MassRoots, Inc. (Form: 8-K, Received: 01/27/2017 16:02:28)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

January 27, 2017 (January 25, 2017)

Date of Report (Date of earliest event reported)

MassRoots, Inc.

(Exact name of registrant as specified in its charter)

Delaware

000-55431

46-2612944

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

1624 Market Street, Suite 201, Denver, CO

80202

(Address of principal

executive offices)

(Zip Code)

(720) 442-0052

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01

Completion of Acquisition or Disposition of Assets

As previously announced, on December 15, 2016, MassRoots, Inc. (“MassRoots” or the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Whaxy Inc., a wholly-owned subsidiary of the Company (“Merger Subsidiary”), DDDigtal Inc, a Colorado corporation (“DDDigtal”), Zachary Marburger, an individual acting solely in his capacity as Stockholder Representative, and all of the stockholders of DDDigtal. Pursuant to the Merger Agreement, the parties agreed to merge Merger Subsidiary with and into DDDigtal, whereby DDDigtal would survive as a wholly-owned subsidiary of MassRoots (the “Merger”).

On January 25, 2017 (the “Effective Date”), the Merger was completed and became effective upon the filing of certificates of merger with the respective Secretary of State of the States of Delaware and Colorado, in such forms as required by, and executed in accordance with, the relevant provisions of the Delaware General Corporation Law and the Colorado Business Corporation Act. Copies of the certificates of merger are filed as Exhibit 3.1 and Exhibit 3.2 hereto, and are hereby incorporated by reference into this Item 2.01.

Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.001 per share (“Common Stock”), and, immediately prior to the Effective Date, DDDigtal’s authorized capital stock consisted of 15,433,03 shares of common stock, no par value per share, and Merger Subsidiary’s authorized capital stock consisted of 1,000 shares of common stock, par value $1.00 per share. Immediately prior to the Effective Date, there were 76,055,644 shares of our common stock issued and outstanding, 15,433,036 shares of DDDigtal’s common stock issued and outstanding, and 1 share of Merger subsidiary’s common stock issued and outstanding. Upon completion of the Merger, and as of the Effective Date, there were 78,982,473 shares of our common stock issued and outstanding.

Pursuant to the terms of the Merger Agreement, each share of DDDigtal’s common stock was to be exchanged for a number of shares of MassRoots’ Common Stock (or a fraction thereof), based on an exchange ratio, as ultimately calculated, equal to approximately 5.273-for-1, such that 1 share of MassRoots’ Common Stock was issued for every 5.273 shares of DDDigtal’s common stock.

On the Effective Date, the Company issued 2,926,829 shares of Common Stock pro rata to all stockholders of DDDigtal (the “Share Consideration”) in exchange for all of their shares of DDDigtal’s common stock. At the same time, each share of the common stock of Merger Subsidiary was converted into and exchanged for one share of common stock of DDDigtal held by the Company, and all shares of DDDigtal common stock outstanding immediately prior to the Effective Date automatically cancelled and retired. DDDigtal continued as a surviving wholly-owned subsidiary of Massroots, and Merger Subsidiary ceased to exist.

Also pursuant to the terms of the Merger Agreement, MassRoots paid cash consideration of $40,000 to Zachary Marburger and $20,000 to Micah Davidson, as repayment of outstanding debts owed by DDDigtal to the individuals.

As a condition to the closing of the Merger, the Company hired Zachary Marburger as its new Vice President of Strategy, and engaged Micah Davidson as a Senior Software Engineer. As a condition of Mr. Marburger’s employment and pursuant to the Merger Agreement, the Company will pay Mr. Marburger an additional $40,000 following the one-year anniversary of his constant employment with MassRoots.

As an additional condition to the closing of the Merger, each stockholder of DDDigtal entered into a lock-up agreement with the Company, thereby prohibiting each such stockholder from offering, selling, contracting to sell, pledging, giving, donating, transferring or otherwise disposing of, directly or indirectly, any shares of Common Stock obtained as Share Consideration for a period of six (6) months following the Effective Date (each, a “Lock-Up Agreement”).

The foregoing is only brief description of the Merger Agreement and Lock-Up Agreement, which are filed as Exhibit 2.1 and Exhibit 10.1 to this Current Report on Form 8-K, respectively, and incorporated herein by reference, and both are qualified in their entirety by reference to such exhibit. Additional information and disclosures concerning the Merger and the Merger Agreement can be found in the Company’s Current Report on Form 8-K, filed with the SEC on December 16, 2016.

Prior to the consummation of the Merger, Denver Relief Consulting LLC beneficially owned less than 5% of both the issued and outstanding shares of DDDigtal’s common stock and MassRoot’s Common Stock. Ean Seeb, a director of MassRoots, holds a 1/3 equity interest in Denver Relief Consulting LLC through his wholly owned company, Sababa Corporation, and thereby is deemed to have indirect beneficial ownership of all such shares held by Denver Relief Consulting LLC. Mr. Seeb abstained from participating and voting as a member of the Board of Directors of MassRoots on all matters pertaining to the Merger Agreement. Except as noted above, there was no material relationship between the Company or its affiliates and either DDDigtal or a source of funds used for the Merger, prior to entering into the Merger Agreement.

DDDigtal’s financial statements and pro forma information can be found in Item 9.01 below, which is incorporated by reference into this Item 2.01.

Item 9.01

Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The audited financial statements of DDDigtal of December 31, 2015, and the notes to the audited financial statements, are filed as Exhibit 99.1 hereto, and are hereby incorporated by reference into this Item 9.01.

The unaudited financial statement of DDDigtal as of September 30, 2016, and the notes to the unaudited financial statements, are filed as Exhibit 99.2 hereto, and are hereby incorporated by reference into this Item 9.01.

(b) Pro forma financial information.

The unaudited pro forma condensed combined balance sheet as of September 30, 2016, and the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2015 and the nine months ended September 30, 2016 are filed as Exhibit 99.3 hereto, and are hereby incorporated by reference into this Item 9.01.

(d) Exhibits.

The documents set forth below are filed herewith.

