Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2017shares | |
Document and Entity Information | |
Entity Registrant Name | SPINDLE, INC. |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2017 |
Amendment Flag | false |
Entity Central Index Key | 1,403,802 |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 83,554,651 |
Entity Filer Category | Smaller Reporting Company |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q2 |
Trading Symbol | spdl |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 26,944 | $ 3,642 |
Accounts receivable, net | 66,282 | 82,913 |
Prepaid expenses and deposits | 613,452 | 160,280 |
Total current assets | 706,678 | 246,835 |
Other assets | ||
Property and equipment, net | 11,596 | 14,284 |
Intangible assets, net | 139,711 | 134,758 |
Total other assets | 151,307 | 149,042 |
Total assets | 857,985 | 395,877 |
Current liabilities | ||
Accounts payable and accrued liabilities | 478,279 | 396,237 |
Advances | 171,000 | 10,000 |
Accrued liabilities - related party | 268,793 | 414,327 |
Notes payable | 44,552 | 38,526 |
Convertible notes payable, net | 99,933 | 64,053 |
Convertible notes payable - related party, net | 87,763 | 79,498 |
Total current liabilities | 1,150,320 | 1,002,641 |
Total liabilities | 1,150,320 | 1,002,641 |
Stockholders' equity | ||
Preferred stock, value | ||
Common stock, value | 83,553 | 70,846 |
Additional paid-in capital | 29,252,913 | 27,516,362 |
Accumulated deficit | (29,628,801) | (28,193,972) |
Total stockholders' equity | (292,335) | (606,764) |
Total liabilities and stockholders' equity | $ 857,985 | $ 395,877 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Balance Sheets | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 83,554,651 | 70,846,734 |
Common stock, shares outstanding | 83,554,651 | 70,846,734 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement | ||||
Sales income | $ 39,042 | $ 257,442 | $ 71,264 | $ 472,415 |
Cost of sales | 20,984 | 13,349 | 37,478 | 24,364 |
Gross profit | 18,058 | 244,093 | 33,786 | 448,051 |
Expenses: | ||||
Depreciation and amortization | 8,721 | 114,871 | 16,234 | 224,567 |
Promotional and marketing | 2,830 | 11,174 | 9,763 | 12,700 |
Consulting | 139,953 | 149,212 | 196,187 | 280,174 |
Salaries and wages | 127,618 | 395,467 | 317,571 | 936,977 |
Director fees | 41,003 | 40,905 | 78,503 | 93,145 |
Professional fees | 138,102 | 99,636 | 242,568 | 219,356 |
General and administrative expenses | 88,472 | 221,777 | 188,158 | 326,422 |
Impairment on long-lived assets | 43,657 | 43,657 | ||
Total operating expenses | 546,699 | 1,076,699 | 1,048,984 | 2,136,998 |
Net operating income (loss) | (528,641) | (832,606) | (1,015,198) | (1,688,947) |
Other income (expense) | ||||
Gain (loss) on sale of intangible assets | (13,344) | (195,244) | ||
Gain (loss) on legal settlement | (115,000) | |||
Other income | 33 | |||
Other expense | 13,021 | 10,129 | ||
Interest expense, net | 37,888 | 17,072 | 111,967 | 17,662 |
Interest expense - related party | 6,865 | 6,024 | 112,453 | 6,024 |
Total other income (expense) | (58,097) | (36,117) | (419,631) | (148,815) |
Loss before provision for income taxes | (586,738) | (868,723) | (1,434,829) | (1,837,762) |
Provision for income taxes | ||||
Net (loss) | $ (586,738) | $ (868,723) | $ (1,434,829) | $ (1,837,762) |
Weighted average number of common shares outstanding - basic and diluted | 77,705,165 | 64,362,418 | 75,972,655 | 65,165,426 |
Net (loss) per share - basic and diluted | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.03) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities | ||
Net (loss) | $ (1,434,829) | $ (1,837,762) |
Adjustments to reconcile net loss to net cash (used) by operating activities: | ||
Shares issued for services | 70,310 | 134,131 |
Shares issued for services - related party | 115,570 | 347,320 |
Share based compensation expense | 31,368 | |
Depreciation and amortization | 16,234 | 224,567 |
Gain (loss) on sale of intangible assets | (195,244) | |
Amortization of debt discounts | 184,015 | 19,855 |
Options issued for services | 413,706 | |
Gain (loss) related to abandoned parties | (43,657) | |
Gain (loss) related to bad debt | (75,345) | |
Gain (loss) on legal settlement | (115,000) | |
Changes in operating assets and liabilities: | ||
(Increase) decrease in accounts receivable | 63,687 | (192,138) |
(Increase) decrease in prepaid expenses | 61,159 | 12,339 |
Increase in accounts payable and accrued expenses | 188,554 | (72,980) |
(Decrease) increase in expenses - related party | 139,603 | |
Net cash (used in) operating activities | (508,688) | (577,357) |
Cash flows from investing activities | ||
Purchase of fixed assets | 3,863 | |
Sale of intangible assets | 25,000 | |
Additions to capitalized software development | 200,828 | |
Net cash provided by (used in) investing activities | 25,000 | (204,691) |
Cash flows from financing activities | ||
Payment for share repurchase | 100,000 | |
Proceeds from notes and advances | 226,000 | |
Payments on notes and advances | 7,000 | 8,000 |
Proceeds from notes and advances - related parties | 150,500 | |
Payments on notes and advances - related parties | 20,000 | 12,500 |
Proceeds from sale of common stock | 157,490 | 822,800 |
Net cash provided by (used in) financing activities | 506,990 | 702,300 |
Net increase (decrease) in cash | 23,302 | (79,748) |
Cash - beginning of the period | 3,642 | 161,226 |
Cash - ending of the period | $ 26,944 | $ 81,478 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Basis of Presentation | NOTE 1 - BASIS OF PRESENTATION The interim condensed financial statements included herein, presented in accordance with accounting principles generally accepted in the United States of America (GAAP), have been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim condensed financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2016 and notes thereto included in the Company's Annual Report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports. Results of operations for the interim periods are not indicative of annual results. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and cash equivalents The Company considers cash and cash equivalents to include all stable, highly liquid investments with an original maturity of three months or less from the date of purchase. 