Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Oct. 24, 2017 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Trading Symbol | alyi | |
Entity Registrant Name | ALTERNET SYSTEMS INC | |
Entity Central Index Key | 1,126,003 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 116,724,295 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well Known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash | $ 1,271 | $ 78,780 |
Accounts receivable, net | 7,044 | 5,000 |
Due from related parties | 8,006 | 0 |
Investment in digital currency | 116,974 | 114,763 |
Deposits and other assets | 5,750 | 2,000 |
Total current assets | 139,045 | 200,543 |
TOTAL ASSETS | 139,045 | 200,543 |
Current liabilities | ||
Accounts payable and accrued charges | 874,306 | 746,508 |
Wages payable | 1,482,707 | 1,308,207 |
Accrued payroll taxes | 168,753 | 168,753 |
Other loans payable, net of beneficial conversion feature | 478,394 | 474,377 |
Due to related parties | 0 | 1,796 |
Current liabilities of discontinued operations | 125,835 | 123,574 |
Total current liabilities | 3,129,995 | 2,823,215 |
Stockholders' (deficit) | ||
Capital stock Authorized: 500,000,000 common stock with a par value of $0.00001 and 10,000,000 preferred stock with a par value of $0.00001 Issued and outstanding: 116,724,295 common stock (2015 - 108,224,295) | 1,167 | 1,083 |
Additional paid-in capital | 15,463,929 | 15,351,463 |
Private placement subscriptions | 505,362 | 505,362 |
Share subscription receivable | (375,000) | (375,000) |
Accumulated other comprehensive income | (1,989) | (2,000) |
Accumulated deficit | (18,584,419) | (18,103,580) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) | (2,990,950) | (2,622,672) |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) | $ 139,045 | $ 200,543 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Par Value Per Share | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par Value Per Share | $ 0.00001 | $ 0.00001 |
Common Stock, Shares, Issued | 116,724,295 | 108,224,295 |
Common Stock, Shares, Outstanding | 116,724,295 | 108,224,295 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
REVENUE | $ 18,277 | $ 0 | $ 36,966 | $ 0 |
OPERATING EXPENSES | ||||
Investor relations | 36,000 | 20,000 | 45,000 | 20,000 |
Management and consulting | 117,093 | 151,215 | 237,343 | 326,601 |
Office and general | 10,598 | 10,934 | 20,712 | 23,452 |
Payroll | 1,456 | 28,451 | 5,655 | 57,209 |
Professional fees | 60,821 | 47,590 | 73,643 | 74,090 |
Rent | 7,262 | 7,107 | 14,369 | 13,983 |
Travel | 4,417 | 6,809 | 19,709 | 16,611 |
TOTAL OPERATING EXPENSES | 237,647 | 272,106 | 416,431 | 531,946 |
NET LOSS BEFORE OTHER ITEMS | (219,370) | (272,106) | (379,465) | (531,946) |
OTHER ITEMS | ||||
Interest expense, net | (19,402) | (21,894) | (39,017) | (42,469) |
Gain on foreign exchange | 2,714 | (161) | 4,182 | 290 |
Unrealized gain (loss) on investment | 302 | 1,320 | 2,211 | (1,254) |
(Loss) on debt settlement | 0 | 0 | (68,750) | 0 |
TOTAL OTHER ITEMS | (16,386) | (20,735) | (101,374) | (43,433) |
NET LOSS FROM CONTINUING OPERATIONS | (235,756) | (292,841) | (480,839) | (575,379) |
DISCONTINUED OPERATIONS | 0 | 182,167 | 0 | 182,167 |
TOTAL NET LOSS | $ (235,756) | $ (110,674) | $ (480,839) | $ (393,212) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net loss | $ (480,839) | $ (393,212) |
Add items not affecting cash | ||
Interest accrued | 39,017 | 42,465 |
Shares for services | 8,800 | 70,276 |
Unrealized (gain) loss on investments | (2,211) | 1,254 |
Unrealized foreign exchange (gain) | (3,265) | 0 |
Loss on debt settlement | 68,750 | 0 |
Changes in non-cash working capital: | ||
Accounts receivable, net | (2,044) | 0 |
Deposits and other assets | (3,750) | (1,630) |
Accounts payable and accrued charges | 129,071 | 9,685 |
Deferred gain on sale | 0 | (150,000) |
Wages payable | 174,500 | 173,016 |
Accrued payroll taxes | 0 | (12,776) |
Due to related parties | (5,549) | (9,598) |
Net cash provided by (used in) operating activities | (77,520) | (270,520) |
INVESTING ACTIVITIES | ||
Net cash provided by investing activities | 0 | 0 |
FINANCING ACTIVITIES | ||
Proceeds from loans payable | 0 | 145,583 |
Net cash (used in) financing activities | 0 | 145,583 |
EFFECT OF EXCHANGE RATES ON CASH | 11 | 55 |
CASH FLOWS FROM CONTINUING OPERATIONS | (77,509) | (124,882) |
CASH FLOWS FROM DISCONTINUED OPERATIONS | 0 | 150,000 |
NET (DECREASE) IN CASH DURING THE PERIOD | (77,509) | 25,118 |
CASH, BEGINNING OF PERIOD | 78,780 | 74,907 |