2.1

Agreement and Plan of Merger, dated December 15, 2016, by and between MassRoots, Inc., Whaxy Inc., DDDigtal Inc., Zachary Marburger and the stockholders of DDDigtal Inc. (1)

3.1

State of Delaware Certificate of Merger of Domestic Corporation Into Foreign Corporation, for Whaxy Inc. and DDDigtal Inc., effective as of January 25, 2017.

3.2

State of Colorado Statement of Merger for Whaxy Inc. and DDDigtal Inc., effective as of January 25, 2017.

10.1

Form of Lock-Up Agreement by and between MassRoots, Inc. and each stockholder of DDDigtal Inc.

99.1

Audited Financial Statements of DDDigtal LLC for the Year-Ended December 31, 2015, and related notes. *

99.2

Unaudited Financial Statements of DDDigtal LLC for the Nine Months Ended September 30, 2016, and related notes. *

99.3

Pro Forma Financial Statements for DDDigtal LLC and MassRoots, Inc. *

(1)

Incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by MassRoots, Inc. on December 16, 2016.

* DDDigtal LLC, a Colorado limited liability company, was converted into DDDigtal Inc, a Colorado corporation, on November 28, 2016.

SIGNATURES

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

	MassRoots, Inc.

Date: January 27, 2017	By:	/s/ Isaac Dietrich
		Isaac Dietrich
		Chief Executive Officer

EXHIBIT 3.1

STATE OF DELAWARE

CERTIFICATE OF MERGER OF

DOMESTIC CORPORATION INTO

FOREIGN CORPORATION

Pursuant to Title 8, Section 252 of the Delaware General Corporation Law, the undersigned corporation executed the following Certificate of Merger:

FIRST :

The name of each constituent corporation is DDDigtal, Inc, a Colorado corporation and Whaxy Inc., a Delaware corporation.

SECOND :

The Agreement and Plan of Merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations pursuant to Title 8, Section 252.

THIRD :

The name of the surviving corporation is DDDigtal, Inc, a Colorado corporation.

FOURTH :

The Certificate of Incorporation of the surviving corporation shall be its Certificate of Incorporation.

FIFTH :

The merger is to become effective on January 25, 2017 at 12:01 a.m.

SIXTH :

The Agreement of Merger is on file at 1624 Market Street, Suite 201, Denver, CO 80202, the place of business of the surviving corporation.

SEVENTH :

A copy of the Agreement of Merger will be furnished by the surviving corporation on request, without cost, to any stockholder of the constituent corporations.

EIGHTH :

The surviving corporation agrees that it may be served with process in the State of Delaware in any proceeding for enforcement of any obligation of the surviving corporation arising from this merger, including any suit or other proceeding to enforce the rights of any stockholders as determined in appraisal proceedings pursuant to the provisions of Section 262 of the Delaware General Corporation Laws, and irrevocably appoints the Secretary of State of Delaware as its agent to accept services of process in any such suit or proceedings. The Secretary of State shall mail any such process to the surviving corporation at 1624 Market Street, Suite 201, Denver, CO 80202.

IN WITNESS WHEREOF , said surviving corporation has caused this certificate to be signed by an authorized officer, the 24th day of January 2017.

By: /s/ Isaac Dietrich

Name: Isaac Dietrich

Title: Authorized Representative

EXHIBIT 3.2

Statement of Merger

(Surviving Entity is a Domestic Entity)

filed pursuant to § 7-90-203.7 of the Colorado Revised Statutes (C.R.S.)

1. For each merging entity, its ID number (if applicable), entity name or true name, form of entity, jurisdiction under the law of which it is formed, and principal address are:

ID Number _______________________________

Entity name or true name Whaxy Inc.

Form of entity For Profit Corporation

Jurisdiction Delaware

Street address 1624 Market Street, Suite 201

Denver CO 80202

Mailing address ________________________________

( leave blank if same as street address) _________________________

______________________________________________________

[ ]

(If the following statement applies, adopt the statement by marking the box and include an attachment.)

There are more than three merging entities and the ID number (if applicable), entity name or true name, form of entity, jurisdiction under the law of which it is formed, and the principal address of each additional merging entity is stated in an attachment.

2. For the surviving entity, its entity ID number (if applicable), entity name or true name, form of entity, jurisdiction under the law of which it is formed, and principal address are:

ID Number 20151102604

Entity name or true name DDDigtal, Inc.

Form of entity For Profit Corporation

Jurisdiction Colorado

Street address 520 W. Erie Street, Suite 220

Chicago IL 60654

Mailing address ________________________________

( leave blank if same as street address) _________________________

______________________________________________________

3. Each merging entity has been merged into the surviving entity.

4 . (If the following statement applies, adopt the statement by marking the box.)

[ ]

The plan of merger provides for amendments to a constituent filed document of the surviving entity and an appropriate statement of change or other document effecting the amendments will be delivered to the Secretary of State for filing pursuant to Part 3 of Article 90 of Title 7, C.R.S.

5. (If the following statement applies, adopt the statement by marking the box and state the appropriate document number(s).)

[ ]

One or more of the merging entities is a registrant of a trademark described in a filed document in the records of the secretary of state and the document number of each filed document is

Document number ___________________________
Document number ___________________________
Document number ___________________________

(If the following statement applies, adopt the statement by marking the box and include an attachment.)

There are more than three trademarks and the document number of each additional trademark is stated in an attachment.

6. (If applicable, adopt the following statement by marking the box and include an attachment.)

[ ]

This document contains additional information as provided by law.

7. ( Caution: Leave blank if the document does not have a delayed effective date. Stating a delayed effective date has significant legal consequences. Read instructions before entering a date.)

(If the following statement applies, adopt the statement by entering a date and, if applicable, time using the required format.)

The delayed effective date and, if applicable, time of this document are 01/25/2017 12:01 a.m.

(mm/dd/yyyy hour:minute am/pm)

Notice:

Causing this document to be delivered to the Secretary of State for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that such document is such individual's act and deed, or that such individual in good faith believes such document is the act and deed of the person on whose behalf such individual is causing such document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S. and, if applicable, the constituent documents and the organic statutes, and that such individual in good faith believes the facts stated in such document are true and such document complies with the requirements of that Part, the constituent documents, and the organic statutes.