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 and disclosure of contingent assets and liabilities and 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. Actual results could differ from those estimates. Revenue recognition Revenue is derived on a per transaction basis through the Companys gateway and payments platforms. The Company also earns revenue for services, account establishment fees and licensure on Software as a Service (SaaS) basis, and on a performance basis, such as when a client acquires a new customer through our platform. Revenue is recognized in accordance with Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements, as revised by SAB No. 104. As such, the Company recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collectability is probable. Sales are recorded net of sales discounts. Accounts receivable, net Accounts receivable is reported at the customers outstanding balances, less any allowance for doubtful accounts. An allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. Property and equipment Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. Depreciation is computed on the straight-line and accelerated methods for financial reporting purposes based upon the following estimated useful lives: Computer software 10 years Computer hardware 5 years Office furniture 7 years Long-lived assets The Company accounts for its long-lived assets in accordance with Accounting Standards Codification (ASC) Topic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the assets carrying value and fair value or disposable value. Fair value of financial instruments We account for non-recurring fair value measurements of our non-financial assets and liabilities in accordance with ASC 820-10 Fair Value Measurement. This guidance defines fair value, establishes a framework for measuring fair value and addresses required disclosures about fair value measurements. This standard establishes a three-level hierarchy for fair value measurements based upon the significant inputs used to determine fair value. Observable inputs are those which are obtained from market participants external to the Company while unobservable inputs are generally developed internally, utilizing managements estimates, assumptions and specific knowledge of the assets/liabilities and related markets. The three levels are defined as follows: · · · If the only observable inputs are from inactive markets or for transactions which the Company evaluates as distressed, the use of Level 1 inputs should be modified by the company to properly address these factors, or the reliance of such inputs may be limited, with a greater weight attributed to Level 3 inputs. Due to the short-term nature of our financial assets and liabilities, we consider their carrying amounts to approximate fair value. Goodwill The Company accounts for goodwill in accordance with ASC Topic 805-30-25, Accounting for Business Combinations (ASC Topic 805-30-25) and ASC Topic 350-20-35, Accounting for Goodwill - Subsequent Measurement (ASC Topic 350-20-35). ASC Topic 805-30-25 requires that the acquirer recognize goodwill as of the acquisition date as the excess of the fair value of the consideration transferred over the fair value of the net acquisition-date amounts of the identifiable assets and liabilities assumed. ASC Topic 350-20-35 requires that goodwill acquired in a purchase and determined to have an indefinite useful life is not amortized, but instead tested for impairment annually or more frequently when events or circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. The Companys annual goodwill impairment testing date is December 31 of each year. The Company first assesses qualitative factors to determine whether its necessary to perform the two-step goodwill impairment test. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. If the qualitative assessment results in an indication that its more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative assessment must be performed. Management has determined that the Company has one reporting unit for purposes of testing goodwill. The quantitative analysis involves estimating the fair value of its reporting unit utilizing a combination of valuation methods including market capitalization, the income approach and cash flows. Income and cash flow forecasts were used in the evaluation of goodwill based on managements estimate of future performance. If goodwill is determined to be impaired as a result of this analysis, an impairment loss is recorded equal to the difference between the assets carrying value and fair value. The Company recorded no impairment to goodwill during the two quarters ended June 30, 2017 or June 30, 2016. Goodwill was fully impaired at December 31, 2016. Capitalized software development costs The Company sometimes capitalizes internal software development costs after establishing technological feasibility of a software application. Capitalized software development costs represent the costs associated with the development of the Companys software applications used to generate revenue from our customers. Amortization of such costs is recorded on a software application-by-application basis, based on the greater of the proportion of current year sales to the total of current and estimated future sales for the applications or the straight-line method over the remaining estimated useful life of the software application. The Company continually evaluates the recoverability of capitalized software costs, if any, and charges to operations amounts that are deemed unrecoverable for projects it abandons. The Company had no capitalized software development costs during the three and six months ended June 30, 2017. The Company recorded an impairment to its software development costs of $43,657 for the quarter ended June 30, 2016. Capitalized software development costs were zero at December 31, 2016. Beneficial Conversion Feature If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (BCF). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. Debt Discount The Company determines if the convertible debenture should be accounted for as liability or equity under ASC 480, Liabilities - Distinguishing Liabilities from Equity (ASC 480). ASC 480, applies to certain contracts involving a companys own equity, and requires that issuers classify the following freestanding financial instruments as liabilities. Mandatorily redeemable financial instruments, obligations that require or may require repurchase of the issuers equity shares by transferring assets (e.g., written put options and forward purchase contracts), and certain obligations where at inception the monetary value of the obligation is based solely or predominantly on: · · · If the entity determined the instrument meets the guidance under ASC 480 the instrument is accounted for as a liability with a respective debt discount. The Company records debt discounts in connection with raising funds through the issuance of promissory notes (see Notes 8 and 9). These costs are amortized to non-cash interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Stock-based compensation The Company accounts for stock-based payments to employees in accordance with ASC 718, Stock Compensation (ASC 718). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the statement of operations based on their fair values at the date of grant. The Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees (ASC 505-50). Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term forfeitures is distinct from cancellations or expirations and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized as compensation under ASC Topic 505-50. In accordance with ASC 505-50, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. Loss per share We report earnings (loss) per share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. Potential common shares as of June 30, 2017 that have been excluded from the computation of diluted net loss per share were 3,862,920 shares and include 1,625,420 warrants and 2,237,500 options. At June 30, 2017, 690,000 of the 2,237,500 potential common shares that could be issued upon the exercise of the options had not vested, and 50,000 of the 1,625,420 common shares that could be issued upon the exercise of the warrants had not vested. Income taxes The Company accounts for its income taxes under the provisions of Income Taxes (ASC 740). The method of accounting for income taxes under ASC 740 is an asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. The Company did not recognize any deferred tax liabilities or assets at December 31, 2016 or during the six months ended June 30, 2017 or June 30, 2016. Recent accounting pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Companys financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Companys financials properly reflect the change. In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-04 Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for any impairment tests performed after January 1, 2017. In January 2017, the FASB issued Accounting Standards Update (ASU) 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under this guidance, when substantially all the fair value of gross assets acquired is concentrated in a single asset (or group of similar assets), the assets acquired would not represent a business. In addition, to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. This guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Going Concern | NOTE 3 - GOING CONCERN The accompanying condensed financial statements have been prepared assuming we will continue as a going concern. As shown in the accompanying condensed financial statements, the Company incurred a net loss of ($586,738) and ($1,434,829) for the three and six months ended June 30, 2017, respectively, and at June 30, 2017, has an accumulated deficit of ($29,628,801). To continue as a going concern, the Company may need, among other things, additional capital resources. There are no assurances that without generating new revenue during the remainder of 2017 that the Company will be successful without additional financing. Should revenues not grow sufficiently and should the Company be unable to secure additional financing through the sale of its securities or debt, it would be unlikely for us to continue as a going concern for one year from the issuance of the financial statements. The 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 in existence. These conditions raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty. |
Accounts Receivable, Net, Discl
Accounts Receivable, Net, Disclosure | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Accounts Receivable, Net, Disclosure | NOTE 4 - ACCOUNTS RECEIVABLE, NET Accounts receivable consist of the following at: June 30, December 31, 2017 2016 Due from customers and vendors $ -- $ 32,913 Due from processing activity 5,882 50,000 Due from stock receivable (See Note 10) 60,400 -- Total accounts receivable, net $ 66,282 $ 82,913 |
Prepaid Expenses and Deposits,
Prepaid Expenses and Deposits, Disclosure | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Prepaid Expenses and Deposits, Disclosure | NOTE 5 - PREPAID EXPENSES AND DEPOSITS Prepaid expenses and deposits consist of the following at: June 30, December 31, 2017 2016 Prepaid insurance $ 22,234 $ 46,489 Prepaid consulting fees (stock-based) 585,844 113,791 Deposits 5,374 -- Total prepaid expenses and deposits $ 613,452 $ 160,280 |
Property and Equipment, Net, Di
Property and Equipment, Net, Disclosure | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Property and Equipment, Net, Disclosure | NOTE 6 - PROPERTY AND EQUIPMENT, NET Property and equipment, net consist of the following at: June 30, December 31, 2017 2016 Office furniture & equipment $ 33,225 $ 33,225 Software $1,200 $1,200 Less: accumulated depreciation (22,829) (20,141) Total property and equipment, net $ 11,596 $ 14,284 During the three and six months ended June 30, 2017, the Company recorded depreciation expense of $1,344 and $2,687, respectively, and during the three and six months ended June 30, 2016, we recorded depreciation expense of $1,479 and $2,806, respectively. |
Other Intangible Assets, Net, D
Other Intangible Assets, Net, Disclosure | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Other Intangible Assets, Net, Disclosure | NOTE 7 - OTHER INTANGIBLE ASSETS, NET Other intangible assets, net consist of the following at: June 30, Accumulated June 30, 2017 Gross Amortization 2017 Net License agreements and contracts $ 75,000 $ (17,500) $ 57,500 Domain names 75,000 (35,081) 39,919 Software 43,500 (1,208) 42,292 $ 193,500 $ (53,789) $ 139,711 December 31, Accumulated December 31, 2016 Gross Amortization 2016 Net License agreements and contracts $ 75,000 $ (10,000) $ 65,000 Domain names 75,000 (30,242) 44,758 Capitalized software costs 25,000 -- 25,000 $ 175,000 $ (40,242) $ 134,758 On April 18, 2017, the Company entered into an agreement to acquire specific digital marketing software assets from CoverCake, Inc., specifically, CoverCake's intelligent algorithms for data mining and consumer engagement. The transaction closed on May 30, 2017. The CoverCake software is expected to enhance both the sophistication and proprietary strengths of Spindle's Catalyst Marketing System. CoverCake's software capabilities include intelligent content aggregation; data mining on various social media data feed platforms, and a robust Content Management System (CMS) backend that will be a significant enhancement to the Catalyst Marketing System. CoverCake has been utilized in the past by enterprise level merchants as well as television and radio broadcast organizations. The purchase price was 300,000 shares of Spindle unregistered common stock valued at $43,500 along with launch and revenue based payments as certain performance targets are met, and the software will be amortized over three years. The launch consideration and earnout potential could total up to $350,000, but the actual total is not currently determinable beyond a reasonable doubt and therefore not included in the Companys financial statements as contingent liabilities. During the three and six months ended June 30, 2017, the Company recorded amortization expense of $7,377 and $13,547, respectively. During the three and six months ended June 30, 2016, the Company recorded amortization expense of $113,392 and $221,761, respectively. |
