As of September 30, 2019, and December 31, 2018, respectively, $10,855 and $9,649 in cumulative unrealized losses were recognized, and the securities held a fair value of $1,207 and $2,413.

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Property and Equipment

9 Months Ended

Sep. 30, 2019

Notes

Property and Equipment

NOTE 4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	September 30, 2019			December 31, 2018
Office equipment	$	2,362		$	2,362
Accumulated depreciation		(2,006	)		(1,652	)
Property and equipment, net	$	356		$	710

During the nine months ended September 30, 2019 and 2018, respectively, $354 and $354 in depreciation was expensed.

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Intangible Assets

9 Months Ended

Sep. 30, 2019

Notes

Intangible Assets

NOTE 5.  INTANGIBLE ASSETS

Intangible assets consists of the following:

	September 30, 2019			December 31, 2018
Intellectual property	$	31,500		$	31,500
Accumulated amortization		(1,534	)		(334	)
Intellectual property, net	$	29,966		$	31,166

During the nine months ended September 30, 2019 and 2018, respectively, $1,200 and $0 in amortization was expensed.

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Accounts Payable and Accrued Expenses

9 Months Ended

Sep. 30, 2019

Notes

Accounts Payable and Accrued Expenses

NOTE 6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of:

	September 30, 2019		December 31, 2018
Accounts payable-vendors	$	774,766	$	713,581
Accrued payroll and taxes		110,995		80,995
Accrued interest		1,049,108		897,391
Sales tax payable		10,829		--
Other liabilities		779		779
Total accounts payable and accrued expenses	$	1,946,477	$	1,692,746

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Notes and Loans Payable

9 Months Ended

Sep. 30, 2019

Notes

Notes and Loans Payable

NOTE 7. NOTES AND LOANS PAYABLE

Notes and loans payable consists of the following:

	September 30, 2019		December 31, 2018
Loans payable	$	44,605	$	44,605
Notes payable, short term		125,000		125,000
Total notes and loans payable		169,605		169,605
Notes payable, short-term, convertible		500,000		500,000
Total	$	669,605	$	669,605

Notes payable includes the following convertible promissory notes at September 30, 2019, and December 31, 2018:

Description	Principal		Interest Rate (%)	Conversion Rate	Maturity Date
Matrix Advisors, Inc.	$	500,000	5	$0.25	12/31/2015	[1]
Total convertible notes payable	$	500,000

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

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, interest in the amount of $38,893 and $60,797 was expensed; and $0 and $68,726 was reclassified to related party interest. As of September 30, 2019, and December 31, 2018, respectively, interest in the amount of $389,959 and $351,066 has been accrued and is included as part of accrued expenses on the accompanying consolidated balance sheets.

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Related Party Transactions

9 Months Ended

Sep. 30, 2019

Notes

Related Party Transactions

NOTE 8. RELATED PARTY TRANSACTIONS

Related party transactions consists of the following:

	September 30, 2019		December 31, 2018
Notes payable, short term, net of discount	$	73,904	$	--
Notes payable, convertible, short-term		908,985		728,985
Notes payable, convertible, long-term		2,443,720		2,443,720
Total notes payable		3,426,609		3,172,705
Accrued compensation		1,038,876		645,555
Reimbursable expenses/cash advances payable		152,400		152,706
Total related party payable		1,191,276		798,261
Total related party transactions	$	4,617,885	$	3,970,966

Related party notes payable consists of the following convertible notes payable at September 30, 2019, and December 31, 2018:

Description	Principal		Interest Rate (%)	Conversion Rate	Maturity Date
Short-term:
Huntington Chase Financial Group	$	413,913	7	$0.05	1 year from demand	[1]
Huntington Chase LLC		220,000	5	$0.05	12/31/2023
William Nesbitt		86,317	5	$0.05	Funding	[2]
Kasper Group, Ltd.		188,755	7	$0.05	1 year from demand	[1]
Total short-term		908,985
Long-term:
Huntington Chase Financial Group		1,103,000	5	$0.05	12/31/2021
E. William Withrow Jr.		894,256	5	$0.05	12/31/2021
John Macey		426,464	4	$0.25	12/31/2023
Total long-term		2,423,720
Total convertible notes payable	$	3,352,705

[1] No demand has been made

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

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

As of September 30, 2019, and December 31, 2018, respectively, affiliates and related parties are due a total of $4,617,885 and $3,970,966, which is comprised of promissory notes to related parties, net of unamortized discounts of $1,096 and $0, in the amount of $3,426,609 and $3,172,705; accrued compensation in the amount of $1,038,876 and $645,555; and reimbursable expenses/cash advances to the Company in the amount of $152,400 and $152,706; for a net increase (decrease) of $646,919 and ($1,182,536). During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, promissory notes to related parties increased (decreased) by $255,000 and $($1,391,569), unamortized discounts increased (decreased) by $1,096 and ($81,469), accrued compensation increased by $393,321 and $127,564, and reimbursable expenses cash advances decreased by $306 and $0.

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, promissory notes to related parties, net of unamortized discounts, increased (decreased) by $253,904 and ($1,310,100), as a result of an increase in accrued compensation owed to related parties in the amount of $205,000 and $419,676 converted to convertible promissory notes; $50,000 and $0 in cash loans to the Company; $0 and $188,755 reclassified from non-related party promissory notes; $0 and $2,000,000 in secured promissory notes canceled; and an increase (decrease) in unamortized discount in the amount of $1,096 and $81,469.

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, $598,321 and $548,240 in related party compensation was accrued, of which $205,000 and $419,676 was converted into convertible promissory notes; and $0 and $1,000 was paid; for a net increase in accrued compensation in the amount of $393,321 and $127,564.

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, reimbursable expenses/cash advances owed to related parties decreased by $306 and $0 as a result of an increase in cash loans to the Company and expenses paid by related parties on behalf of the Company in the amount of $3,281 and $0; and repayments to related parties in the amount of $3,587 and $0.

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, $130,690 and $215,096 in interest on related party loans was expensed; and $13,912 and $0 was paid to the note holder. As of September 30, 2019, and December 31, 2018, respectively, $663,103 and $546,325 in interest on related party loans has been accrued, and is included as part of accrued expenses on the accompanying consolidated balance sheets.