This perjury notice applies to each individual who causes this document to be delivered to the Secretary of State, whether or not such individual is identified in this document as one who has caused it to be delivered.

8. The true name and mailing address of the individual causing this document to be delivered for filing are:

Marburger Zachary

520 W. Erie Street, Suite 220

Chicago IL 60654

[ ]

This document contains the true name and mailing address of one or more additional individuals causing the document to be delivered for filing.

EXHIBIT 10.1

MASSROOTS, INC.

LOCK-UP AGREEMENT

THIS LOCK-UP AGREEMENT (the “ Agreement ”) is made as of [ ] by and between MassRoots Inc., a Delaware corporation, (the “ Company ”), and the undersigned holder of common stock (the “ Shareholder ”) of the Company.

WHEREAS , pursuant to an Agreement and Plan of Merger between the Company, DDDigtal Inc, Whaxy Inc., Zachary Marburger and the shareholders of DDDigtal Inc, dated [ ], DDDigtal Inc became a wholly-owned subsidiary of the Company (the “ Merger Agreement ”, and the consummation of the transactions contemplated thereby, the “ Merger ”), and in exchange for the Shareholder’s shares of common stock of DDDigtal Inc, the Shareholder acquired that number of shares the Company’s common stock, par value $0.001 per share (“ Common Stock ”), set forth on the signature page hereto (such shares, the “ Acquired Shares ”); and

WHEREAS , a condition of the Merger Agreement, every shareholder of DDDigtal Inc was required to enter into this Agreement to lock-up all of each such shareholder’s Acquired Shares for a period of six (6) months following the date the Merger becomes effective (the “ Effective Date ”),.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the undersigned Shareholder agree as follows:

1. Six Month Prohibition on Sales or Transfers . The Shareholder hereby agrees that for a period of six (6) months from the Effective Date (the “ Lock-Up Period ”), the Shareholder will not (a) offer, sell, contract to sell, pledge, give, donate, transfer or otherwise dispose of, directly or indirectly, any Acquired Shares, (b) enter into a transaction which would have the same effect, or (c) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic or voting consequences of ownership of such securities, whether any such aforementioned transaction is to be settled by delivery of the Acquired Shares or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement.

2. Reference to Shareholder . Any reference in this Agreement to the Shareholder shall include any legal entity, including any corporation, limited liability company, partnership, not-for-profit corporation, estate planning vehicle or trust, which is directly or indirectly owned or controlled by, under common control with, or in control of the Shareholder, including any such entity where such Shareholder is deemed to be a beneficial owner.

3. Attempted or Requested Transfers . Any attempted or purported sale or other transfer of any Acquired Shares by the Shareholder in violation or contravention of the terms of this Agreement shall be null and void ab initio. The Company shall be entitled to instruct its transfer agent to reject and refuse to transfer on its books any Acquired Shares that may have been attempted to be sold or otherwise transferred in violation or contravention of any of the provisions of this Agreement and shall not recognize any person or entity who is the purported transferee of such shares.

4. Broker Authorization . The Shareholder hereby authorizes any and all brokers, for all accounts holding the Shareholder’s Acquired Shares, to provide directly to the Company, immediately upon the Company’s request, a copy of all account statements showing the Acquired Shares and confirming no trading activity in the Acquired Shares during the Lock-Up Period.

5. Waiver of Claims . The Shareholder hereby irrevocably waives any and all known or unknown claims and rights, whether direct or indirect, fixed or contingent, that the Shareholder may now have or that may hereafter arise against the Company or any of its affiliates, or any of its respective officers, directors, stockholders, employees, agents, attorneys or advisors arising out of the negotiation or documentation of this Agreement.

6. Legends on Certificates . All Acquired Shares shall be subject to the provisions of this Agreement, regardless of whether such Acquired Shares bear a legend to this effect, and to the extent that any certificates representing Acquired Shares are issued during the Lock-Up Period, such Acquired Shares may, as determined in the Company’s sole discretion, bear legends as follows (or in substantially similar form):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED FOR VALUE UNLESS THEY ARE REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS THE CORPORATION RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO IT, OR OTHERWISE SATISFIES ITSELF, THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

THE SALE, ASSIGNMENT, GIFT, BEQUEST, TRANSFER, DISTRIBUTION, PLEDGE, HYPOTHECATION OR OTHER ENCUMBRANCE OR DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY AND MAY BE MADE ONLY IN ACCORDANCE WITH THE TERMS OF A LOCK-UP AGREEMENT, A COPY OF WHICH MAY BE EXAMINED AT THE OFFICE OF THE CORPORATION.

7. Representations and Warranties . The Shareholder hereby represents and warrants that:

(a) It has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder;

(b) The execution of this Agreement by the individual whose signature is set forth at the end of this Agreement on behalf of the Shareholder, and the delivery of this Agreement by such person, has been duly authorized by all necessary actions on the part of the Shareholder;

(c) This Agreement has been executed and delivered by the Shareholder and constitutes the legal, valid and binding obligation of the Shareholder, enforceable against the Shareholder in accordance with its terms; and

(d) It had the opportunity to be represented by legal counsel and other advisors selected by Shareholder in connection with this Agreement, and that the Shareholder has reviewed this Agreement with his, her or its legal counsel and other advisors and understands the terms and conditions hereof.

8. Miscellaneous .

(a) This Agreement constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

(b) The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement.

(c) This Agreement will be binding upon and inure to the benefit of the Company, its successors and assigns and to the Shareholder and their respective permitted heirs, personal representatives, successors and assigns.

(d) This Agreement is governed by, and construed in accordance with, the laws of the State of Colorado, without regard to the conflict of laws provisions of such State.

(e) The parties hereto acknowledge that money damages are not an adequate remedy for violations of this Agreement and that any Party may, in such Party’s sole discretion, apply to any court of competent jurisdiction for specific performance or injunctive relief or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each Party hereto waives any objection to the imposition of such relief. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof, whether at law or in equity, shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any Party hereto shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such Party.