CASH, END OF PERIOD | $ 1,271 | $ 100,025 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2016 | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION [Text Block] | NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION Alternet Systems Inc.’s (the “Company”) focus has evolved into the digital payments and data analytics, micro segmentation and marketing intelligence. The target markets include the mass consumer goods, payments, financial services and telecommunications sectors. Its vision is to be the leading digital commerce solutions provider into global markets, and its mission is to provide innovative solutions that facilitate and expedite commerce, enriching our partners and their customers’ experience, and improving efficiency. Previously, the Company provided leading edge mobile financial solutions and mobile security and related solutions with the former being offered throughout the Western Hemisphere, but most actively in Central and South America and the Caribbean, and the latter being offered globally. As detailed in Note 5, Discontinued Operations, the Company, pursuant to a transaction in Alternet Transactions Systems (“ATS Transaction”), discontinued providing mobile financial solutions and mobile security. ATS is dormant and being closed this year. The Company and its wholly owned subsidiaries, started to provide its services on a commercial basis. These services include: . Alternet Payment Solutions, LLC (“APS“) developing and deploying, retail and consumer multichannel payment mechanisms . Modernization of the electronics point of sale legacy infrastructure expanding the useful life of the electronic point of sale, and including new payment functions in the terminals, such as bill payment, electronic top-up and native payments with digital currency at the point of sale. . Data analytics tools and services for the Telecommunications and Financial Services industries. These condensed consolidated financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At June 30, 2016 the Company had a working capital deficiency of $2,990,950 (December 31, 2015 - $2,622,672). The Company’s continued operations are dependent on the successful implementation of its business plan, its ability to obtain additional financing as needed, continued support from creditors, settling its outstanding debts, and ultimately attaining profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Text Block] | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. Results for interim periods should not be considered indicative of results for a full year. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with SEC on March 31, 2016. The consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. Principles of Consolidation These condensed consolidated financial statements include the accounts of the following wholly owned subsidiaries: . Alternet Systems Inc. (“Alternet”) . AI Systems Group, Inc. . Tekvoice Communications, Inc. . Alternet Transactions Systems (“ATS”), Inc., a wholly owned subsidiary of Alternet (formerly a 51% owned subsidiary. See Note 5, Discontinued Operations) . Utiba Guatemala, S.A. . International Mobile Security, Inc. (“IMS”) . Megatecnica, S.A. . Alternet Financial Solutions, LLC (“AFS”) . Alternet Payment Solutions, LLC (“APS”) . OneMarket, Inc. All significant intercompany transactions and account balances have been eliminated. Reclassifications Certain prior period balances have been reclassified to conform with current period presentation. Changes have not impacted net losses or loss per share information. Use of Estimates and Assumptions The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America 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 financial statement date and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, fair value of convertible notes payable and investment in digital currency. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 605, Revenue Recognition Digital Currency Transactions The Company can enter into transactions that are denominated in digital currency (Ven). These transactions result in digital currency denominated assets and liabilities that are revalued periodically. Upon revaluation, transaction gains and losses are generated and are reported as unrealized gains and losses in other items in the Consolidated Statements of Operations. The Company determines fair value as of the balance sheet date based on Level 1 inputs which consist of quoted prices in active markets. The value of the Company’s digital currency is $116,974 (December 31, 2015 – $114,763), net of $8,026 (December 31, 2015 - $10,237) of unrealized losses. Due to the uncertainty regarding the current and future accounting treatment and tax, legal and regulatory requirements relating to digital currencies or transactions utilizing digital currencies, such accounting, legal, regulatory and tax developments or other requirements may adversely affect us. Income (Loss) per Share The Company computes net income (loss) per share in accordance with ASC Topic 260, Earnings Per Share At June 30, 2016 and December 31, 2015 the Company had no warrants or options outstanding to consider in the income (loss) per share calculations. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), Revenue from Contracts with Customers (Topic 606): Indentifying Performance Obligations and Licensing, In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 740): Recognition and Measurement of Financial Assets and Financial Liabilities. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). In March 2016, the FASB issued ASU No. 2016-07, Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows. |
NOTES AND OTHER LOANS PAYABLE
NOTES AND OTHER LOANS PAYABLE | 6 Months Ended |
Jun. 30, 2016 | |
NOTES AND OTHER LOANS PAYABLE [Text Block] | NOTE 3 - NOTES AND OTHER LOANS PAYABLE Other Loans Payable On October 10, 2012, the Company signed a promissory note whereby the Company agreed to repay a creditor $50,000 plus interest at 10% per annum on April 8, 2013. On April 9, 2013, the Company signed a new promissory note with the creditor which capitalized the unpaid principal and interest of $52,479 under the previous promissory note and extended the maturity date to October 6, 2013. The note was not repaid by October 6, 2013 and continues to accrue interest at the rate of 10% per annum. On January 21, 2016, the creditor elected to convert $15,000 of the outstanding balance into 2,500,000 shares of the Company’s common stock. As of June 30, 2016, the balance owing to this creditor was $54,424 (December 31, 2015 - $66,815) which includes $2,121 (December 31, 2015 - $14,335) of accrued interest. On December 5, 2012, the Company signed a promissory note whereby the Company agreed to repay a creditor $25,000 plus interest at 10% per annum on June 3, 2013. On June 3, 2013, the Company signed a new promissory note with the creditor which capitalized the unpaid principal and interest of $26,240 under the previous promissory note and extended the maturity date to December 1, 2013. The note was not repaid by December 1, 2013 and continues to accrue interest at the rate of 10% per annum. As of June 30, 2016, the balance owing to this creditor was $34,313 (December 31, 2015 - $33,005) which includes $8,073 (December 31, 2015 - $6,765) of accrued interest. On February 8, 2013, the Company signed a promissory note whereby the Company agreed to repay a creditor $100,000 plus interest at 10% per annum on August 7, 2013. This loan was not repaid on its maturity and has since been renewed several times with the unpaid principal and interest being capitalized to the loan balance on each renewal. All other terms remained the same. The loan matures on February 4, 2015. On December 2, 2014, the Company paid the creditor $72,907 of which $9,055 was applied to the accrued interest and $63,852 was applied to the principal outstanding. On January 21, 2016, the creditor elected to convert $20,000 of the outstanding balance into 5,000,000 shares of the Company’s common stock. As of June 30, 2016, the balance owing to this creditor was $33,131 (December 31, 2015- $51,323) which includes $1,123 (December 31, 2015- $5,012) of accrued interest. The note is past due and continues to accrue interest at the rate of 10% per annum. On July 24, 2014, the Company signed a promissory note whereby the Company agreed to repay a creditor $250,000 plus interest at 24% per annum on January 24, 2015. On January 25, 2015, this loan was renewed with the unpaid principal and interest of $280,411 being capitalized to the loan balance on renewal and the maturity being extended to July 6, 2015. All other terms remained the same. On August 10, 2015, the Company repaid the creditor $50,000 of which $13,677 was applied to principal and $36,323 was applied to outstanding interest. As of June 30, 2016, the balance owing to this creditor was $323,910 (December 31, 2015- $291,989) which includes $57,176 (December 31, 2015- $25,256) of accrued interest. The note is past due and continues to accrue interest at the rate of 10% per annum. On October 5, 2015, the Company signed a promissory note whereby the Company agreed to repay a creditor $7,500 plus interest at 10% per annum on April 4, 2016. As of June 30, 2016, the balance owing to this creditor was $8,055 (December 31, 2015 - $7,681) which includes $555 (December 31, 2015 - $181) of accrued interest. The note is past due and continues to accrue interest at the rate of 10% per annum. On November 20, 2015, the Company signed a promissory note whereby the Company agreed to repay a creditor $20,000 on May 18, 2016. As of June 30, 2016, the balance owing to this creditor was $21,227 (December 31, 2015 - $20,230) which includes $1,227 (December 31, 2015 - $230) of accrued interest. |