Agreements

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

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

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

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

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

Stock Issuances

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

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

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Capital Stock

9 Months Ended

Sep. 30, 2019

Notes

Capital Stock

NOTE 9. CAPITAL STOCK

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

On August 29, 2019, in connection with certain consultants’ agreements, the Company issued 13,334,000 shares of its restricted Common Stock, valued at $133,340, at $0.001 per share, for cash in the amount of $13,334, plus 210,000 shares under the agreements’ non-dilution provision, valued at $2,100, at $0.001 per share, for cash in the amount of $210.  As a result, $121,896 was recorded as additional paid in capital.

On September 20, 2019, in connection with the exercise of certain stock options, the Company issued 4,010,470 shares of its restricted Common Stock to related parties at an exercise price of $0.005, for cash in the amount of $20,052. As a result, $16,042 was recorded to additional paid in capital.

As of September 30, 2019, and December 31, 2018, respectively, the Company had 94,937,223 and 77,382,753 shares of Common Stock issued and outstanding.

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Stock Options and Awards

9 Months Ended

Sep. 30, 2019

Notes

Stock Options and Awards

NOTE 10. STOCK OPTIONS AND AWARDS

Stock Options

As of September 30, 2019, and December 31, 2018, the Company had 7,467,163 and 602,500 stock options issued and outstanding.

On May 15, 2019, in connection with certain consulting agreements, the Company granted 9,625,133 options to purchase shares of its Common Stock, valued at $55,825 using the Black-Scholes method, at an exercise price of $0.005 per share.  The options are exercisable for a period of five (5) years, of which 50% vest when certain performance goals are met, and the remainder vest when certain funding goals are met. .The assumptions used in valuing the options were: expected term 4.00 years, expected volatility 38.58%, risk free interest rate 2.15%, and dividend yield 0%.

On September 1, 2019, in connection with a certain consulting agreement, the Company granted 1,250,000 options to purchase shares of its Common Stock, valued at $625 using the Black-Scholes method, at an exercise price of $0.05 per share.  The options are exercisable for a period of five (5) years, and vest periodically over a period of thirty-six (36) months. The assumptions used in valuing the options were: expected term 5.75 years, expected volatility 41.3%, risk free interest rate 1.84%, and dividend yield 0%.

Outstanding and Exercisable Options
		Remaining	Exercise Price
	Number of	Contractual Life	times Number		Weighted Average
Exercise Price	Shares	(in years)	of Shares		Exercise Price
$0.005	5,614,663	4.85	$	28,073		$0.16
$0.05	1,250,000	4.90		62,500		$0.04
$0.10	500,000	4.30		50,000		$0.63
$3.20	102,500	1.55		328,000		$3.20
	7,467,163		$	468,573		$1.20

Options Activity	Number		Weighted Average
	of Shares		Exercise Price
Outstanding at December 31, 2018	602,500			$2.34
Granted	10,875,133			$0.20
Exercised	(4,010,470	)		($0.16)
Expired / Cancelled	--			--
Outstanding at September 30, 2019	7,467,163			$1.20

During the nine months ended September 30, 2019, and the year ended December 31, 2018, 10,875,133 and 500,000 stock options were granted, for which $56,450 and $0 in deferred stock option compensation was recorded, and $23,313 and $0 was expensed. There remained $33,137 and $0 deferred stock option compensation at September 30, 2019, and December 31, 2018, to be expensed over the next thirty-three (33) months.

Restricted Stock Awards

During the nine months ended September 30, 2019, and the year ended December 31, 2018, respectively, 0 and 1,000,000 restricted stock awards were granted, valued at $0 and $9,000, net of cost in the amount of $0 and $1,000; and 250,000 and 83,333 restricted stock awards vested, for which $2,250 and $750 in deferred stock compensation was expensed. As of September 30, 2019, and December 31, 2018, respectively, 666,667 and 916,667 shares remain to be vested, and $6,000 and $8,250 deferred stock compensation remains to be expensed over the next twenty-four (24) months.

Restricted Stock Awards Activity	Number		Deferred
	of Shares		Compensation
Outstanding at December 31, 2018	916,667		$	8,250
Granted	--			--
Vested	(250,000	)		(2,250	)
Forfeited/Canceled	--			--
Outstanding at September 30, 2019	666,667		$	6,000

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Segment Reporting

9 Months Ended

Sep. 30, 2019

Notes

Segment Reporting

NOTE 11. SEGMENT REPORTING

The Company currently operates with two (2) business segments: Security Services and Corporate/Intellectual Property.  The following table is a reconciliation of the Company’s business segments to the consolidated financial statements:

	Security Services [1]			Corporate/ Intellectual Property			Consolidated Totals
September 30, 2019
Revenue	$	106,297		$	--		$	106,297
Gross profit		12,002			--			12,002
Operating loss		(4,996	)		(789,213	)		(794,209	)
Depreciation and amortization		--			1,554			1,554
Interest expense		3,952			165,630			169,582
Discount amortization		--			94			94
Unrealized losses		--			(1,206	)		(1,206	)
Total assets		104,584			55,410			159,994
September 30, 2018
Revenue	$	--		$	--		$	--
Gross profit		--			--			--
Operating loss		--			(451,754	)		(451,754	)
Depreciation and amortization		--			354			354
Interest expense		--			152,869			152,869
Discount amortization		--			64,701			64,701
Unrealized losses		--			(2,412	)		(2,412	)
Total assets		--			9,041			9,041

[1] Security Services Segment commenced August 2019.

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Subsequent Events

9 Months Ended

Sep. 30, 2019

Notes

Subsequent Events

NOTE 12. SUBSEQUENT EVENTS

The Company has evaluated the events and transactions for recognition or disclosure subsequent to September 30, 2019, and has determined that there have been no events that would require disclosure, with the exception of the following:

During the period October 1, 2019, to December 31, 2022, the Company increased its loans from related parties by $1,386,983, from a total of $4,617,885 at September 30, 2019, to $6,004,868 at December 31, 2022. The increase represents (a) an increase in promissory notes in the amount of $2,062,562, as a result of (i) $110,995 reclassified from non-related party transactions, (ii) $426,464 reclassified to non-related party transactions, (iii) $3,764,845 converted from accrued compensation, (iv) an increase in discounts resulting from beneficial conversion features of $1,051,304, (v) a decrease in unamortized discount of $741,522, (vi) payments to the Company in the amount of $4,500 for stock award payments, (vii) $521,557 converted to common stock, and (viii) payments to related parties in the amount of $549,975; (b) a decrease in accrued compensation of $560,153 as a result of (i) $3,321,164 in accrued compensation, of which $3,764,845 was converted into promissory notes, (ii) $55,000 in accrued compensation reclassified to non-related party transactions, (iii) payments to the Company in the amount of $5,500 for related party stock awards, and (iv) payments to related parties in the amount of $55,972; and (c) a decrease in reimbursable expenses and cash advances to the Company of $115,426. All outstanding related party promissory notes bear interest at a rate of 5 to 7 percent per annum, are due and payable between one (1) year of written demand and December 31, 2024, or upon certain equity funding, and are convertible into the Company’s common stock at a price of between $0.05 to $0.25 per share, or the 20-day average trading price.