(f) All notices, requests, demands, claims and other communications hereunder shall be in writing and shall be delivered by certified or registered mail (first class postage pre-paid), guaranteed overnight delivery, or email transmission if such transmission is confirmed, by certified or registered mail (first class postage pre-paid) or guaranteed overnight delivery, to the addresses set forth on the signature page hereto (or to such other addresses which such Party shall subsequently designate in writing to the other Party).

(g) This Agreement may be executed in any number of counterparts and by electronic transmission, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF , the undersigned Parties have caused this Agreement to be duly executed by their respective authorized signatories as of the date first set forth above.

THE COMPANY:

MASSROOTS, INC.

By: _______________________________

Isaac Dietrich

Chief Executive Officer

Address: ____________________________

Email: _________________________________

SHAREHOLDER:

_______________________________________

(entity name, if applicable)

By: ___________________________________

Name: __________________________________

Title: ___________________________________

Acquired Shares: ___________________________

Address: _______________________________

Email: ___________________________________

EXHIBIT 99.1

DDDIGTAL LLC

FINANCIAL STATEMENTS

DECEMBER 31, 2015

INDEX TO FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm	2

Balance Sheet as of December 31, 2015	3

Statement of Operations and Members’ Deficit from February 12, 2015 (date of inception) through December 31, 2015	4

Statement of Cash Flows from February 12, 2015 (date of inception) through December 31, 2015	5

Notes to Financial Statements	6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
DDDigtal, LLC

We have audited the accompanying balance sheet of DDDigtal, LLC (“the Company”) as of December 31, 2015 and the related statements of operations, members’ deficit, and cash flows for the period from February 12, 2015 (date of inception) through December 31, 2015 . These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of DDDigtal, LLC as of December 31, 2015, and the results of its operations and its cash flows for the period from February 12, 2015 (date of inception) through December 31, 2015 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses from operations since its inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Liggett & Webb P.A.

December 22, 2016

New York, New York

DDDIGTAL LLC

BALANCE SHEET

DECEMBER 31, 2015

ASSETS
Current assets:
Cash	$ 11,379
Accounts receivable	5,500
Total current assets	16,879

Property and equipment, net	6,338

Total assets	$ 23,217

LIABILITIES AND MEMBERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$ 42,223
Deferred revenue	12,000
Loans from members	24,588
Total current liabilities	78,811

Commitments and contingencies	-

Members' deficit	(55,594)

Total liabilities and members' deficit	$ 23,217

The accompanying notes are an integral part of these financial statements

DDDIGTAL LLC

STATEMENT OF OPERATIONS AND MEMBERS' DEFICIT

	From February 12, 2015
	(Date of inception)
	Through
	December 31, 2015
REVENUE
Services	$ 117,609

OPERATING EXPENSES:
Advertising	35,540
Salaries and wages	146,533
Professional fees	128,745
Other general and administrative	67,060
Depreciation	1,325
Total operating expenses	379,203

NET LOSS	$ (261,594)

Members' equity-beginning of period	-

Contributions	206,000

Net loss	(261,594)

Member deficit-end of period	$ (55,594)

The accompanying notes are an integral part of these financial statements

DDDIGTAL LLC

STATEMENT OF CASH FLOWS

	From February 12, 2015
	(Date of inception)
	Through
	December 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (261,594)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation	1,325
Changes in operating assets and liabilities:
Accounts receivable	(5,500)
Accounts payable and accrued expenses	42,223
Deferred revenue	12,000
Net cash used in operating activities	(211,546)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment	(7,663)
Net cash used in investing activities	(7,663)

CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions by owners	206,000
Proceeds from member loans	24,588
Net cash provided by financing activities	230,588

Net increase in cash	11,379

Cash-beginning of period	-
Cash-end of period	$ 11,379

Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$ -
Taxes	$ -

The accompanying notes are an integral part of these financial statements

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

DDDigtal, LLC (the “Company”) was organized as a limited liability company under the laws of the State of Colorado on February 12, 2015. In connection with the potential merger with Massroots, Inc., the Company converted into a Colorado corporation and changed its name from DDDigtal LLC to DDDigtal Inc. This conversion was effective November 28, 2016. Any reference to the “Company” in the accompanying financial statements or these notes to the financial statements shall also be a reference to DDDigtal Inc, as converted.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for annual financial statements.

The Company provides enterprises custom website development for legal cannabis businesses under the software name “Whaxy”.

NOTE 2 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

As of December 31, 2015, the Company had cash of $11,379 and a working capital deficit of $61,932. From February 12, 2015 (date of inception) through December 31, 2015, the Company used net cash in operating activities of $211,546. The Company has not yet generated any significant revenues, and has incurred net losses since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

From February 12, 2015 (date of inception) through December 31, 2015, the Company raised $206,000 in cash proceeds from contributions from members. Subsequent to December 31, 2015, the Company’s raised $134,000 from equity contributions.

The Company's primary source of operating funds since inception has been cash proceeds from equity contributions. The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

Accordingly, the accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Revenue recognition

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts.

The Company typically uses the completed contract method for website development services, which typically have construction periods of 60 days or less. Contracts are considered complete when title has passed and the customer has accepted the product. The Company defers any revenue for which the product has not been delivered or services have not been rendered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or services have been rendered or no refund will be required.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include revenue recognition and the recoverability of long-lived assets. Actual results may differ from these estimates.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable.

One customer accounted for 100% of the Company's total accounts receivable at December 31, 2015

The Company had two customers accounting for 32.4%, and 17.4%; (total of 49.8%) of total revenues from February 12, 2015 through December 31, 2015.

Cash

Cash consist of cash held in bank demand deposits. The Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents.

The Company maintains cash in bank accounts located in the United States, which, at times, may exceed federally insured limits or be uninsured. The Company has not experienced any losses in such accounts.

Accounts Receivable

Accounts receivable primarily consists of trade receivables, net of allowances. On a periodic basis, the Company evaluates its trade receivables and establishes an allowance for doubtful accounts based on its history of past bad debt expense, collections and current credit conditions. The Company performs on-going credit evaluations of its customers and the customer’s current credit worthiness. Collections and payments from customers are continuously monitored. The Company maintains an allowance for doubtful accounts, which is based upon historical experience as well as specific customer collection issues that have been identified. As of December 31, 2015, the Company’s allowance for doubtful accounts was $-0-. If the financial condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required in future periods.

