NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016, AND DECEMBER 31, 2015

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, 2015. 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.

As of March 31, 2016, the Company was structured with three wholly-owned subsidiaries: 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 $3,082,758, an accumulated deficit of $16,664,004, and a working capital deficit of $2,751,536 as of March 31, 2016, 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.

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.

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ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016, AND DECEMBER 31, 2015

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 March 31, 2016, and December 31, 2015, 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 March 31, 2016, and December 31, 2015, the Company had no cash equivalents.

Foreign Currency Translation

Items included in the financial statements of the Company’s subsidiary are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in US Dollars, which is the Company’s reporting currency.

The results and financial position of PearTrack Systems Group, Ltd., the Company’s wholly owned subsidiary, has a functional currency different from the reporting currency, the British Pound, and is translated into the reporting currency as follows:

(i)assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; 

(ii)income and expenses for each statement of operations are translated at average exchange rates on a monthly basis; and 

(iii)all resulting exchange differences are recognized as a separate component of equity. 

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statements of operations as other comprehensive income. On consolidation, exchange differences arising from the translation of the net investment in foreign entities are taken to stockholders’ equity. During the three months ended March 31, 2016 and 2015, respectively, exchange differences of $0 and $4,541 were recognized.  As of March 31, 2016 and 2015, respectively, exchange differences of $7,079 and $8,683 have been accumulated.

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ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016, AND DECEMBER 31, 2015

The following represents the accumulated unrealized exchange differences, which are excluded from earnings and reflected as a component of other comprehensive income:

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 of 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 of 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 its intellectual property, with a carrying value of $3,340,027, was impaired.  As a result, an impairment loss of $3,340,027 was recognized for the period ended March 31, 2016.

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 has continuing revenue from limited customer contracts for its tracking units and system.  In addition, the Company provides consulting services as an additional revenue source.  As of March 31, 2016, the Company has not commenced its principal operations, generating limited test sales of its security product line.

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ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016, AND DECEMBER 31, 2015

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 March 31, 2016, the Company had not yet filed its 2013 through 2015 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.

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 2015, the FASB issued ASU 2015-01 Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This Update eliminates from GAAP the concept of extraordinary items. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities.

In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30: Simplifying the Presentation of Debt Issuance Costs.  ASU 2015-03 is part of the Simplification Initiative, and its objective of to simplify the presentation of debt issuance costs.  This Update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update.  The amendments in this Update are effective for the Company’s consolidated financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued.

10

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016, AND DECEMBER 31, 2015

In July 2015, the FASB issued ASU 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory.  ASU 2015-11 is part of the Simplification Initiative, and its objective is to simplify the measurement of inventory.  This Update applies to inventory that is measured using FIFO or average cost, and requires an entity measure inventory at the lower of cost and net realizable value.  The amendments in this Update are effective for the Company’s consolidated financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The amendments in this Update should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period.

In September 2015, the FASB issued ASU 2015-16 Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments.  ASU 2015-16 is part of the Simplification Initiative, and eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The amendments in this Update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in this Update should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this Update with earlier application permitted for financial statements that have not been issued.

Not Yet 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 will be effective for the Company beginning January 1, 2018, with early adoption not 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 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 will be effective for the Company beginning January 1, 2019, with early adoption 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.

NOTE 3. INVESTMENT IN SECURITIES

As of March 31, 2016, and December 31, 2015, 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 three months ended March 31, 2016 and 2015, respectively, $120,619 and ($16,887) in unrealized gains (losses) were recognized and included as part of comprehensive income (loss).  As of March 31, 2016, and December 31, 2015, respectively, $1,314,742 and $1,194,123 in cumulative unrealized gains were recognized, and the securities held a fair value of $1,326,804 and $1,206,185.

During the three months ended March 31, 2016 and 2015, respectively, $118 and $0 in depreciation was expensed.

11

During the three months ended March 31, 2016 and 2015, respectively, the Company recognized $1,988,875 and $0 in impairment losses related to its unencumbered intellectual property, and $1,351,152 and $0 in impairment losses related to its intellectual property pledged to creditors, for a total of $3,340,027 and $0 in impairment losses.

During the three months ended March 31, 2016 and 2015, respectively, $0 and $45,855 in amortization was expensed.

During the three months ended March 31, 2016, management determined that there is no future sacrifice of economic benefit arising from certain debt previously recognized by the Company to transfer assets or provide services in the future.  As a result, certain vendor accounts payable in the amount of $33,075, and previously accrued payroll taxes in the amount of $145,711, was extinguished, and a gain of $178,786 was recognized.

NOTE 7. DEFERRED REVENUE

In connection with a certain Service Agreement dated June 30, 2014 (the “Service Agreement”), revenue received in the amount of $450,000 was deferred, to be recognized over the term of the agreement, or twelve (12) months. During the year ended December 31, 2014, the Company recognized a total of $225,000 as revenues earned. Due to certain events beyond the Company’s control, the customer was unable to meet the terms of the Service Agreement, and the contract expired.  There was no refund clause within the Service Agreement, and the remaining $225,000 in deferred revenues have been recognized during the three months ended March 31, 2016.