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

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

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

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

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

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

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

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

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

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

Management Changes:

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

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

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

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

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

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

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

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Policies

Basis of Presentation

Basis of Presentation

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

The Company’s fiscal year end is December 31.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Use of Estimates

Use of Estimates

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

Fair Value Hierarchy

Fair Value Hierarchy

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

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

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

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

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

Fair Value of Financial Instruments

Fair Value of Financial Instruments

As of September 30, 2019, and December 31, 2018, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, investments in securities, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers cash in banks, deposits in transit, and highly-liquid debt instruments purchased with original maturities of three months or less to be cash and cash equivalents. As of September 30, 2019, and December 31, 2018, the Company had no cash equivalents.

Accounts Receivable

Accounts Receivable

Accounts receivable are stated net of an allowance for doubtful accounts. The accounts receivable balance primarily includes amounts from customers of the Company’s security services.  Charges to bad debt are based on both historical write-offs and specifically identified receivables. As of September 30, 2019 and December 31, 2018, no allowance for doubtful accounts was established.

Investments in Securities

Investments in Securities

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

Property and Equipment

Property and Equipment

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

Intangible Assets

Intangible Assets

Product processes, patents and customer lists are amortized on a straight-line basis over their estimated useful lives between 4 to 20 years.  Application development stage costs for significant internally developed software projects are capitalized and amortized on a straight-line basis over the useful life, between 2 to 5 years.  Costs to extend and maintain patents and trademarks are charged directly to expense as incurred.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.  When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.  Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

Due to the Company’s recurring losses and lack of revenue from its intellectual properties, its intellectual properties were evaluated for impairment, and it was determined that expected future cash flows were sufficient for recoverability of the assets at September 30, 2019, and December 31, 2018.

Convertible Debt

Convertible Debt

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

Revenue Recognition

Revenue Recognition

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

The Company’s revenue is generated from limited customer contracts for its security services operations.  As of September 30, 2019, the Company has not generated revenues from the commercialization of its intellectual properties.

Income Taxes

Income Taxes

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

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

As of September 30, 2019, the Company had not yet filed its 2013 through 2018 annual corporate income tax returns, which were filed in April 2022.  Due to the Company’s recurring losses, no corporate income taxes are due for these periods.

Net Income (Loss) Per Common Share

Net Income (Loss) Per Common Share

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

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

Other comprehensive income includes unrealized gains and losses on securities available for sale, and unrealized gains and losses resulting from foreign exchange differences.  During the nine months ended September 30, 2019 and 2018, respectively, other comprehensive losses of $1,206 and $2,412 have been recognized.  As of September 30, 2019 and 2018, respectively, other comprehensive losses of $4,152 and $2,946 has been accumulated.

The following represents the accumulated comprehensive income activity:

	Unrealized Foreign Currency Exchange		Unrealized Securities Gains (Losses)			Total Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2017	$	6,703	$	(7,237	)	$	(534	)
Gain (loss)		--		(2,412	)		(2,412	)
Balance, September 30, 2018	$	6,703	$	(9,649	)	$	(2,946	)
Balance, December 31, 2018	$	6,703	$	(9,649	)	$	(2,946	)
Gain (loss)		--		(1,206	)		(1,206	)
Balance, September 30, 2019	$	6,703	$	(10,855	)	$	(4,152	)

Stock Based Compensation

Stock Based Compensation

The Company records stock-based 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. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

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

Adopted:

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10: Recognition and Measurement of Financial Assets and Financial Liabilities). The new guidance is intended to improve the recognition, measurement, presentation and disclosure of financial instruments. Among other changes, there will no longer be an available-for-sale classification for which changes in fair value are currently reported in other comprehensive income for equity securities with readily determinable fair values. Equity investments with readily determinable fair values will be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for the Company beginning January 1, 2018, with early adoption not permitted.  

In February 2016, the FASB issued ASU No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU is effective for the Company beginning January 1, 2019, with early adoption permitted.

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

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory.  ASU 2016-16 improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory.  As part of the Board’s initiative to reduce complexity in accounting standards.  The amendments in this update are effective for the Company for annual reporting periods beginning after December 15, 2017, and interim periods.  Early adoption is permitted for interim or annual reporting periods for which financial statements have not been issued or made available for issuance.

In October 2016, the FASB issued ASU No. 2016-17, Consolidation (Topic 810), Interests Held through Related Parties That Are Under Common Control.  ASU 2016-17 amends the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity.  The amendments in this update are effective for the Company for fiscal years beginning after December 15, 2016, and interim periods.  Early adoption is permitted.

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

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

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

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

In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting.  ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company for annual periods beginning after December 15, 2018, and interim periods.  Early adoption is permitted.

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

Not Yet Adopted:

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

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

In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.  The amendments to Topic 326 and other Topics in ASU 2019-04 clarify or address stakeholders’ specific issues about certain aspects of the amendments in Update 2016-13. The amendments to Topic 815 in ASU 2019-04 include items related to Update 2017- 12 and clarify certain aspects of Topic 815. The amendments to Topic 321 and other Topics in ASU 2019-04 relate to the amendments in Update 2016-01 and clarify certain aspects of the amendments in Update 2016-01. ASU 2019-04 is effective for the Company for annual periods beginning after December 15, 2019, and interim periods.  Early adoption is permitted.  The Company is currently evaluating the impact of the application of this accounting standard update on its consolidated financial statements and related disclosures.