Property and Equipment

Property and equipment consists of office equipment and is recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which for computer and office equipment is three and five years, respectively. Expenditures for major renewals and betterments that extend the useful lives of the property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Advertising

The Company's advertising costs are expensed as incurred. Advertising expense was $35,540 from February 12, 2015 (date of inception) through December 31, 2015.

Income taxes

The Company has elected to be treated under the Internal Revenue Code as a Limited Liability Company (LLC). As a limited liability company, the Company’s taxable income or loss is allocated to members in accordance with their respective percentage ownership.

Segment information

Accounting Standards Codification (“ASC”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The Company applies the management approach to the identification of our reportable operating segment as provided in accordance with ASC. The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2015. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts receivables and accounts payable. Fair values were assumed to approximate carrying values for cash, accounts receivables and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Recent Accounting Pronouncements

In August 2014, FASB issued ASU 2014-15, Presentation of Financial Statements Going Concern, which provides guidance to reduce diversity in the timing and content of footnote disclosures. The amendment requires management to assess the Company’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The Company has to define the term of substantial doubt, which has to be evaluated every reporting period including interim periods. Management has to provide principles for considering the mitigating effect of its plan, and disclose when substantial doubt is alleviated as well as when it is not alleviated. The Company is required to assess management’s plan for a period of one year after the financial statements are issued (or available to be issued). The amendment is effective for annual periods ending after December 15, 2016. Early adoption is permitted. The Company is currently assessing the impact of implementing the new guidance.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, which creates ASC 606, Revenue from Contracts with Customers , and supersedes the revenue recognition requirements in ASC 605, Revenue Recognition , including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, ASU 2014-09 supersedes the cost guidance in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts, and creates new Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers . In summary, the core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early application is not permitted. Therefore, the amendments in ASU 2014-09 will become effective for the Company as of the beginning of the 2017 fiscal year. The Company is currently assessing the impact of adoption.

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

NOTE 4 – PROPERTY AND EQUIPMENT

The Company has property and equipment that consist of computers and related accessories, and office furniture. The depreciation is calculated using the straight line method over the life of the property. All property has a useful life of 3 to 5 years.

The following table summarizes these assets as of December 31, 2015:

Computer equipment	$	5,988
Office equipment		1,675
		7,663
Accumulated Depreciation		1,325
	$	6,338

From February 12, 2015 through December 31, 2015, depreciation expense charged to operations was $1,325.

NOTE 5 – COMMITMENTS AND CONTINGENCIES

Operating leases

The Company leased office space on a month to month basis in Denver, Colorado for its corporate use. Total lease rental expenses from February 12, 2015 (date of inception) through December 31, 2015 were $13,650.

Litigation

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

NOTE 6 – RELATED PARTY TRANSACTIONS

Loans from members in the amount of $24,588 at December 31, 2015 consist of non-interest bearing working capital advances and expense reimbursements due to one of the Company’s members.

NOTE 7 – SUBSEQUENT EVENTS

In accordance with the requirements of ASC 855, Subsequent Events, the Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued.

Subsequent to December 31, 2015, the Company’s raised $134,000 from equity contributions.

On November 28, 2016, the Company converted into a Colorado corporation and changed its name from DDDigtal LLC to DDDigtal Inc. This conversion was effective November 28, 2016.

On December 15, 2016, the Company, Zachary Marburger and all of the stockholders of the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MassRoots, Inc. (“MassRoots”) and Whaxy Inc., a wholly-owned subsidiary of MassRoots (“Merger Subsidiary”). Pursuant to the Merger Agreement, Merger Subsidiary will be merged with and into the Company, whereby the separate corporate existence of Merger Subsidiary will cease and the Company will survive (the “Surviving Entity”) as a wholly-owned subsidiary of MassRoots (the “Merger”).

Upon effectiveness of the Merger (such time, the “Effective Date”), MassRoots will issue 2,926,829 shares of its common stock, par value $0.001 per share (“Common Stock”), to the stockholders of the Company, allocated pro-rata based on each stockholder’s respective holdings of common stock of the Company immediately prior to the Effective Date (the “Merger Share Consideration”); and each share of the common stock of Merger Subsidiary will be converted into one newly issued, fully paid and non-assessable share of common stock of the Surviving Entity. MassRoots also agreed to pay $80,000 to Zachary Marburger, with $40,000 payable at the Effective Date and the remaining $40,000 payable upon completion of a full year of service as the Company’s Vice President of Strategy, and $20,000 to Micah Davidson (the “Merger Cash Consideration”). The Merger Cash Consideration is in repayment of debt obligations owed by the Company to Messrs. Marburger and Davidson.

The closing of the Merger is also subject to various conditions, including the Massroot’s employment of Zachary Marburger as the new Vice President of Strategy, the engagement of Micah Davidson as a Senior Software Engineer and the receipt of a Lock-Up Agreement between MassRoots and each stockholder of the Company prohibiting the sale or transfer of shares of Common Stock acquired as Merger Share Consideration, for a period of six (6) months from the Effective Date.