Notes Payable and Convertible N
Notes Payable and Convertible Notes Payable, Net of Unamortized Discount | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Notes Payable and Convertible Notes Payable, Net of Unamortized Discount | NOTE 8 - NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE, NET OF UNAMORTIZED DISCOUNT During the three months ended March 31, 2017, we entered into three Bridge Note Agreements totaling $46,000 with one of our investors. These three Bridge Notes are interest free, are secured by the Companys assets, are convertible to shares of the Companys restricted stock at $0.10 per share and have maturity dates of April 30, 2017. The Bridge Notes also include warrants to purchase two shares of the Companys common stock, at a price of $0.135, for each dollar loaned to Spindle. The total discount attributable to these transactions is $32,716. During the three and six months ended June 30, 2017, interest expense related to the warrants and the beneficial conversion feature totaled $14,142 and $32,716, respectively. During the three months ended June 30, 2017, two of these Bridge Notes totaling $31,000 were paid in full through conversion to Spindle stock. The holder of the remaining $15,000 Bridge Note, which was due April 30, 2017, agreed to extend the maturity date for an additional 180 days. No warrants related to these three Bridge Notes have been exercised. In December 2016, we entered into a $5,000 Bridge Note Agreement with one of our investors. The Bridge Note is secured by the Companys assets and include warrants to purchase two shares of the Companys common stock for each dollar loaned to Spindle. The total discount attributable to this transaction is $525. During the three and six months ended June 30, 2017, interest expense related to the warrants and the beneficial conversion feature totaled $0 and $525, respectively. At June 30, 2017, no payments had been made on the $5,000 Bridge Note. The holder of the $5,000 Bridge Note, which was due 45 days from the date of the note, waived the 45-day term. No warrants related to this Bridge Notes have been exercised. On May 18, 2016, we converted a $182,000 payable to an investor in the Company and entered into a Convertible Promissory Note (Note) with that investor. The Note bears an interest rate of 6% per annum and has a maturity date of May 18, 2018. The total value of the note, if converted to stock, would be $404,444 and therefore a discount in the amount of $182,000 was recorded, as the conversion feature cannot be greater than the amount of the debt. This amount is amortized to interest expense over the term of the note. During the three and six months ended June 30, 2017, interest expense of $2,498 and $4,969, and interest expense related to amortization of the discount on the unpaid notes of $20,818 and $41,407 was recorded, respectively. The balance of the unamortized discount at June 30, 2017, was $87,067. During the six months ended June 30, 2017, the Company made no payments to the Notes principal balance. At June 30, 2017, the balance of the Note was $167,000 and is presented as a note payable on our Condensed Balance Sheets. On December 15, 2011, we issued a Promissory Grid Note (Grid Note) to a former director of the Company which formalized various advances previously received from the former director in the amount of $51,300 and allowing for future advances of up to $250,000. The Grid Note was non-interest bearing, unsecured and matured on December 15, 2014. We imputed interest at a rate of 2% per annum and recorded a discount in the amount of $10,640. In connection with one of the previous advances in the amount of $25,000, we issued warrants to purchase up to 250,000 shares of our common stock at a price per share of $1.00 resulting in an additional discount of $17,709. The total discount attributable to the Grid Note totaled $28,349 and was amortized to interest expense over the term of the Grid Note. During the three and six months ended June 30, 2017, the Company repaid $4,000 of the principal balance of the Grid Note. During the three and six months ended June 30, 2016, the Company repaid $4,500 and $7,500 of the principal balance of the Grid Note, respectively. At June 30, 2017, the balance of the Grid Note was $44,552. |
Convertible Notes Payable - Rel
Convertible Notes Payable - Related Party, Net of Unamortized Discount | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Convertible Notes Payable - Related Party, Net of Unamortized Discount | NOTE 9 - CONVERTIBLE NOTES PAYABLE - RELATED PARTY, NET OF UNAMORTIZED DISCOUNT On March 3, 2017, we entered into a $100,000 Bridge Note Agreement with a 7% stockholder of the Company. The Bridge Note was secured by the Companys assets, was convertible to shares of the Companys restricted stock at $0.10 per share and included warrants to purchase two shares of the Companys common stock, at a price of $0.15, for each dollar loaned to Spindle. This Bridge Note had no stated maturity date. The total discount attributable to this transaction was $100,000. The Bridge Note was converted to Spindle stock on March 3, 2017, and the entire interest expense related to the warrants and the beneficial conversion feature totaling $100,000 was recorded during the three months ended March 31, 2017. At June 30, 2017, the warrants related to the Bridge Loan had not been exercised. In December 2016, we entered into a $10,500 Bridge Note Agreement with one of our directors. The Bridge Note was secured by the Companys assets and included warrants to purchase two shares of the Companys common stock for each dollar loaned to Spindle. The total discount attributable to this transaction was $1,102. During the three and six months ended June 30, 2017, interest expense related to the warrants and the beneficial conversion factor totaled $0 and $1,102, respectively. At June 30, 2017, the $10,500 Bridge Note was paid in full. No warrants related to this Bridge Note have been exercised. On March 25, 2016, we entered into an agreement with a 12% stockholder of the Company. This agreement is for a $100,000 promissory note, convertible to stock under certain circumstances. The note bears an interest rate of 6% per annum and has a maturity date of March 25, 2018. The total value of the note, if converted to stock, would be $133,333 and therefore a discount in the amount of $33,333 was recorded. This amount is amortized to interest expense - related party over the term of the note. During the three and six months ended June 30, 2017, interest expense of $1,496 and $2,975, and interest expense related to amortization of the discount on the unpaid note of $4,155 and $8,265 was recorded, respectively. The balance of the unamortized discount at June 30, 2017 was $12,237. |