CAPITAL STOCK
CAPITAL STOCK | 6 Months Ended |
Jun. 30, 2016 | |
CAPITAL STOCK [Text Block] | NOTE 4 – CAPITAL STOCK Common Stock The Company is authorized to issue up to 500,000,000 shares of the Company’s common stock with a par value of $0.00001. During the six months ended June 30, 2016, the Company issued: • 7,500,000 common shares valued at $103,750 for the settlement of $35,000 of debt (see Note 3); and • 1,000,000 common shares valued at $8,800 for accounting services rendered. As of June 30, 2016, the Company had $505,362 (December 31, 2015 - $505,362) in private placement subscriptions which are reported as private placement subscriptions within stockholders’ deficit. The shares which were not issued as at June 30, 2016 or December 31, 2015, were not used to compute the total weighted average shares outstanding as at June 30, 2016 or December 31, 2015, respectively, and were not used in the basic net loss per share calculation. Preferred Stock The Company is authorized to issue up to 10,000,000 shares of the Company’s preferred stock with a par value of $0.00001. Income (Loss) Per Share For the three months ended June 30, 2016 and 2015, the Company had a weighted average of 116,372,647 and 107,247,919 common shares outstanding, respectively, resulting in basic and diluted net loss per common share from continuing operations of $(0.00) (June 30, 2015 - $(0.00)), basic and diluted net income per common share from discontinued operations of $0.00 (June 30, 2015 – $0.00), and basic and diluted net loss per common share of $(0.00) (June 30, 2014 - $(0.00)) . For the six months ended June 30, 2016 and 2015, the Company had a weighted average of 114,097,921 and 104,498,006 common shares outstanding, respectively, resulting in basic and diluted net loss per common share from continuing operations of $(0.00) (June 30, 2015 - $(0.01)), basic and diluted net income per common share from discontinued operations of $0.00 (June 30, 2015 – $0.00), and basic and diluted net loss per common share of $(0.00) (June 30, 2014 - $(0.00)) . Stock Options and Restricted Stock Effective July 17, 2014, the Company adopted the 2014 Equity Incentive Plan (the “Plan”) for the purpose of providing the Company with the means to compensate, in the form of common stock of the Company, directors, officer, consultants, advisors, and employees of the Company or any of its subsidiaries. The Plan was approved by the Company’s stockholders at a special meeting held on September 25, 2014. The Plan will terminate on July 17, 2024 following which no new Options or Restricted Stock can be granted under the Plan. The Company is authorized to issue a maximum 5,000,000 common shares under the Plan, which will automatically increase each time the Company issues additional shares of common stock for a maximum of 5% of the total outstanding common stock. As at June 30, 2016 and December 31, 2015, the Company had no outstanding stock options or restricted stock units. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2016 | |
DISCONTINUED OPERATIONS [Text Block] | NOTE 5 – DISCONTINUED OPERATIONS On October 15, 2013 and as subsequently amended in its entirety on January 6, 2014, the Company, Utiba Pte. Ltd. (“Utiba”), a non-controlling interest investor in ATS, ATS, and Utiba Guatemala entered into an Asset Purchase Agreement in order to effect the sale by ATS of all of its business and assets to Utiba, as described below (the “ATS Transaction”). For such transaction to proceed, approval of the Company’s shareholder was required, which approval was obtained on February 21, 2014. Overview of the ATS Transaction and Consideration Payable 1 The sale pursuant to the Asset Purchase Agreement by ATS of substantially all of its business and assets to Utiba (including the assumption by Utiba of certain liabilities related to such business and assets), in consideration for up to $3,100,000 in cash (the "Cash Purchase Price") subject to certain adjustments related to certain net receivables or liabilities, as the case may be, and reduction to the extent of certain tax liabilities of ATS. The amount of $300,000 of the Cash Purchase Price will be held back to cover certain claims that may be made under the indemnification provisions of the Asset Purchase Agreement. 2 The entry by the Company into a non-compete covenant in favor of Utiba and its affiliates in the mobile payment, top up and mobile financial services industry for a period of 36 months, in consideration for a payment in cash on closing of the transactions contemplated by the Asset Purchase Agreement (the “Closing”) of $2,200,000. The Company recognized the full amount as income in 2014 as it did not intend to compete in this industry in the future. 