EXHIBIT 99.2

DDDIGTAL LLC

CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

INDEX TO CONDENSED FINANCIAL STATEMENTS

Condensed Balance Sheets as of September 30, 2016 (unaudited) and December 31, 2015	2

Condensed Statements of Operations and Members’ Deficit for the nine months ended September 30, 2016 and from February 12, 2015 (date of inception) through September 30, 2015 (unaudited)	3

Condensed Statements of Cash Flows for the nine months ended September 30, 2016 and from February 12, 2015 (date of inception) through September 30, 2015 (unaudited)	4

Notes to Condensed Financial Statements	5

DDDIGTAL LLC

CONDENSED BALANCE SHEETS

	September 30,	December 31,
	2016	2015
	(unaudited)
ASSETS
Current assets:
Cash	$ 8,672	$ 11,379
Accounts receivable	3,583	5,500
Total current assets	12,255	16,879

Property and equipment, net	3,333	6,338

Total assets	$ 15,588	$ 23,217

LIABILITIES AND MEMBERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$ 140	$ 42,223
Deferred revenue	-	12,000
Loans from members	100,000	24,588
Total current liabilities	100,140	78,811

Members' deficit	(84,552)	(55,594)

Total liabilities and members' deficit	$ 15,588	$ 23,217

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

DDDIGTAL LLC

CONDENSED STATEMENTS OF OPERATIONS AND MEMBERS' DEFICIT

(unaudited)

		From February 12, 2015
	Nine months	(Date of inception)
	Ended	Through
	September 30, 2016	September 30, 2015
REVENUE
Services	$ 38,683	$ 97,462

OPERATING EXPENSES:
Advertising	9,252	30,690
Salaries and wages	130,791	80,331
Professional fees	38,760	89,685
Other general and administrative	19,833	35,081
Depreciation	1,637	742
Total operating expenses	200,273	236,530

Net loss from operations	(161,590)	(139,068)

OTHER INCOME (EXPENSE):
Loss on abandonment of equipment	(1,368)	-

NET LOSS	$ (162,958)	$ (139,068)

Members' deficit-beginning of period	(55,594)	-

Contributions	134,000	176,000

Net loss	(162,958)	(139,068)

Member deficit-end of period	$ (84,552)	$ 36,932

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

DDDIGTAL LLC

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

		From February 12, 2015
	Nine months	(Date of inception)
	Ended	Through
	September 30, 2016	September 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (162,958)	$ (139,068)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation	1,637	742
Loss on abandonment of equipment	1,368	-
Changes in operating assets and liabilities:
Accounts receivable	1,917	-
Accounts payable and accrued expenses	(42,083)	140
Deferred revenue	(12,000)	-
Net cash used in operating activities	(212,119)	(138,186)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment	-	(7,663)
Net cash used in investing activities	-	(7,663)

CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions by owners	134,000	176,000
Loans from members	75,412	-
Net cash provided by financing activities	209,412	176,000

Net (decrease) increase in cash	(2,707)	30,151

Cash-beginning of period	11,379	-
Cash-end of period	$ 8,672	$ 30,151

Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$ -	$ -
Taxes	$ -	$ -

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

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

DDDigtal, LLC, (the "Company") was organized as a limited liability company under the laws of the State of Colorado on February 12, 2015. In connection with the potential merger with Massroots, Inc., the Company converted into a Colorado corporation and changed its name from DDDigtal LLC to DDDigtal Inc. This conversion was effective November 28, 2016. Any reference to the “Company” in the accompanying condensed financial statements or these notes to the condensed financial statements shall also be a reference to DDDigtal Inc, as converted.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for annual financial statements.

The Company provides enterprises custom website development and full service order software solutions for legal cannabis businesses under the software name “Whaxy”.

The unaudited condensed interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The condensed balance sheet as of December 31, 2015 has been derived from audited financial statements.

Operating results for the nine months ended September 30, 2016 are not necessarily indicative of results that may be expected for the year ending December 31, 2016. These condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015.

NOTE 2 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

As of September 30, 2016, the Company had cash of $8,672 and working capital deficit of $ 87,885. During the nine months ended September 30, 2016, the Company used net cash in operating activities of $ 212,119. The Company has not yet generated any significant revenues, and has incurred net losses since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

During the nine months ended September 30, 2016, the Company raised $134,000 in cash proceeds from contributions from members and received loans from members in the amount of $ 75,412. The Company does not believe that its current cash on hand will be sufficient to fund its projected operating requirements for 2016 and beyond.

The Company's primary source of operating funds since inception has been cash proceeds from member contributions. The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Revenue recognition

Beginning in 2016, the Company launched an online service platform. The Company recognizes revenue on a monthly basis based upon a transaction fee plus a fixed monthly service charge.

Use of Estimates

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable.

Three customers accounted for 72.6%, 15.4% and 12.0% (aggregate of 100%) of the Company’s total accounts receivable at September 30, 2016.

One customer accounted for 100% of the Company's total accounts receivable at December 31, 2015

The Company had four customers accounting for 32.3%, 23.7%, 21.5%, and 16.3%; (total of 93.8%) of total revenues for the nine months ended September 30, 2016.

The Company had three customers accounting for 39.1%, 21.0% and 12.3%; (total of 72.4%) of total revenues from February 12, 2015 through September 30, 2015.

Cash

Cash consist of cash held in bank demand deposits. The Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable primarily consists of trade receivables, net of allowances. On a periodic basis, the Company evaluates its trade receivables and establishes an allowance for doubtful accounts based on its history of past bad debt expense, collections and current credit conditions. The Company performs on-going credit evaluations of its customers and the customer’s current credit worthiness. Collections and payments from customers are continuously monitored. The Company maintains an allowance for doubtful accounts, which is based upon historical experience as well as specific customer collection issues that have been identified. As of September 30, 2016 and December 31, 2015, the Company’s allowance for doubtful accounts was $-0-. If the financial condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required in future periods.

Property and Equipment

Advertising

The Company's advertising costs are expensed as incurred. Advertising expense was $9,252 and $30,690 for the nine months ended September 30, 2016 and from February 12, 2015 (date of inception) through September 30, 2015, respectively.

Income taxes

Segment information

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2016 and December 31, 2015. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Recent Accounting Pronouncements

NOTE 4 – PROPERTY AND EQUIPMENT

		September 30, 2016		December 31, 2015
Computer equipment	$	5,988	$	5,988
Office equipment		-		1,675
		5,988		7,663
Accumulated Depreciation		2,655		1,325
	$	3,333	$	6,338

For the nine months ended September 30, 2016 and from February 12, 2015 through September 30, 2015, depreciation expense charged to operations was $1,637 and $742, respectively. During the nine months ended September 30, 2016, the Company incurred a $1,368 loss on abandonment of office equipment upon relocation of offices.

NOTE 5 – RELATED PARTY TRANSACTIONS

Loans from members in the amount of $100,000 and $24,588 at September 30, 2016 and December 31, 2015, respectively, consist of non-interest bearing working capital advances and expense reimbursements due to two of the Company’s members.