Notes payable includes the following convertible promissory notes at March 31, 2016, and December 31, 2015:

[1] No demand has been made

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

During the three months ended March 31, 2016, and the year ended December 31, 2015, respectively, interest in the amount of $16,259 and $65,213 was expensed. As of March 31, 2016, and December 31, 2015, respectively, interest in the amount of $244,649 and $228,390 has been accrued and is included as part of accrued expenses on the accompanying consolidated balance sheets.

12

Related party notes payable consists of the following convertible notes payable at March 31, 2016, and December 31, 2015:

[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 March 31, 2016, and December 31, 2015, respectively, affiliates and related parties are due a total of $3,737,302 and $3,516,387, which is comprised of promissory notes to related parties, net of unamortized discounts of $243,524 and $268,549, in the amount of $3,423,036 and $3,253,760; accrued compensation in the amount of $236,550 and $206,550; and reimbursable expenses/cash advances to the Company in the amount of $68,716 and $56,077; for a net increase of $220,915 and $322,607. During the three months ended March 31, 2016, and the year ended December 31, 2015, respectively, promissory notes to related parties increased by $153,251 and $284,889, unamortized discounts decreased by $25,025 and $72,672, accrued compensation increased by $30,000 and $88,050, and reimbursable expenses/cash advances increased (decreased) by $12,639 and ($123,004).

13

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016, AND DECEMBER 31, 2015

During the three months ended March 31, 2016, and the year ended December 31, 2015, respectively, promissory notes to related parties, net of unamortized discounts, increased by $178,276 and $645,168 as a result of an increase in accrued compensation owed to related parties in the amount of $153,251 and $572,496 converted to convertible promissory notes; an increase in discounts resulting from beneficial conversion features in the amount of $0 and $20,750; and a decrease in unamortized discount in the amount of $25,025 and $93,422.

During the three months ended March 31, 2016, and the year ended December 31, 2015, respectively, $183,251 and $722,946 in related party compensation was accrued, of which $153,251 and $572,496 was converted into convertible promissory notes, and $0 and $62,400 in payments to related parties were made, for a net increase in accrued compensation in the amount of $30,000 and $88,050.

During the three months ended March 31, 2016, and the year ended December 31, 2015, respectively, reimbursable expenses/cash advances owed to related parties increased (decreased) by $12,639 and ($123,004) 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 $12,639 and $17,582; and repayments to related parties in the amount of $0 and $140,586.

During the three months ended March 31, 2016, and the year ended December 31, 2015, respectively, $20,007 and $57,467 in interest on related party loans was expensed. As of March 31, 2016, and December 31, 2015, respectively, $140,527 and $120,520 in interest on related party loans has been accrued, and is included as part of accrued expenses on the accompanying consolidated balance sheets.

NOTE 10. 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.

During the three months ended March 31, 2016, 133,336 shares of the Company’s restricted common stockwere canceled in connection with consulting services not provided pursuant to consulting agreements.  As a result, $134 was recorded to additional paid in capital.

During the three months ended March 31, 2016, subscriptions receivable in the amount of $100 were canceled.  As a result, $100 was recorded to additional paid in capital.

During the three months ended March 31, 2016, and the year ended December 31, 2015, respectively, a total of $4,236 and $595,482 in deferred stock compensation was expensed. Deferred stock compensation of $99,836 and $104,072 remained at March 31, 2016, and December 31, 2015, respectively, to be amortized over the next nine (9) months.

As of March 31, 2016, and December 31, 2015, respectively, the Company had 69,382,753 and 69,516,089 shares of common stock issued and outstanding.

During the three months ended March 31, 2016, and the year ended December 31, 2015, respectively, the Company expensed no stock option compensation.  There remained no deferred stock option compensation at March 31, 2016, and December 31, 2015.

14

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016, AND DECEMBER 31, 2015

Restricted Stock Awards

During the three months and the year ended March 31, 2016, and December 31, 2015, respectively, 0 and 250,000 restricted stock awards were granted, valued at $0 and $57,250; and 156,252 and 2,433,331 restricted stock awards vested, for which $4,236 and $595,482 in deferred stock compensation was expensed. As of March 31, 2016, and December 31, 2015, respectively, there remained 416,669 and 572,921 shares to be vested, and $99,836 and $104,072 in deferred stock compensation to be expensed over the next nine (9) months.

NOTE 14. CORRECTION OF ERROR

During 2023, the Company discovered that the Convertible Promissory Note dated December 31, 2011, as modified through December 31, 2014, issued to Mr. William B. Nesbitt was overstated.  The overstatement was the result of an error made in the accrual of compensation in connection with Mr. Nesbitt’s underlying Employment Agreement.  The error resulted in overstatements of general and administrative expense for the years ended December 31, 2012 through 2014, and interest expense for the years ended December 31, 2012 through 2015.  The errors have been corrected by restating each of the affected financial statement line items for the year ended December 31, 2015, and recognizing a gain on extinguished debt for the cumulative effect on the consolidated statements of operations. The following tables summarize the impacts on the Company’s consolidated financial statements:

15

ENIGMA-BULWARK, LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016, AND DECEMBER 31, 2015