Recently Issued Accounting Standards Updates: 

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

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Significant Accounting Policies: Other Comprehensive Income (Loss): Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Comprehensive Income (Loss)

	Unrealized Foreign Currency Exchange		Unrealized Securities Gains (Losses)			Total Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2017	$	6,703	$	(7,237	)	$	(534	)
Gain (loss)		--		(2,412	)		(2,412	)
Balance, September 30, 2018	$	6,703	$	(9,649	)	$	(2,946	)
Balance, December 31, 2018	$	6,703	$	(9,649	)	$	(2,946	)
Gain (loss)		--		(1,206	)		(1,206	)
Balance, September 30, 2019	$	6,703	$	(10,855	)	$	(4,152	)

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Property and Equipment: Schedule of Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Property and Equipment

	September 30, 2019			December 31, 2018
Office equipment	$	2,362		$	2,362
Accumulated depreciation		(2,006	)		(1,652	)
Property and equipment, net	$	356		$	710

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Intangible Assets: Schedule of Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Intangible Assets

	September 30, 2019			December 31, 2018
Intellectual property	$	31,500		$	31,500
Accumulated amortization		(1,534	)		(334	)
Intellectual property, net	$	29,966		$	31,166

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Accounts Payable and Accrued Expenses: Schedule of Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Accounts Payable and Accrued Expenses

	September 30, 2019		December 31, 2018
Accounts payable-vendors	$	774,766	$	713,581
Accrued payroll and taxes		110,995		80,995
Accrued interest		1,049,108		897,391
Sales tax payable		10,829		--
Other liabilities		779		779
Total accounts payable and accrued expenses	$	1,946,477	$	1,692,746

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Notes and Loans Payable: Schedule of Notes and Loans Payable (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Notes and Loans Payable

	September 30, 2019		December 31, 2018
Loans payable	$	44,605	$	44,605
Notes payable, short term		125,000		125,000
Total notes and loans payable		169,605		169,605
Notes payable, short-term, convertible		500,000		500,000
Total	$	669,605	$	669,605

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Notes and Loans Payable: Schedule of Convertible Debt (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Convertible Debt

Description	Principal		Interest Rate (%)	Conversion Rate	Maturity Date
Matrix Advisors, Inc.	$	500,000	5	$0.25	12/31/2015	[1]
Total convertible notes payable	$	500,000

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

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Related Party Transactions: Schedule of Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Related Party Transactions

	September 30, 2019		December 31, 2018
Notes payable, short term, net of discount	$	73,904	$	--
Notes payable, convertible, short-term		908,985		728,985
Notes payable, convertible, long-term		2,443,720		2,443,720
Total notes payable		3,426,609		3,172,705
Accrued compensation		1,038,876		645,555
Reimbursable expenses/cash advances payable		152,400		152,706
Total related party payable		1,191,276		798,261
Total related party transactions	$	4,617,885	$	3,970,966

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Related Party Transactions: Schedule of Convertible Notes Payable-Related Party (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Convertible Notes Payable-Related Party

Description	Principal		Interest Rate (%)	Conversion Rate	Maturity Date
Short-term:
Huntington Chase Financial Group	$	413,913	7	$0.05	1 year from demand	[1]
Huntington Chase LLC		220,000	5	$0.05	12/31/2023
William Nesbitt		86,317	5	$0.05	Funding	[2]
Kasper Group, Ltd.		188,755	7	$0.05	1 year from demand	[1]
Total short-term		908,985
Long-term:
Huntington Chase Financial Group		1,103,000	5	$0.05	12/31/2021
E. William Withrow Jr.		894,256	5	$0.05	12/31/2021
John Macey		426,464	4	$0.25	12/31/2023
Total long-term		2,423,720
Total convertible notes payable	$	3,352,705

[1] No demand has been made

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

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Stock Options and Awards: Outstanding and Exercisable Options (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Outstanding and Exercisable Options

Outstanding and Exercisable Options
		Remaining	Exercise Price
	Number of	Contractual Life	times Number		Weighted Average
Exercise Price	Shares	(in years)	of Shares		Exercise Price
$0.005	5,614,663	4.85	$	28,073		$0.16
$0.05	1,250,000	4.90		62,500		$0.04
$0.10	500,000	4.30		50,000		$0.63
$3.20	102,500	1.55		328,000		$3.20
	7,467,163		$	468,573		$1.20

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Stock Options and Awards: Schedule of Stock Options Activity (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Stock Options Activity

Options Activity	Number		Weighted Average
	of Shares		Exercise Price
Outstanding at December 31, 2018	602,500			$2.34
Granted	10,875,133			$0.20
Exercised	(4,010,470	)		($0.16)
Expired / Cancelled	--			--
Outstanding at September 30, 2019	7,467,163			$1.20

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Stock Options and Awards: Schedule of Restricted Stock Awards Activity (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Restricted Stock Awards Activity

Restricted Stock Awards Activity	Number		Deferred
	of Shares		Compensation
Outstanding at December 31, 2018	916,667		$	8,250
Granted	--			--
Vested	(250,000	)		(2,250	)
Forfeited/Canceled	--			--
Outstanding at September 30, 2019	666,667		$	6,000

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Segment Reporting: Schedule of Segment Reporting Information, by Segment (Tables)

9 Months Ended

Sep. 30, 2019

Tables/Schedules

Schedule of Segment Reporting Information, by Segment

	Security Services [1]			Corporate/ Intellectual Property			Consolidated Totals
September 30, 2019
Revenue	$	106,297		$	--		$	106,297
Gross profit		12,002			--			12,002
Operating loss		(4,996	)		(789,213	)		(794,209	)
Depreciation and amortization		--			1,554			1,554
Interest expense		3,952			165,630			169,582
Discount amortization		--			94			94
Unrealized losses		--			(1,206	)		(1,206	)
Total assets		104,584			55,410			159,994
September 30, 2018
Revenue	$	--		$	--		$	--
Gross profit		--			--			--
Operating loss		--			(451,754	)		(451,754	)
Depreciation and amortization		--			354			354
Interest expense		--			152,869			152,869
Discount amortization		--			64,701			64,701
Unrealized losses		--			(2,412	)		(2,412	)
Total assets		--			9,041			9,041

[1] Security Services Segment commenced August 2019.