3 The release by the Company of Utiba from all its obligations under the ATS Shareholders Agreement in consideration for a payment in cash on Closing of $200,000. 4 Upon Closing, Utiba shall transfer its 49% interest in ATS to the Company so that the Company will own 100% of ATS after Closing. On March 4, 2014, the ATS Transaction closed pursuant to which the Company received $4,928,036 in proceeds. An additional $667,264 was held in escrow to cover certain claims that may be made under the indemnification provisions of the Asset Purchase Agreement. During the year ended December 31, 2014, $367,264 was released. The remaining $300,000 was included in sales proceeds held back and a deferred gain on sale. Proceeds of $150,000 were received in April 2015 with the remaining balance received in September 2015. During the year ended December 31, 2015, the Company wrote off $32,167 to discontinued operations for wages payable from ATS’s operations prior to the ATS Transaction which were determined not to be payable. Additionally, the Company settled its lawsuit with Utiba for $80,000 plus the release of all amounts payable to and from to Utiba for a total of $1,055,177. As of June 30, 2016 and December 31, 2015, the associated liabilities of the consolidated ATS business have been classified as discontinued operations and are presented below June 30, December 31, 2016 2015 $ $ LIABILITIES Accounts payable and accrued charges 125,835 123,574 CURRENT LIABILITIES OF DISCONTINUED OPERATIONS 125,835 123,574 There is no discontinued operations effect on the statement of operations for the six month periods ended June 30, 2016 and 2015 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2016 | |
RELATED PARTY TRANSACTIONS [Text Block] | NOTE 6 - RELATED PARTY TRANSACTIONS As of June 30, 2016, a total of $1,120,841 (December 31, 2015 - $947,260) was payable to directors and officers of the Company, which was non-interest bearing and had no specific terms of repayment. Of the amount payable, $21,518 (December 31, 2015 - $21,840) was included in accounts payable for expense reimbursements, $1,108,709 (December 31, 2015 - $934,209) was included in wages payable for accrued fees and capitalized interest, and $(9,386) (December 31, 2015 - $(8,789)) was included in due from related parties. During the six months ended June 30, 2016, the Company expensed a total of $174,500 (June 30, 2016 - $174,500) in consulting fees and salaries paid to directors and officers of the Company. The amounts incurred have been accrued and none has been paid in cash. As of June 30, 2016, the Company owes a company with a director in common with the Company $2,368 (VEF 5,971,438) (December 31, 2015 - $6,753 ; VEF 5,971,438) which is non-interest bearing, has no specific terms of repayment, and is included in due to related parties. |
OPERATING LEASES
OPERATING LEASES | 6 Months Ended |
Jun. 30, 2016 | |
OPERATING LEASES [Text Block] | NOTE 7 – OPERATING LEASES The Company leased its office facilities under a one-year lease agreement with a monthly cost of $1,800. The lease expired in March 2015 and was renewed at a monthly rate of $1,872 which expired on February 28, 2016. On February 29, 2016 the lease was further renewed for an additional year at a monthly rate of $1,944 and expired on February 28, 2017. Lease expense totaled $11,377 and $11,016 during the six months ended June 30, 2016 and 2015, respectively. The Company is required to make future minimum rental payments under the operating lease agreement of $17,568 during the 2016 fiscal year and $3,889 during the 2017 fiscal year. |
SUPPLEMENTAL DISCLOSURE WITH RE
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | 6 Months Ended |
Jun. 30, 2016 | |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS [Text Block] | NOTE 8 – SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS Six months ended June 30, 2016 2015 $ $ Supplemental cash flow disclosures: Interest paid - 20,575 Cash paid for income taxes - - Supplemental non-cash disclosures: Shares obligated to be issued - 32,776 Shares issued for convertible debt - 379,903 Shares issued for services rendered 8,800 - Shares issued for debt settlement 103,750 - |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2016 | |
FAIR VALUE [Text Block] | NOTE 9 – FAIR VALUE Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The fair value of the Company’s accounts receivable, due from related parties, accounts payable, other loans payable, and due to related parties approximate their carrying values. The Company’s other financial instruments, being cash and investment in digital currency, are measured at fair value using Level 1 inputs. |