Stockholders' Equity Disclosure
Stockholders' Equity Disclosure | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Stockholders' Equity Disclosure | NOTE 10 - STOCKHOLDERS DEFICIT The Company is authorized to issue up to 50,000,000 shares of preferred stock, par value $0.001. There are no preferred shares issued or outstanding as of June 30, 2017 The Company is authorized to issue up to 300,000,000 shares of common stock, par value $0.001. During the three months ended March 31, 2017, the Company: · · · · · During the three months ended June 30, 2017, the Company: · · · · · · · |
Options and Warrants, Disclosur
Options and Warrants, Disclosure | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Options and Warrants, Disclosure | NOTE 11 - OPTIONS AND WARRANTS On October 29, 2012, our stockholders approved the 2012 Stock Incentive Plan (the Plan) that governs equity awards to our management, employees, directors and consultants. On November 7, 2013, our stockholders approved an amendment to the Plan which increased the total authorized amount of common stock issuable under the Plan from 3,000,000 to 6,000,000 shares. Options: During the three months ended March 31, 2017, the Company granted 690,000 options to employees and consultants to purchase shares of common stock at an exercise price of $0.23 per share, with grant date fair values of $0.05. The options vest ratably on an annual basis over three years, and expire ten years from grant date. There were no options granted during the three months ended June 30, 2017. Number of Options Weighted-Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2015 2,990,000 $0.426 8.10 Granted -- -- -- Exercised -- -- -- Forfeited/Cancelled (1,442,500) -- -- Outstanding at December 31, 2016 1,547,500 $0.357 7.56 Exercisable at December 31, 2016 1,431,666 $0.345 7.44 Outstanding at December 31, 2016 1,547,500 $0.357 7.56 Granted 690,000 $0.230 9.50 Exercised -- -- -- Forfeited/Cancelled -- -- -- Outstanding at June 30, 2017 2,237,500 $0.318 7.82 Exercisable at June 30, 2017 1,547,500 $0.357 7.06 Warrants: In conjunction with the sale of Spindle assets, during the three months ended March 31, 2017, the Company granted common stock purchase warrants that entitle the buyer to purchase 50,000 additional shares of Spindle common stock at a price of $0.135 per share. The holder may exercise his purchase rights at any time up to the third anniversary of the agreement. In conjunction with the Stock Purchase Agreements in three months ended March 31, 2017 (SPA), the Company granted common stock purchase warrants that entitle the holders to purchase 200,000 additional shares of Spindle common stock at a price of $0.135 per share. The holder may exercise his purchase rights at any time up to the third anniversary of the agreement. In conjunction with the Bridge Loan Agreements in the three months ended March 31, 2017, the Company granted common stock purchase warrants that entitle the holder to purchase 92,000 additional shares of Spindle at a price of $0.135 per share. The holder may exercise his purchase rights at any time up to the third anniversary of the agreement. No warrants were granted during the three months ended June 30, 2017. The following is a summary of the status of the Companys stock warrants as of June 30, 2017: Number of Warrants Weighted-Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2015 600,000 $0.500 1.47 Granted 883,420 - -- Exercised -- - -- Forfeited/Cancelled (200,000) - -- Outstanding at December 31, 2016 1,283,420 $0.249 2.99 Exercisable at December 31, 2016 1,183,420 $0.228 3.12 Outstanding at December 31, 2016 1,283,420 $0.249 2.99 Granted 342,000 $0.135 2.66 Exercised -- -- -- Forfeited/Cancelled -- -- -- Outstanding at June 30, 2017 1,625,420 $0.225 2.53 Exercisable at June 30, 2017 1,575,420 $0.216 2.24 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Subsequent Events | NOTE 12 - SUBSEQUENT EVENTS On August 9, 2017, the Company issued 121,503 shares to attorneys and a former director for services provided. These shares were authorized, but unissued at June 30, 2017. On July 31, 2017, the Company sold an unrestricted license to its payment service provider (PSP) software for a total $30,000 to be paid in 3 tranches. $10,000 is held in escrow effective July 31, 2017 until closing on August 31, 2017. $10,000 is to be paid on September 18, 2017 and on October 18, 2017. On July 28, 2017, the Company signed an agreement to sell its portfolio of merchant accounts for a total of $341,021.52, with an effective date of June 30, 2017. The Buyer paid $238,715.06 to the Company at closing. The remainder of the purchase price of $102,306.46 will be released subject to certain performance metrics of the portfolio. Up to half will be released after 18 months, and up to half released after 24 months after Closing. On July 10, 2017, Frank Knuettel, II resigned from Spindle, Inc.s Board of Directors (the Board) and as the Chairman of the Board for personal reasons. Mr. Knuettels resignation was not due to any dispute with the Company. After Mr. Knuettels resignation, the Board unanimously appointed Dr. Jack Scott, the Companys current Chief Executive Officer, as Chairman. On July 1, 2017, the Board of the Company appointed Mr. Habib Yunus as Chief Financial Officer (CFO) effective July 1, 2017 replacing interim Chief Financial Officer John Devlin, who concurrently resigned from the CFO position. Mr. Devlin will remain as a member of the Board. Mr. Yunus will earn a salary of $150,000 per annum with bonuses to be later determined. Mr. Yunus has served as a director of the Company since February 1, 2017, is a Certified Public Accountant and has more than 15 years of experience in accounting, finance and investing. Most recently, Mr. Yunus served as the Chief Financial Officer and Senior Vice President of Nasdaq listed Payment Data Systems, Inc. from March 03, 2015 to December 30, 2016. He successfully led the companys uplisting from the OTC Market to NASDAQ while managing its public reporting requirements including SEC filings, corporate governance and forecasting. Prior to joining Payment Data, he was the Managing Director and Founder of W Energy Advisory LLC since January 2013, focused on advising clients on energy investments, joint venture transactions, project management and market research in North America for Asian investors. Before founding W Energy Advisory, from September 2010 to January 2013, he was the Lead Project Manager for Toyota Tsusho America, Inc., where in 2012 