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Overview and Nature of Business: Going Concern (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Details
Net Loss	$ 488,384	$ 222,173	$ 965,091	$ 671,736
Accumulated Deficit	18,381,919		18,381,919
Working Capital Deficit	$ 4,667,582		$ 4,667,582

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Significant Accounting Policies: Property and Equipment (Details)	Sep. 30, 2019
Minimum
Useful Life (Yrs)	5 years
Maximum
Useful Life (Yrs)	7 years

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Significant Accounting Policies: Intangible Assets (Details)	9 Months Ended
	Sep. 30, 2019
Minimum
Useful Life (Yrs)	4 years
Useful Life (Yrs)	2 years
Maximum
Useful Life (Yrs)	20 years
Useful Life (Yrs)	5 years

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Significant Accounting Policies: Other Comprehensive Income (Loss) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Details
Comprehensive Income (Loss)	$ 1,206	$ 2,412
Comprehensive Income (Loss), Cumulative	$ 4,152	$ 2,946

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Significant Accounting Policies: Other Comprehensive Income (Loss): Comprehensive Income (Loss) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Unrealized Foreign Currency Exchange
Balance	$ 6,703	$ 6,703
Gain (loss)	0	0
Balance	6,703	6,703
Unrealized Securities Gains (Losses)
Balance	(9,649)	(7,237)
Gain (loss)	(1,206)	(2,412)
Balance	(10,855)	(9,649)
AOCI
Balance	(2,946)	(534)
Gain (loss)	(1,206)	(2,412)
Balance	$ (4,152)	$ (2,946)

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Investment in Securities (Details) - OTC:AZFL Common Stock - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Securities, Shares Held	12,061,854		12,061,854
Securities, Unrealized Gain (Loss)	$ 1,206	$ 2,412
Securities, Unrealized Gain (Loss), Cumulative	10,855		$ 9,649
Securities, Fair Value	$ 1,207		$ 2,413

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Property and Equipment: Schedule of Property and Equipment (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Details
Office Equipment	$ 2,362	$ 2,362
Accumulated Depreciation	(2,006)	(1,652)
Property and Equipment, Net	$ 356	$ 710

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Property and Equipment (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Details
Depreciation Expense	$ 354	$ 354

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Intangible Assets: Schedule of Intangible Assets (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Details
Intellectual Property	$ 31,500	$ 31,500
Accumulated Amortization	(1,534)	(334)
Intellectual Property, Net	$ 29,966	$ 31,166

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Intangible Assets (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Details
Amortization Expense	$ 1,200	$ 0

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Accounts Payable and Accrued Expenses: Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Details
Accounts Payable-Vendors	$ 774,766	$ 713,581
Accrued Payroll and Taxes	110,995	80,995
Accrued Interest	1,049,108	897,391
Sales tax payable	10,829	0
Other liabilities	779	779
Total Accounts Payable and Accrued Expenses	$ 1,946,477	$ 1,692,746

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Notes and Loans Payable: Schedule of Notes and Loans Payable (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Details
Loans Payable	$ 44,605	$ 44,605
Notes Payable-Short Term	125,000	125,000
Total Notes and Loans Payable	169,605	169,605
Notes Payable-Short Term-Convertible	500,000	500,000
Total Notes and Loans Payable-Short Term	$ 669,605	$ 669,605

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Notes and Loans Payable: Schedule of Convertible Debt (Details)	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares
Convertible Note, 5%
Principal	$ 500,000
Interest Rate (%)	5.00%
Conversion Rate | $ / shares	$ 0.25
Maturity Date	Dec. 31, 2015
Convertible Note, Total
Principal	$ 500,000

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Notes and Loans Payable: Accrued Interest (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Details
Interest Expense	$ 38,893	$ 60,797
Accrued Interest, To Related Party	0	68,726
Accrued Interest	$ 389,959	$ 351,066

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Related Party Transactions: Schedule of Related Party Transactions (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Details
Notes payable, short term, net of discount	$ 73,904	$ 0
Notes payable, convertible, short-term	908,985	728,985
Notes payable, convertible, long-term, subordinate	2,443,720	2,443,720
Total notes payable	3,426,609	3,172,705
Accrued Compensation	1,038,876	645,555
Reimbursed Expenses and Cash Advances Payable	152,400	152,706
Total Related Party Payable	1,191,276	798,261
Total related party transactions	$ 4,617,885	$ 3,970,966

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Related Party Transactions: Schedule of Convertible Notes Payable-Related Party (Details)	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares
Huntington Chase Financial Group
Convertible Notes Payable, Principal	$ 413,913
Convertible Notes Payable, Interest Rate	7.00%
Convertible Notes Payable, Conversion Price | $ / shares	$ 0.05
Convertible Notes Payable, Maturity	1 year from demand
Huntington Chase LLC
Convertible Notes Payable, Principal	$ 220,000
Convertible Notes Payable, Interest Rate	5.00%
Convertible Notes Payable, Conversion Price | $ / shares	$ 0.05
Convertible Notes Payable, Maturity	12/31/2023
William Nesbitt
Convertible Notes Payable, Principal	$ 86,317
Convertible Notes Payable, Interest Rate	5.00%
Convertible Notes Payable, Conversion Price | $ / shares	$ 0.05
Convertible Notes Payable, Maturity	Funding
Kasper Group, Ltd
Convertible Notes Payable, Principal	$ 188,755
Convertible Notes Payable, Interest Rate	7.00%
Convertible Notes Payable, Conversion Price | $ / shares	$ 0.05
Convertible Notes Payable, Maturity	1 year from demand
Short-term, Total
Convertible Notes Payable, Principal	$ 908,985
Huntington Chase Financial Group
Convertible Notes Payable, Principal	$ 1,103,000
Convertible Notes Payable, Interest Rate	5.00%
Convertible Notes Payable, Conversion Price | $ / shares	$ 0.05
Convertible Notes Payable, Maturity	12/31/2021
Edward W. Withrow Jr
Convertible Notes Payable, Principal	$ 894,256
Convertible Notes Payable, Interest Rate	5.00%
Convertible Notes Payable, Conversion Price | $ / shares	$ 0.05
Convertible Notes Payable, Maturity	12/31/2021
John Macey
Convertible Notes Payable, Principal	$ 426,464
Convertible Notes Payable, Interest Rate	4.00%
Convertible Notes Payable, Conversion Price | $ / shares	$ 0.25
Convertible Notes Payable, Maturity	12/31/2023
Long-term, Total
Convertible Notes Payable, Principal	$ 2,423,720
Convertible Notes, Related Party, Total
Convertible Notes Payable, Principal	$ 3,352,705

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Related Party Transactions (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares
Minimum
Convertible Notes Payable, Interest Rate	5.00%
Convertible Notes Payable, Conversion Price	$ 0.05
Maximum
Convertible Notes Payable, Interest Rate	7.00%
Convertible Notes Payable, Conversion Price	$ 0.25