NOTE 6 – SUBSEQUENT EVENTS

In accordance with the requirements of ASC 855, Subsequent Events, the Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued.

On November 28, 2016, the Company converted into a Colorado corporation and changed its name from DDDigtal LLC to DDDigtal Inc. This conversion was effective November 28, 2016.

EXHIBIT 99.3

MASSROOTS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Massroots, Inc. (the “Company”) and DDDigtal Inc, f/k/a DDDigtal LLC (“DDD”), after entering into an agreement on December 15, 2016 to acquire DDD. The notes to the unaudited pro forma condensed financial information describes the reclassifications and adjustments to the financial information presented.

The unaudited pro forma condensed combined balance sheet as of September 30, 2016 is presented as if the acquisition of DDD had occurred on September 30, 2016. The unaudited pro forma condensed combined statements of operations for the periods ended December 31, 2015 and for the nine months ended September 30, 2016 are presented as if the acquisition of DDD had occurred at the beginning of the period presented.

The allocation of the purchase price used in the unaudited pro forma condensed combined financial information is based upon the respective fair values of the assets and liabilities of DDD as of September 30, 2016.

The unaudited pro forma condensed combined financial information is not intended to represent or be indicative of the Company’s consolidated results of operations or financial position that the Company would have reported had the DDD acquisition been completed as of the dates presented, and should not be taken as a representation of the Company’s future consolidated results of operation or financial position.

The unaudited pro forma condensed combined financial statements do not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies, operating efficiencies or cost savings that may be associated with the acquisition. The unaudited pro forma condensed combined financial data also do not include any integration costs, cost overlap or estimated future transaction costs, except for fixed contractual transaction costs that the companies expect to incur as a result of the acquisition.

The historical financial information has been adjusted to give effect to events that are directly attributable to the Acquisition, factually supportable and, with respect to the statements of operations, expected to have a continuing impact on the results of the combined company. These unaudited pro forma combined financial statements should be read in conjunction with the historical financial statements and accompanying notes of DDD (contained elsewhere in this Form 8-K) and the Company’s historical financial statements and accompanying notes , which were previously filed with the Securities and Exchange Commission. The adjustments that are included in the following unaudited pro forma combined financial statements are described in Note 3 below, which includes the numbered notes that are marked in those financial statements.

MASSROOTS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

	Massroots, Inc.	DDDigtal, LLC
	September 30,	September 30,		Pro Forma	Pro Forma
	2016	2016	REF	Adjustments	Balance
Assets
Current assets:
Cash	$ 126,615	$ 8,672	(2)	$ (100,000)	$ 35,287
Accounts receivable	111,824	3,583		-	115,407
Total current assets	238,439	12,255		(100,000)	$ 150,694

Property and equipment, net	77,899	3,333		-	81,232

Other assets:
Goodwill and other intangibles	-	-	(1)	2,660,162	2,660,162
Investments	175,000	-			175,000
Deposits	33,502	-		-	33,502
Total other assets	208,502	-		2,660,162	2,868,664

Total assets	$ 524,840	$ 15,588		$ 2,560,162	$ 3,100,590

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$ 801,393	$ 140		$ -	$ 801,533
Convertible notes payable, short-term	767,604	-		-	767,604
Derivative liability	1,288,302	-		-	1,288,302
Loans from members	-	100,000	(2)	(100,000)	-
Total current liabilities	2,857,299	100,140		(100,000)	2,857,439

Long term debt:
Convertible debentures	209,100	-		-	209,100

Stockholders' equity:
Common stock, $0.001 par value , 200,000,000 shares authorized, 54,010,150 shares issued and outstanding	54,010		(1)	2,927	56,937
Common stock to be issued, 790,374 shares	790				790
Additional paid in capital	17,491,266		(1)	2,572,683	20,063,949
Accumulated deficit	(20,087,625)				(20,087,625)
Members' deficit	-	(84,552)	(1)	84,552	-
Total stockholders' equity	(2,541,559)	(84,552)		2,660,162	34,051

Total liabilities and stockholders' equity	$ 524,840	$ 15,588		$ 2,560,162	$ 3,100,590

See the accompanying notes to the pro forma condensed combined financial information

MASSROOTS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

		DDDigtal, LLC
		From February 12, 2015
	Massroots, Inc.	(Date of Inception)
	Year ended December 31,	Through December 31,		Pro Forma	Pro Forma
	2015	2015	REF	Adjustments	Balance
Revenue	$ 213,963	$ 117,609		$ -	$ 331,572

Operating expenses	6,339,063	379,203	(3)	658,000	7,376,266

Loss from operations	(6,125,100)	(261,594)		(658,000)	(7,044,694)

Other income (expenses):
Change in derivative liabilities	(2,236,401)				(2,236,401)
Interest expense	(4,381)	-		-	(4,381)
Amortization of discount on notes payable	(107,016)	-		-	(107,016)

Net loss	$ (8,472,898)	$ (261,594)		$ (658,000)	$ (9,392,492)

Loss per common share, basic and diluted	$ (0.19)				$ (0.20)

Weighted average number of common shares outstanding, basic and diluted	43,834,157				46,760,986

See the accompanying notes to the pro forma condensed combined financial information

MASSROOTS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2016

				Pro Forma	Pro Forma
	Massroots	DDDigtal LLC	REF	Adjustments	Balance
Revenue	$ 794,621	$ 38,683		$ -	$ 833,304

Operating expenses	6,795,371	200,273	(3)	493,000	7,488,644

Loss from operations	(6,000,750)	(161,590)		(493,000)	(6,655,340)

Other income (expenses):
Gain on change in fair value of derivative liabilities	1,320,654	-		-	1,320,654
Loss on abandonment of equipment	-	(1,368)			(1,368)
Interest expense	(3,575,008)	-		-	(3,575,008)

Net loss	$ (8,255,104)	$ (162,958)		$ (493,000)	$ (8,911,062)

Loss per common share, basic and diluted	$ (0.17)				$ (0.17)

Weighted average number of common shares outstanding, basic and diluted	48,916,198				51,843,027

See the accompanying notes to the pro forma condensed combined financial information

1. BASIS OF PRO FORMA PRESENTATION

DDDigtal, LLC (“DDD”) was organized as a limited liability company under the laws of the State of Colorado on February 12, 2015. In connection with a potential merger with Massroots, Inc. (the “Company”), DDD converted into a Colorado corporation and changed its name from DDDigtal LLC to DDDigtal Inc. This conversion was effective November 28, 2016. Any reference to “DDD” in the accompanying pro forma condensed combined financial information or these notes shall also be a reference to DDDigtal Inc, as converted.