he originated and negotiated a $602 million joint venture between Toyota Tsusho Corporation (Japan) and Encana Corporation. Prior to his position at Toyota Tsusho America, Inc., he served as the Head of Tax and Special Assistant to the Chief Financial Officer of Shinsei Bank Ltd. in Tokyo, Japan from July 2006 to June 2010. Mr. Yunus worked for Deloitte Tax from 1999 to 2006 in Atlanta and Tokyo. Mr. Yunus holds a B.S. in Accounting and Masters of Accounting (Tax specialization) degrees from the University of Florida. As previously reported on a Current Report on Form 8-K filed on August 10, 2016 with the Securities and Exchange Commission, on August 2, 2016, Spindle filed a lawsuit in the United States District Court for the District of Arizona, case 2:16-cv-02613-MHB (Spindle, Inc., a Nevada Corporation vs. William Clark and Joann Clark, husband and wife; Sean Tate and Patricia La Due-Tate, husband and wife; Justin Clark, an individual; and Phasive, Inc., an Arizona corporation, collectively, the Parties). On June 23, 2017, the Parties entered into a Settlement Agreement and Mutual Release (the Settlement Agreement) whereby the Parties agreed to dismiss all claims and counter-claims which became effective on July 11, 2017. The Parties specifically deny all allegations against them, respectively, whether by direct claim, counter-claim or cross-claim. As part of the Settlement Agreement, a third party agreed to purchase all shares of the Companys common stock owned by the Parties adverse to the Company for an undisclosed amount. On February 14, 2017, the Company sold a patent license revenue stream pursuant to a License Agreement with goEmerchant, LLC (goEmerchant). The patents which were the subject of the revenue stream expired on or about February 5, 2016. On February 20, 2017, goEmerchant contacted the Company asking for repayment of $54,784.43 (the Repayment Amount). The Company disputes the amount owed and believes there are additional payment obligations owed from goEmerchant to the Company which more than offsets the Repayment Amount. The Company intends to enforce all its rights under the License Agreement and collect any obligations owed to it. As of June 30, 2017, the issue is still ongoing and has not been resolved. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 6 Months Ended |
Jun. 30, 2017 | |
Notes | |
Supplemental Disclosure of Cash Flow Information | NOTE 13 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION The following table presents certain supplemental cash flow information: Six Months Ended June 30, 2017 2016 Cash paid for interest $ 1,248 $ 962 Cash paid for income taxes $ -- $ -- Debt converted into common stock $ 131,000 $ -- Cash advances converted to common stock $ 72,000 $ -- Conversion of advances to notes payable $ -- $ 182,000 Shares issued for prepaid expenses $ -- $ 70,000 Shares returned for legal services $ -- $ (1,595,000) Beneficial conversion feature on convertible notes $ 100,000 $ -- Shares issued for asset purchases $ 103,900 $ -- |
Summary of Significant Accoun19
Summary of Significant Accounting Policies: Cash and Cash Equivalents, Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Cash and Cash Equivalents, Policy | Cash and cash equivalents The Company considers cash and cash equivalents to include all stable, highly liquid investments with an original maturity of three months or less from the date of purchase. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies: Use of Estimates Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Use of Estimates Policy | 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 and disclosure of contingent assets and liabilities and 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. Actual results could differ from those estimates. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies: Revenue Recognition Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Revenue Recognition Policy | Revenue recognition Revenue is derived on a per transaction basis through the Companys gateway and payments platforms. The Company also earns revenue for services, account establishment fees and licensure on Software as a Service (SaaS) basis, and on a performance basis, such as when a client acquires a new customer through our platform. Revenue is recognized in accordance with Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements, as revised by SAB No. 104. As such, the Company recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collectability is probable. Sales are recorded net of sales discounts. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies: Accounts Receivable Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Accounts Receivable Policy | Accounts receivable, net Accounts receivable is reported at the customers outstanding balances, less any allowance for doubtful accounts. An allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies: Property and Equipment, Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Property and Equipment, Policy | Property and equipment Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. Depreciation is computed on the straight-line and accelerated methods for financial reporting purposes based upon the following estimated useful lives: Computer software 10 years Computer hardware 5 years Office furniture 7 years |
Summary of Significant Accoun24
Summary of Significant Accounting Policies: Long-lived Assets Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Long-lived Assets Policy | Long-lived assets The Company accounts for its long-lived assets in accordance with Accounting Standards Codification (ASC) Topic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the assets carrying value and fair value or disposable value. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies: Fair Value of Financial Instruments Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Fair Value of Financial Instruments Policy | Fair value of financial instruments We account for non-recurring fair value measurements of our non-financial assets and liabilities in accordance with ASC 820-10 Fair Value Measurement. This guidance defines fair value, establishes a framework for measuring fair value and addresses required disclosures about fair value measurements. This standard establishes a three-level hierarchy for fair value measurements based upon the significant inputs used to determine fair value. Observable inputs are those which are obtained from market participants external to the Company while unobservable inputs are generally developed internally, utilizing managements estimates, assumptions and specific knowledge of the assets/liabilities and related markets. The three levels are defined as follows: · · · If the only observable inputs are from inactive markets or for transactions which the Company evaluates as distressed, the use of Level 1 inputs should be modified by the company to properly address these factors, or the reliance of such inputs may be limited, with a greater weight attributed to Level 3 inputs. Due to the short-term nature of our financial assets and liabilities, we consider their carrying amounts to approximate fair value. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies: Goodwill Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Goodwill Policy | Goodwill The Company accounts for goodwill in accordance with ASC Topic 805-30-25, Accounting for Business Combinations (ASC Topic 805-30-25) and ASC Topic 350-20-35, Accounting for Goodwill - Subsequent Measurement (ASC Topic 350-20-35). ASC Topic 805-30-25 requires that the acquirer recognize goodwill as of the acquisition date as the excess of the fair value of the consideration transferred over the fair value of the net acquisition-date amounts of the identifiable assets and liabilities assumed. ASC Topic 350-20-35 requires that goodwill acquired in a purchase and determined to have an indefinite useful life is not amortized, but instead tested for impairment annually or more frequently when events or circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. The Companys annual goodwill impairment testing date is December 31 of each year. The Company first assesses qualitative factors to determine whether its necessary to perform the two-step goodwill impairment test. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. If the qualitative assessment results in an indication that its more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative assessment must be performed. Management has determined that the Company has one reporting unit for purposes of testing goodwill. The quantitative analysis involves estimating the fair value of its reporting unit utilizing a combination of valuation methods including market capitalization, the income approach and cash flows. Income and cash flow forecasts were used in the evaluation of goodwill based on managements estimate of future performance. If goodwill is determined to be impaired as a result of this analysis, an impairment loss is recorded equal to the difference between the assets carrying value and fair value. The Company recorded no impairment to goodwill during the two quarters ended June 30, 2017 or June 30, 2016. Goodwill was fully impaired at December 31, 2016. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies: Capitalized Software Development Costs Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Capitalized Software Development Costs Policy | Capitalized software development costs The Company sometimes capitalizes internal software development costs after establishing technological feasibility of a software application. Capitalized software development costs represent the costs associated with the development of the Companys software applications used to generate revenue from our customers. Amortization of such costs is recorded on a software application-by-application basis, based on the greater of the proportion of current year sales to the total of current and estimated future sales for the applications or the straight-line method over the remaining estimated useful life of the software application. The Company continually evaluates the recoverability of capitalized software costs, if any, and charges to operations amounts that are deemed unrecoverable for projects it abandons. The Company had no capitalized software development costs during the three and six months ended June 30, 2017. The Company recorded an impairment to its software development costs of $43,657 for the quarter ended June 30, 2016. Capitalized software development costs were zero at December 31, 2016. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies: Beneficial Conversion Feature Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Beneficial Conversion Feature Policy | Beneficial Conversion Feature If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (BCF). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies: Debt Discount Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Debt Discount Policy | Debt Discount The Company determines if the convertible debenture should be accounted for as liability or equity under ASC 480, Liabilities - Distinguishing Liabilities from Equity (ASC 480). ASC 480, applies to certain contracts involving a companys own equity, and requires that issuers classify the following freestanding financial instruments as liabilities. Mandatorily redeemable financial instruments, obligations that require or may require repurchase of the issuers equity shares by transferring assets (e.g., written put options and forward purchase contracts), and certain obligations where at inception the monetary value of the obligation is based solely or predominantly on: · · · If the entity determined the instrument meets the guidance under ASC 480 the instrument is accounted for as a liability with a respective debt discount. The Company records debt discounts in connection with raising funds through the issuance of promissory notes (see Notes 8 and 9). These costs are amortized to non-cash interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies: Stock-based Compensation, Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Stock-based Compensation, Policy | Stock-based compensation The Company accounts for stock-based payments to employees in accordance with ASC 718, Stock Compensation (ASC 718). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the statement of operations based on their fair values at the date of grant. The Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees (ASC 505-50). Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date. The Company calculates the fair value of option grants and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term forfeitures is distinct from cancellations or expirations and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized as compensation under ASC Topic 505-50. In accordance with ASC 505-50, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies: Loss Per Share Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Loss Per Share Policy | Loss per share We report earnings (loss) per share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of warrants and debt to purchase common shares would have an anti-dilutive effect. Potential common shares as of June 30, 2017 that have been excluded from the computation of diluted net loss per share were 3,862,920 shares and include 1,625,420 warrants and 2,237,500 options. At June 30, 2017, 690,000 of the 2,237,500 potential common shares that could be issued upon the exercise of the options had not vested, and 50,000 of the 1,625,420 common shares that could be issued upon the exercise of the warrants had not vested. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies: Income Taxes Policy (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Income Taxes Policy | Income taxes The Company accounts for its income taxes under the provisions of Income Taxes (ASC 740). The method of accounting for income taxes under ASC 740 is an asset and liability method. The asset and liability method requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. The Company did not recognize any deferred tax liabilities or assets at December 31, 2016 or during the six months ended June 30, 2017 or June 30, 2016. |