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Related Party Transactions: Summary (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Related Party Debt, Total
Due to Related Parties, Beginning of Period	$ 3,970,966
Increase (Decrease) During Period, Net	646,919	$ (1,182,536)
Due to Related Parties, End of Period	4,617,885	3,970,966
Loans Payable
Due to Related Parties, Beginning of Period	3,172,705
Increase (Decrease) During Period, Net	255,000	(1,391,569)
Due to Related Parties, End of Period	3,426,609	3,172,705
Accrued Compensation
Due to Related Parties, Beginning of Period	645,555
Increase (Decrease), Accrued Compensation	598,321	548,240
Increase (Decrease), Accrued Compensation, Converted to Note Payable	(205,000)	(419,676)
Increase (Decrease) During Period, Net	393,321	127,564
Due to Related Parties, End of Period	1,038,876	645,555
Reimb Exp/Cash Advances
Due to Related Parties, Beginning of Period	152,706
Increase (Decrease), Payments to Related Parties	(3,587)	0
Increase (Decrease), Cash Advances	3,281	0
Increase (Decrease) During Period, Net	306	0
Due to Related Parties, End of Period	152,400	152,706
Unamortized Discounts
Increase (Decrease) During Period, Net	$ 1,096	$ (81,469)

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Related Party Transactions: Promissory Notes (Details) - Promissory Notes - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Increase (Decrease) During Period, Net	$ 253,904	$ (1,310,100)
Increase (Decrease), Notes Payable	205,000	419,676
Increase (Decrease), Cash Loans to Company	50,000	0
Increase (Decrease), Related to Non-Related Pty	0	188,755
Increase (Decrease), Cancellation of Debt	0	2,000,000
Increase (Decrease), Unamortized Discounts	$ 1,096	$ 81,469

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Related Party Transactions: Accrued Compensation (Details) - Accrued Compensation - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Increase (Decrease), Accrued Compensation	$ 598,321	$ 548,240
Increase (Decrease), Accrued Compensation, Converted to Note Payable	(205,000)	(419,676)
Increase (Decrease), Accrued Compensation, Paid	0	(1,000)
Increase (Decrease) During Period, Net	$ 393,321	$ 127,564

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Related Party Transactions: Reimb Expenses & Cash Advances (Details) - Reimb Exp/Cash Advances - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Increase (Decrease) During Period, Net	$ 306	$ 0
Increase (Decrease), Cash Advances	3,281	0
Increase (Decrease), Payments to Related Parties	$ (3,587)	$ 0

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Related Party Transactions: Accrued Interest (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Details
Accrued Interest, Related Party, Current Period	$ 130,690	$ 215,096
Accrued Interest, Related Party, Paid to Note Holder	13,912	0
Accrued Interest, Related Party	$ 663,103	$ 546,325

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Related Party Transactions: Agreements (Details)	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
David Rocke
Consulting Agreement, Date	May 01, 2019
Consulting Agreement, Term (Yrs)	3
Consulting Agreement, Compensation (Yr)	$ 150,000
Consulting Agreement, Profit Particpation, %	12.50%
Consulting Agreement, Stock Options, Shares | shares	6,875,093
Consulting Agreement, Stock Options, Value	$ 39,875
Consulting Agreement, Stock Options, Exercise Price | $ / shares	$ 0.005
Consulting Agreement, Stock Options, Life (Yrs)	5
Consulting Agreement, Stock Options, Value, Black-Scholes, Exp Term	4.00
Consulting Agreement, Stock Options, Value, Black-Scholes, Volatility	38.58%
Consulting Agreement, Stock Options, Value, Black-Scholes, Risk Free Int Rate	2.15%
Consulting Agreement, Stock Options, Value, Black-Scholes, Dividend Yield	0.00%
Non-Compete Agreement, Date	Aug. 29, 2019
Non-Compete Agreement, Term (Yrs)	5
Non-Compete Agreement, Stock Grant, Shares | shares	6,667,000
Non-Compete Agreement, Stock Grant, Shares, Value	$ 66,670
Non-Compete Agreement, Stock Grant, Shares, Per Share | $ / shares	$ 0.001
Non-Compete Agreement, Non-Dilution, Percent	7.00%
Non-Compete Agreement, Non-Dilution, End Date	May 15, 2019
Michael Gabriele
Consulting Agreement, Date	May 01, 2019
Consulting Agreement, Term (Yrs)	3
Consulting Agreement, Compensation (Yr)	$ 175,000
Consulting Agreement, Profit Particpation, %	12.50%
Consulting Agreement, Stock Options, Shares | shares	2,750,040
Consulting Agreement, Stock Options, Value	$ 15,950
Consulting Agreement, Stock Options, Exercise Price | $ / shares	$ 0.005
Consulting Agreement, Stock Options, Life (Yrs)	5
Consulting Agreement, Stock Options, Value, Black-Scholes, Exp Term	4.00
Consulting Agreement, Stock Options, Value, Black-Scholes, Volatility	38.58%
Consulting Agreement, Stock Options, Value, Black-Scholes, Risk Free Int Rate	2.15%
Consulting Agreement, Stock Options, Value, Black-Scholes, Dividend Yield	0.00%
Non-Compete Agreement, Date	Aug. 29, 2019
Non-Compete Agreement, Term (Yrs)	5
Non-Compete Agreement, Stock Grant, Shares | shares	6,667,000
Non-Compete Agreement, Stock Grant, Shares, Value	$ 66,670
Non-Compete Agreement, Stock Grant, Shares, Per Share | $ / shares	$ 0.001
Non-Compete Agreement, Non-Dilution, Percent	7.00%
Non-Compete Agreement, Non-Dilution, End Date	May 15, 2019
Clive Oosthuizen
Consulting Agreement, Date	Sep. 01, 2019
Consulting Agreement, Term (Yrs)	3
Consulting Agreement, Stock Options, Shares | shares	1,250,000
Consulting Agreement, Stock Options, Value	$ 625
Consulting Agreement, Stock Options, Exercise Price | $ / shares	$ 0.05
Consulting Agreement, Stock Options, Life (Yrs)	5
Consulting Agreement, Stock Options, Value, Black-Scholes, Exp Term	5.75
Consulting Agreement, Stock Options, Value, Black-Scholes, Volatility	41.30%
Consulting Agreement, Stock Options, Value, Black-Scholes, Risk Free Int Rate	1.84%
Consulting Agreement, Stock Options, Value, Black-Scholes, Dividend Yield	0.00%
Consulting Agreement, Issuing Subsidiary	Enigma-Bulwark Risk Management, Inc.
Consulting Agreement, Compensation (Yr 1)	$ 180,000
Consulting Agreement, Compensation (Yr 2)	210,000
Consulting Agreement, Compensation (Yr 3)	240,000
Consulting Agreement, Signing Bonus	$ 25,000
Consulting Agreement, Stock Options, Vest Period (Mos)	36