LAWSUITS
LAWSUITS | 6 Months Ended |
Jun. 30, 2016 | |
LAWSUITS [Text Block] | NOTE 10 – LAWSUIT In January 2014, the Company received notice of a default judgment in the amount of $39,000 plus interest entered by the State of New York related to an unpaid service agreement entered into on February 11, 2009. The Company has filed a motion to vacate the foreign judgment or in the alternative stay the enforcement. The Company, until receipt of such notice, was unaware of any such demand. No prior notice had been served to the Company or its Chief Executive Officer. On March 23, 2015, the Supreme Court of the State of New York vacated and set aside the default judgments. As of June 30, 2016, no provision for this claim has been made. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2016 | |
SUBSEQUENT EVENTS [Text Block] | NOTE 11 – SUBSEQUENT EVENTS Events occurring after June 30, 2016 were evaluated through the date this Interim Report was issued, in compliance with FASB ASC Topic 855 “Subsequent Events”, to ensure that any subsequent events that met the criteria for recognition and/or disclosure in this report have been included. In July 2017, the Company completed a Share Exchange Agreement (“Agreement”) with Lithium IP Holdings Corporation (“LIP”) to acquire 100% of the outstanding LIP shares in exchange for the following share issuances to LIP’s sole shareholder (the “Exchange”): (a) issue 10,000,000 Series A preferred shares with a par value of $0.00001, and (b) issue 38,908,098 common shares of the Company with a par value of $0.00001 per share. Upon completion of the Exchange, LIP’s sole shareholder acquired 25% of the Company’s common shares and 100% of the Company’s preferred shares. Michael Viadero resigned as the Company’s Chief Financial Officer on November 30, 2016 and director on July 22, 2017. Henryk Dabrowski resigned as both the Chief Executive Officer and director on July 22, 2017. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Interim Financial Statements [Policy Text Block] | Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. Results for interim periods should not be considered indicative of results for a full year. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with SEC on March 31, 2016. The consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. |
Principles of Consolidation [Policy Text Block] | Principles of Consolidation These condensed consolidated financial statements include the accounts of the following wholly owned subsidiaries: . Alternet Systems Inc. (“Alternet”) . AI Systems Group, Inc. . Tekvoice Communications, Inc. . Alternet Transactions Systems (“ATS”), Inc., a wholly owned subsidiary of Alternet (formerly a 51% owned subsidiary. See Note 5, Discontinued Operations) . Utiba Guatemala, S.A. . International Mobile Security, Inc. (“IMS”) . Megatecnica, S.A. . Alternet Financial Solutions, LLC (“AFS”) . Alternet Payment Solutions, LLC (“APS”) . OneMarket, Inc. All significant intercompany transactions and account balances have been eliminated. |
Reclassifications [Policy Text Block] | Reclassifications Certain prior period balances have been reclassified to conform with current period presentation. Changes have not impacted net losses or loss per share information. |
Use of Estimates and Assumptions [Policy Text Block] | Use of Estimates and Assumptions The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America 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 financial statement date and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, fair value of convertible notes payable and investment in digital currency. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. |
Revenue Recognition [Policy Text Block] | Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 605, Revenue Recognition |
Digital Currency Transactions [Policy Text Block] | Digital Currency Transactions The Company can enter into transactions that are denominated in digital currency (Ven). These transactions result in digital currency denominated assets and liabilities that are revalued periodically. Upon revaluation, transaction gains and losses are generated and are reported as unrealized gains and losses in other items in the Consolidated Statements of Operations. The Company determines fair value as of the balance sheet date based on Level 1 inputs which consist of quoted prices in active markets. The value of the Company’s digital currency is $116,974 (December 31, 2015 – $114,763), net of $8,026 (December 31, 2015 - $10,237) of unrealized losses. Due to the uncertainty regarding the current and future accounting treatment and tax, legal and regulatory requirements relating to digital currencies or transactions utilizing digital currencies, such accounting, legal, regulatory and tax developments or other requirements may adversely affect us. |