The unaudited pro forma condensed combined balance sheet as of December 31, 2015 and the unaudited pro forma condensed statement of operations for the year ended December 31, 2015, are based on the historical financial statements of the Company and DDD as of December 31, 2015 after giving effect to the Company’s acquisition of DDD that was consummated on January 25, 2017 and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined balance sheet as of September 30, 2016, statement of operations for year ended December 31, 2015 and statement of operations for the nine months ended September 30, 2016 are presented as if the acquisition of DDD had occurred on September 30, 2016 and occurred at the beginning of each period presented.

The Company accounts for business combinations pursuant to Accounting Standards Codification ASC 805, Business Combinations. In accordance with ASC 805, the Company uses it best estimates and assumptions to accurately assign fair value to the assets acquired and the liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of the purchase consideration over the fair value of the assets acquired and the liabilities assumed.

The fair values assigned to DDD’s assets acquired and liabilities assumed are based on management’s estimates and assumptions. The estimated fair values of these assets acquired and liabilities assumed are considered preliminary and are based on the information that was available as of the date of acquisition. The Company believes that the information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but is waiting for additional information, primarily related to estimated values, which are subject to change. The Company expects to finalize the valuation of the assets and liabilities as soon as practicable, but not later than one year from the acquisition date.

The unaudited pro forma condensed combined financial information should be read in conjunction with the historical consolidated financial statements and accompanying notes of the Company included in the annual report on forms 10-K and 10-Q for the year ended December 31, 2015 and nine months ended September 30, 2016.

Accounting Periods Presented

For purposes of these unaudited pro forma condensed combined financial information, DDD’s historical financial statements for the period from February 12, 2015 (date of inception) through December 31, 2015 and for the nine months ended September 30, 2016 have been aligned to more closely conform to the Company’s financial information, as explained below. Certain pro forma adjustments were made to conform DDD’s accounting policies to the Company’s accounting policies as noted below.

Reclassifications

The Company reclassified certain accounts in the presentation of DDD’s historical financial statements in order to conform to the Company’s presentation.

2. ACQUISITION OF DDD

On December 15, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Whaxy Inc., a wholly-owned subsidiary of the Company (“Merger Subsidiary”), DDD, Zachary Marburger and all of the stockholders of DDD. Pursuant to the Merger Agreement, Merger Subsidiary will be merged with and into DDD, whereby the separate corporate existence of Merger Subsidiary will cease and DDD will survive (the “Surviving Entity”) as a wholly-owned subsidiary of MassRoots (the “Merger”).

Upon consummation of the Merger (such time, the “Effective Date”), which became effective on January 25, 2017, the Company issued 2,926,829 shares of its common stock, par value $0.001 per share, to the stockholders of DDD, allocated pro-rata based on each stockholder’s respective holdings of common stock of DDD immediately prior to the Effective Date (the “Merger Share Consideration”); and each share of the common stock of Merger Subsidiary was be converted into one newly issued, fully paid and non-assessable share of common stock of the Surviving Entity. The Company also agreed to pay $80,000 to Zachary Marburger, with $40,000 payable at the Effective Date and the remaining $40,000 payable upon completion of a full year of service as the Company’s Vice President of Strategy, and $20,000 to Micah Davidson (the “Merger Cash Consideration”). The Merger Cash Consideration is in repayment of debt obligations owed by DDD to Messrs. Marburger and Davidson.

The closing of the Merger is also subject to various conditions, including the Company’s employment of Zachary Marburger as the new Vice President of Strategy, the engagement of Micah Davidson as a Senior Software Engineer and the receipt of a Lock-Up Agreement between the Company and each stockholder of DDD prohibiting the sale or transfer of shares of Common Stock acquired as Merger Share Consideration, for a period of six (6) months from the Effective Date.

A summary of consideration is as follows:

2,926,829 shares of the Company's common stock

2,575,610

The following summarizes the current estimates of fair value of assets acquired and liabilities assumed:

Assets acquired:
Cash	$	8,672
Accounts receivable		3,583
Property and equipment		3,333
Goodwill and other intangibles		2,660,162
Liabilities assumed:
Accounts payable and accrued expenses		(140	)
Loans from members		(100,000	)
Net assets acquired	$	2,575,610

The purchase price allocation for the above acquisitions is subject to further refinement as management completes its assessment of the valuation of certain assets and liabilities.

The Company accounts for acquisitions in accordance with the provisions of ASC 805-10. The Company assigns to all identifiable assets acquired a portion of the cost of the acquired net assets equal to the estimated fair value of such assets at the date of acquisition. The Company records the excess of the cost of the acquired net assets over the sum of the amounts assigned to identifiable assets acquired as goodwill.

The Company accounts for and reports acquired goodwill under Accounting Standards Codification subtopic 350-10, Intangibles-Goodwill and Other (“ASC 350-10”). In accordance with ASC 350-10, at least annually, the Company tests its intangible assets for impairment or more often if events and circumstances warrant. Any write-downs will be included in results from operations.

3. PRO FORMA ADJUSTMENTS

The following pro forma adjustments are included in the Company’s unaudited pro forma condensed combined financial information:

(1)

To record and align fair value of acquired assets and assumed liabilities and to record the preliminary estimate of goodwill for the Company’s acquisition of DDD. The preliminary estimate of goodwill represents the excess of the purchase consideration over the estimated fair value of the assets acquired and the liabilities assumed and to eliminate DDD’s historical stockholder equity.

(2)

To record Merger Cash Consideration (as defined above).

(3)

To record employment agreements entered into in connection with the Merger.