XML

Related Party Transactions: Stock Issuances (Details) - Rocke/Gabriele - USD ($)	Sep. 20, 2019	Aug. 29, 2019
Stock Issuance, Date	Sep. 20, 2019	Aug. 29, 2019
Stock Issuance, Shares	4,010,470	13,334,000
Stock Issuance, Per Share	$ 0.005	$ 0.001
Stock Issuance, Proceeds	$ 20,052	$ 13,334
Stock Issuance, Non-Dilution Provision, Shares		210,000
Stock Issuance, Non-Dilution Provision, Per Share		$ 0.001
Stock Issuance, Non-Dilution Provision, Proceeds		$ 210

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Capital Stock (Details) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Details
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	25,000,000	25,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares, Outstanding	94,937,223	77,382,753

XML

Capital Stock: Activity (Details) - USD ($)	Sep. 20, 2019	Aug. 29, 2019
Common Stock, Shares
Stock Issuance		$ 13,334,000
Stock Issuance		210,000
Stock Issuance	$ 4,010,470
Common Stock, Value
Stock Issuance		133,340
Stock Issuance		2,100
Common Stock, Per Share
Stock Issuance		0.001
Stock Issuance		0.001
Stock Issuance	0.005
Common Stock, Proceeds
Stock Issuance		13,334
Stock Issuance		210
Stock Issuance	20,052
Paid In Capital
Stock Issuance		$ 121,896
Stock Issuance	$ 16,042

XML

Stock Options and Awards (Details) - shares	Sep. 30, 2019	Dec. 31, 2018
Details
Stock Options, Outstanding	7,467,163	602,500

XML

Stock Options and Awards: Current Period Grants (Details)	Sep. 01, 2019 $ / shares shares	May 15, 2019 $ / shares shares
Details
Stock Options, Grants, Shares | shares	1,250,000	9,625,133
Stock Options, Grants, Value	$ 625	$ 55,825
Stock Options, Grants, Exercise Price	$ 0.05	$ 0.005
Stock Options, Grants, Life (Yrs)	5	5
Stock Options, Value, Black-Scholes, Exp Term	5 years 9 months	4 years
Stock Options, Value, Black-Scholes, Volatility	41.30%	38.58%
Stock Options, Value, Black-Scholes, Risk Free Int Rate	1.84%	2.15%
Stock Options, Value, Black-Scholes, Risk Free Int Rate	0.00%	0.00%
Stock Options, Grants, Vest Term (Mos)	36

XML

Stock Options and Awards: Outstanding and Exercisable Options (Details)	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
$0.005
Stock Options, Number of Outstanding Options | shares	5,614,663
Stock Options, Remaining Contractual Term	4 years 10 months 6 days
Stock Options, Exercise Price x Shares | $	$ 28,073
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.16
$0.05
Stock Options, Number of Outstanding Options | shares	1,250,000
Stock Options, Remaining Contractual Term	4 years 10 months 24 days
Stock Options, Exercise Price x Shares | $	$ 62,500
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.04
$0.10
Stock Options, Number of Outstanding Options | shares	500,000
Stock Options, Remaining Contractual Term	4 years 3 months 18 days
Stock Options, Exercise Price x Shares | $	$ 50,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.63
$3.20
Stock Options, Number of Outstanding Options | shares	102,500
Stock Options, Remaining Contractual Term	1 year 6 months 18 days
Stock Options, Exercise Price x Shares | $	$ 328,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 3.20

XML

Stock Options and Awards: Schedule of Stock Options Activity (Details) - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Stock Options, Outstanding	602,500
Stock Options, Granted	10,875,133	500,000
Stock Options, Outstanding	7,467,163	602,500
Stock Options
Stock Options, Outstanding	602,500
Stock Options, Granted	10,875,133
Stock Options, Exercised	(4,010,470)
Stock Options, Expired/Canceled	0
Stock Options, Outstanding	7,467,163	602,500
Weighted Average Exercise Price
Stock Options, Outstanding	2.34
Stock Options, Granted	0.20
Stock Options, Exercised	(0.16)
Stock Options, Expired/Canceled	0
Stock Options, Outstanding	1.20	2.34

XML

Stock Options and Awards: Deferred Compensation (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2019 USD ($) shares	Dec. 31, 2018 USD ($) shares
Details
Stock Options, Granted | shares	10,875,133	500,000
Stock Options, Granted, Deferred Compensation	$ 56,450	$ 0
Stock Options, Granted, Deferred Compensation, Expense	23,313	0
Stock Options, Granted, Deferred Compensation, Balance	$ 33,137	$ 0
Stock Options, Remaining Amortization Period (Mos)	33

XML

Stock Options and Awards: Restricted Stock Awards (Details)	9 Months Ended		12 Months Ended
	Sep. 30, 2019 USD ($) shares	Sep. 30, 2018	Dec. 31, 2018 USD ($) shares
Details
Restricted Stock Award, Granted, Shares | shares	0		1,000,000
Restricted Stock Award, Granted, Value	$ 0		$ 9,000
Restricted Stock Award, Granted, Cost	$ 0		$ 1,000
Restricted Stock Award, Vested, Shares | shares	250,000		83,333
Restricted Stock Award, Vested, Value	$ 2,250		$ 750
Restricted Stock Award, Unvested, Shares | shares	666,667		916,667
Restricted Stock Award, Unvested, Deferred Compensation	$ 6,000		$ 8,250
Restricted Stock Award, Remaining Amortization Period (Mos)		24

XML

Stock Options and Awards: Schedule of Restricted Stock Awards Activity (Details)	9 Months Ended
	Sep. 30, 2019 shares
Restricted Stock Award
Restricted Stock Awards, Outstanding	916,667
Restricted Stock Awards, Granted	0
Restricted Stock Awards, Vested	(250,000)
Restricted Stock Awards, Forfeited/Canceled	0
Restricted Stock Awards, Outstanding	666,667
Deferred Compensation
Restricted Stock Awards, Outstanding	8,250
Restricted Stock Awards, Granted	0
Restricted Stock Awards, Vested	(2,250)
Restricted Stock Awards, Forfeited/Canceled	0
Restricted Stock Awards, Outstanding	6,000