Income (Loss) per Share [Policy Text Block] | Income (Loss) per Share The Company computes net income (loss) per share in accordance with ASC Topic 260, Earnings Per Share At June 30, 2016 and December 31, 2015 the Company had no warrants or options outstanding to consider in the income (loss) per share calculations. |
Recent Accounting Pronouncements [Policy Text Block] | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), Revenue from Contracts with Customers (Topic 606): Indentifying Performance Obligations and Licensing, In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 740): Recognition and Measurement of Financial Assets and Financial Liabilities. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). In March 2016, the FASB issued ASU No. 2016-07, Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Schedule of Disposal Groups, Including Discontinued Operations, Balance Sheet [Table Text Block] | June 30, December 31, 2016 2015 $ $ LIABILITIES Accounts payable and accrued charges 125,835 123,574 CURRENT LIABILITIES OF DISCONTINUED OPERATIONS 125,835 123,574 |
SUPPLEMENTAL DISCLOSURE WITH 19
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Six months ended June 30, 2016 2015 $ $ Supplemental cash flow disclosures: Interest paid - 20,575 Cash paid for income taxes - - Supplemental non-cash disclosures: Shares obligated to be issued - 32,776 Shares issued for convertible debt - 379,903 Shares issued for services rendered 8,800 - Shares issued for debt settlement 103,750 - |
NATURE OF OPERATIONS AND BASI20
NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Nature Of Operations And Basis Of Presentation 1 | $ 2,990,950 |
Nature Of Operations And Basis Of Presentation 2 | $ 2,622,672 |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Summary Of Significant Accounting Policies 1 | 51.00% |
Summary Of Significant Accounting Policies 2 | $ 116,974 |
Summary Of Significant Accounting Policies 3 | 114,763 |
Summary Of Significant Accounting Policies 4 | 8,026 |
Summary Of Significant Accounting Policies 5 | $ 10,237 |
NOTES AND OTHER LOANS PAYABLE (
NOTES AND OTHER LOANS PAYABLE (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016USD ($)shares | |
Notes And Other Loans Payable 1 | $ 50,000 |
Notes And Other Loans Payable 2 | 10.00% |
Notes And Other Loans Payable 3 | $ 52,479 |
Notes And Other Loans Payable 4 | 10.00% |
Notes And Other Loans Payable 5 | $ 15,000 |
Notes And Other Loans Payable 6 | shares | 2,500,000 |
Notes And Other Loans Payable 7 | $ 54,424 |
Notes And Other Loans Payable 8 | 66,815 |
Notes And Other Loans Payable 9 | 2,121 |
Notes And Other Loans Payable 10 | 14,335 |
Notes And Other Loans Payable 11 | $ 25,000 |
Notes And Other Loans Payable 12 | 10.00% |
Notes And Other Loans Payable 13 | $ 26,240 |
Notes And Other Loans Payable 14 | 10.00% |
Notes And Other Loans Payable 15 | $ 34,313 |
Notes And Other Loans Payable 16 | 33,005 |
Notes And Other Loans Payable 17 | 8,073 |
Notes And Other Loans Payable 18 | 6,765 |
Notes And Other Loans Payable 19 | $ 100,000 |
Notes And Other Loans Payable 20 | 10.00% |
Notes And Other Loans Payable 21 | $ 72,907 |
Notes And Other Loans Payable 22 | 9,055 |
Notes And Other Loans Payable 23 | 63,852 |
Notes And Other Loans Payable 24 | $ 20,000 |
Notes And Other Loans Payable 25 | shares | 5,000,000 |
Notes And Other Loans Payable 26 | $ 33,131 |
Notes And Other Loans Payable 27 | 51,323 |
Notes And Other Loans Payable 28 | 1,123 |
Notes And Other Loans Payable 29 | $ 5,012 |
Notes And Other Loans Payable 30 | 10.00% |
Notes And Other Loans Payable 31 | $ 250,000 |
Notes And Other Loans Payable 32 | 24.00% |
Notes And Other Loans Payable 33 | $ 280,411 |
Notes And Other Loans Payable 34 | 50,000 |
Notes And Other Loans Payable 35 | 13,677 |
Notes And Other Loans Payable 36 | 36,323 |
Notes And Other Loans Payable 37 | 323,910 |
Notes And Other Loans Payable 38 | 291,989 |
Notes And Other Loans Payable 39 | 57,176 |
Notes And Other Loans Payable 40 | $ 25,256 |
Notes And Other Loans Payable 41 | 10.00% |
Notes And Other Loans Payable 42 | $ 7,500 |
Notes And Other Loans Payable 43 | 10.00% |
Notes And Other Loans Payable 44 | $ 8,055 |
Notes And Other Loans Payable 45 | 7,681 |
Notes And Other Loans Payable 46 | 555 |
Notes And Other Loans Payable 47 | $ 181 |
Notes And Other Loans Payable 48 | 10.00% |
Notes And Other Loans Payable 49 | $ 20,000 |
Notes And Other Loans Payable 50 | 21,227 |