XML

Segment Reporting: Schedule of Segment Reporting Information, by Segment (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Security Services
Revenue	$ 106,297	$ 0
Gross profit	12,002	0
Operating loss	(4,996)	0
Depreciation and amortization	0	0
Interest expense	3,952	0
Discount amortization	0	0
Unrealized losses	0	0
Total assets	104,584	0
Corporate/ Intellectual Property
Revenue	0	0
Gross profit	0	0
Operating loss	(789,213)	(451,754)
Depreciation and amortization	1,554	354
Interest expense	165,630	152,869
Discount amortization	94	64,701
Unrealized losses	(1,206)	(2,412)
Total assets	55,410	9,041
Consolidated
Revenue	106,297	0
Gross profit	12,002	0
Operating loss	(794,209)	(451,754)
Depreciation and amortization	1,554	354
Interest expense	169,582	152,869
Discount amortization	94	64,701
Unrealized losses	(1,206)	(2,412)
Total assets	$ 159,994	$ 9,041

XML

Subsequent Events (Details)	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
Related Party Transactions
Related Party Loans, Beginning, Date	Oct. 01, 2019
Related Party Loans, Increase	$ 1,386,983
Related Party Loans, Total, Beginning	4,617,885
Related Party Loans, Total, Ending	$ 6,004,868
Related Party Loans, Ending, Date	Dec. 31, 2022
Related Party Loans, Increase, Promissory Notes, Total	$ 2,062,562
Related Party Loans, Increase, Promissory Notes, From Non-Related Party	110,995
Related Party Loans, Decrease, Promissory Notes, To Non-Related Party	426,464
Related Party Loans, Increase, Promissory Notes, From Accrued Compensation	3,764,845
Related Party Loans, Increase, Promissory Notes, BCF Discounts	1,051,304
Related Party Loans, Decrease, Promissory Notes, Unamortized Discounts	741,522
Related Party Loans, Decrease, Promissory Notes, Payments for Stock	4,500
Related Party Loans, Decrease, Promissory Notes, Conversion to Stock	521,557
Related Party Loans, Decrease, Promissory Notes, Payments to Related Parties	549,975
Related Party Loans, Increase, Accrued Compensation, Total	560,153
Related Party Loans, Increase, Accrued Compensation	3,321,164
Related Party Loans, Decrease, Accrued Compensation, To Promissory Notes	3,764,845
Related Party Loans, Decrease, Accrued Compensation, To Non-Related Party	55,000
Related Party Loans, Decrease, Accrued Compensation, Payments for Stock	5,500
Related Party Loans, Decrease, Accrued Compensation, Payments To Related Parties	55,972
Related Party Loans, Increase, Reimb Exps and Cash Advances	$ 115,426
Related Party Transactions | Minimum
Related Party Loans, Interest Rates	5
Related Party Loans, Convertible Notes Payable, Conversion Price | $ / shares	$ 0.05
Related Party Transactions | Maximum
Related Party Loans, Interest Rates	7
Related Party Loans, Convertible Notes Payable, Conversion Price | $ / shares	$ 0.25
Consulting Agreement
Subsequent Event, Date	Oct. 01, 2019
Consulting Agreement, Term (Yrs)	3
Consulting Agreement, Compensation (Yr)	$ 100,000
Consulting Agreement, Stock Award, Shares | shares	1,000,000
Consulting Agreement, Stock Award, Shares, Value	$ 10,000
Consulting Agreement, Stock Award, Per Share | $ / shares	$ 0.001
Stock Issuance
Subsequent Event, Date	Oct. 01, 2019
Stock Issuance, Shares | shares	1,000,000
Stock Issuance, Per Share | $ / shares	$ 0.001
Stock Issuance, Proceeds	$ 1,000
Stock Issuance
Subsequent Event, Date	Oct. 06, 2019
Stock Issuance, Shares | shares	6,000,000
Stock Issuance, Per Share | $ / shares	$ 0.001
Stock Issuance, Proceeds	$ 6,000
Stock Issuance, Value	$ 60,000
Non-Compete Agreement
Subsequent Event, Date	Oct. 10, 2019
Non-Compete Agreement, Term (Yrs)	5
Non-Compete Agreement, Stock Grant, Shares | shares	4,000,000
Non-Compete Agreement, Stock Grant, Shares, Value	$ 360,000
Non-Compete Agreement, Stock Grant, Shares, Per Share | $ / shares	$ 0.001
Non-Compete Agreement, Non-Dilution, Percent	4.50%
Stock Issuance
Subsequent Event, Date	Oct. 10, 2019
Stock Issuance, Shares | shares	4,000,000
Stock Issuance, Per Share | $ / shares	$ 0.001
Stock Issuance, Proceeds	$ 4,000
Stock Issuance
Subsequent Event, Date	Dec. 20, 2019
Stock Issuance, Shares | shares	802,094
Stock Issuance, Per Share | $ / shares	$ 0.005
Stock Issuance, Proceeds	$ 4,010
Joint Venture
Subsequent Event, Date	Sep. 08, 2020
Joint Venture, Minority	Enigma-Bulwark Risk Management, Inc.
Joint Venture, Majority	Prime African Security, Ltd
Joint Venture, Name	Prime Enigma Africa (Pty) Ltd.
Joint Venture, Majority, %	51.00%
Joint Venture, Minority, %	49.00%
Joint Venture, Term (Yrs)	3
Stock Issuance
Subsequent Event, Date	Aug. 31, 2021
Stock Issuance, Shares | shares	23,066,991
Stock Issuance, Conversion of Debt, Total	$ 1,238,251
Stock Issuance, Conversion of Debt, Amount	$ 941,096
Stock Issuance, Conversion of Debt, Conversion Price | $ / shares	$ 0.05
Stock Issuance, Conversion of Debt, Amount	$ 297,155
Stock Issuance, Conversion of Debt, Conversion Price | $ / shares	$ 0.07
Stock Issuance
Subsequent Event, Date	Nov. 05, 2021
Stock Issuance, Shares | shares	2,785,205
Stock Issuance, Conversion of Debt, Amount	$ 696,301
Stock Issuance, Conversion of Debt, Conversion Price | $ / shares	$ 0.25
Stock Issuance
Subsequent Event, Date	Jan. 01, 2022
Stock Issuance, Shares | shares	2,500,000
Stock Issuance, Per Share | $ / shares	$ 0.001
Stock Issuance, Proceeds	$ 2,500