Notes And Other Loans Payable 51 | 20,230 |
Notes And Other Loans Payable 52 | 1,227 |
Notes And Other Loans Payable 53 | $ 230 |
CAPITAL STOCK (Narrative) (Deta
CAPITAL STOCK (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016USD ($)shares | |
Capital Stock 1 | shares | 500,000,000 |
Capital Stock 2 | $ 0.00001 |
Capital Stock 3 | shares | 7,500,000 |
Capital Stock 4 | $ 103,750 |
Capital Stock 5 | $ 35,000 |
Capital Stock 6 | shares | 1,000,000 |
Capital Stock 7 | $ 8,800 |
Capital Stock 8 | 505,362 |
Capital Stock 9 | $ 505,362 |
Capital Stock 10 | shares | 10,000,000 |
Capital Stock 11 | $ 0.00001 |
Capital Stock 12 | 116,372,647 |
Capital Stock 13 | shares | 107,247,919 |
Capital Stock 14 | $ 0 |
Capital Stock 15 | 0 |
Capital Stock 16 | 0 |
Capital Stock 17 | 0 |
Capital Stock 18 | 0 |
Capital Stock 19 | $ 0 |
Capital Stock 20 | 114,097,921 |
Capital Stock 21 | shares | 104,498,006 |
Capital Stock 22 | $ 0 |
Capital Stock 23 | (0.01) |
Capital Stock 24 | 0 |
Capital Stock 25 | 0 |
Capital Stock 26 | 0 |
Capital Stock 27 | $ 0 |
Capital Stock 28 | shares | 5,000,000 |
Capital Stock 29 | 5.00% |
DISCONTINUED OPERATIONS (Narrat
DISCONTINUED OPERATIONS (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016USD ($)mo | |
Discontinued Operations 1 | $ 3,100,000 |
Discontinued Operations 2 | $ 300,000 |
Discontinued Operations 3 | mo | 36 |
Discontinued Operations 4 | $ 2,200,000 |
Discontinued Operations 5 | $ 200,000 |
Discontinued Operations 6 | 49.00% |
Discontinued Operations 7 | 100.00% |
Discontinued Operations 8 | $ 4,928,036 |
Discontinued Operations 9 | 667,264 |
Discontinued Operations 10 | 367,264 |
Discontinued Operations 11 | 300,000 |
Discontinued Operations 12 | 150,000 |
Discontinued Operations 13 | 32,167 |
Discontinued Operations 14 | 80,000 |
Discontinued Operations 15 | $ 1,055,177 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Related Party Transactions 1 | $ 1,120,841 |
Related Party Transactions 2 | 947,260 |
Related Party Transactions 3 | 21,518 |
Related Party Transactions 4 | 21,840 |
Related Party Transactions 5 | 1,108,709 |
Related Party Transactions 6 | 934,209 |
Related Party Transactions 7 | (9,386) |
Related Party Transactions 8 | (8,789) |
Related Party Transactions 9 | 174,500 |
Related Party Transactions 10 | 174,500 |
Related Party Transactions 11 | $ 2,368 |
Related Party Transactions 12 | 5,971,438 |
Related Party Transactions 13 | $ 6,753 |
Related Party Transactions 14 | 5,971,438 |
OPERATING LEASES (Narrative) (D
OPERATING LEASES (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Operating Leases 1 | $ 1,800 |
Operating Leases 2 | 1,872 |
Operating Leases 3 | 1,944 |
Operating Leases 4 | 11,377 |
Operating Leases 5 | 11,016 |
Operating Leases 6 | 17,568 |
Operating Leases 7 | $ 3,889 |
LAWSUITS (Narrative) (Details)
LAWSUITS (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Lawsuits 1 | $ 39,000 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Subsequent Events 1 | 100.00% |
Subsequent Events 2 | 10,000,000 |
Subsequent Events 3 | $ | $ 0.00001 |
Subsequent Events 4 | shares | 38,908,098 |
Subsequent Events 5 | $ / shares | $ 0.00001 |
Subsequent Events 6 | 25.00% |
Subsequent Events 7 | 100.00% |
Schedule of Disposal Groups, In
Schedule of Disposal Groups, Including Discontinued Operations, Balance Sheet (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Discontinued Operations Schedule Of Disposal Groups, Including Discontinued Operations, Balance Sheet 1 | $ 125,835 |
Discontinued Operations Schedule Of Disposal Groups, Including Discontinued Operations, Balance Sheet 2 | 123,574 |
Discontinued Operations Schedule Of Disposal Groups, Including Discontinued Operations, Balance Sheet 3 | 125,835 |
Discontinued Operations Schedule Of Disposal Groups, Including Discontinued Operations, Balance Sheet 4 | $ 123,574 |
Schedule of Cash Flow, Suppleme
Schedule of Cash Flow, Supplemental Disclosures (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 1 | $ 0 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 2 | 20,575 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 3 | 0 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 4 | 0 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 5 | 0 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 6 | 32,776 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 7 | 0 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 8 | 379,903 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 9 | 8,800 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 10 | 0 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 11 | 103,750 |
Supplemental Disclosure With Respect To Cash Flows Schedule Of Cash Flow, Supplemental Disclosures 12 | $ 0 |