Summary of Significant Accoun33
Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Policies | |
Recent Accounting Pronouncements | Recent accounting pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Companys financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Companys financials properly reflect the change. In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-04 Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for any impairment tests performed after January 1, 2017. In January 2017, the FASB issued Accounting Standards Update (ASU) 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which clarifies the definition of a business and assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under this guidance, when substantially all the fair value of gross assets acquired is concentrated in a single asset (or group of similar assets), the assets acquired would not represent a business. In addition, to be considered a business, an acquisition would have to include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The amended guidance also narrows the definition of outputs by more closely aligning it with how outputs are described in FASB guidance for revenue recognition. This guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. |
Summary of Significant Accoun34
Summary of Significant Accounting Policies: Property and Equipment, Policy: Property and equipment estimated useful lives (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Property and equipment estimated useful lives | Computer software 10 years Computer hardware 5 years Office furniture 7 years |
Accounts Receivable, Net, Dis35
Accounts Receivable, Net, Disclosure: Schedule of Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Schedule of Accounts Receivable | June 30, December 31, 2017 2016 Due from customers and vendors $ -- $ 32,913 Due from processing activity 5,882 50,000 Due from stock receivable (See Note 10) 60,400 -- Total accounts receivable, net $ 66,282 $ 82,913 |
Prepaid Expenses and Deposits36
Prepaid Expenses and Deposits, Disclosure: Schedule of Prepaid Expenses and Deposits (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Schedule of Prepaid Expenses and Deposits | June 30, December 31, 2017 2016 Prepaid insurance $ 22,234 $ 46,489 Prepaid consulting fees (stock-based) 585,844 113,791 Deposits 5,374 -- Total prepaid expenses and deposits $ 613,452 $ 160,280 |
Property and Equipment, Net, 37
Property and Equipment, Net, Disclosure: Schedule of Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Schedule of Property and Equipment | June 30, December 31, 2017 2016 Office furniture & equipment $ 33,225 $ 33,225 Software $1,200 $1,200 Less: accumulated depreciation (22,829) (20,141) Total property and equipment, net $ 11,596 $ 14,284 |
Other Intangible Assets, Net,38
Other Intangible Assets, Net, Disclosure: Schedule of Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Schedule of Intangible Assets | June 30, Accumulated June 30, 2017 Gross Amortization 2017 Net License agreements and contracts $ 75,000 $ (17,500) $ 57,500 Domain names 75,000 (35,081) 39,919 Software 43,500 (1,208) 42,292 $ 193,500 $ (53,789) $ 139,711 December 31, Accumulated December 31, 2016 Gross Amortization 2016 Net License agreements and contracts $ 75,000 $ (10,000) $ 65,000 Domain names 75,000 (30,242) 44,758 Capitalized software costs 25,000 -- 25,000 $ 175,000 $ (40,242) $ 134,758 |
Options and Warrants, Disclos39
Options and Warrants, Disclosure: Schedule of Stock Options (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Schedule of Stock Options | Number of Options Weighted-Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2015 2,990,000 $0.426 8.10 Granted -- -- -- Exercised -- -- -- Forfeited/Cancelled (1,442,500) -- -- Outstanding at December 31, 2016 1,547,500 $0.357 7.56 Exercisable at December 31, 2016 1,431,666 $0.345 7.44 Outstanding at December 31, 2016 1,547,500 $0.357 7.56 Granted 690,000 $0.230 9.50 Exercised -- -- -- Forfeited/Cancelled -- -- -- Outstanding at June 30, 2017 2,237,500 $0.318 7.82 Exercisable at June 30, 2017 1,547,500 $0.357 7.06 |
Options and Warrants, Disclos40
Options and Warrants, Disclosure: Schedule of Stock Warrants (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Tables/Schedules | |
Schedule of Stock Warrants | Number of Warrants Weighted-Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2015 600,000 $0.500 1.47 Granted 883,420 - -- Exercised -- - -- Forfeited/Cancelled (200,000) - -- Outstanding at December 31, 2016 1,283,420 $0.249 2.99 Exercisable at December 31, 2016 1,183,420 $0.228 3.12 Outstanding at December 31, 2016 1,283,420 $0.249 2.99 Granted 342,000 $0.135 2.66 Exercised -- -- -- Forfeited/Cancelled -- -- -- Outstanding at June 30, 2017 1,625,420 $0.225 2.53 Exercisable at June 30, 2017 1,575,420 $0.216 2.24 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies: Property and Equipment, Policy: Property and equipment estimated useful lives (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Software and Software Development Costs | |
Property, Plant and Equipment, Useful Life | 10 years |
Computer Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and Fixtures | |
Property, Plant and Equipment, Useful Life | 7 years |
Summary of Significant Accoun42
Summary of Significant Accounting Policies: Capitalized Software Development Costs Policy (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Details | |
Impairment of software development costs | $ 43,657 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies: Loss Per Share Policy (Details) | 6 Months Ended |
Jun. 30, 2017shares | |
Details | |
Potential common shares excluded from the computation of diluted earnings per share | 3,862,920 |
Going Concern (Details)
Going Concern (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Details | |||
Net loss incurred | $ 586,738 | $ 1,434,829 | |
Accumulated deficit at end of period | $ 29,628,801 | $ 29,628,801 | $ 28,193,972 |
Accounts Receivable, Net, Dis45
Accounts Receivable, Net, Disclosure: Schedule of Accounts Receivable (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Accounts receivable, net | $ 66,282 | $ 82,913 |
Due from customers and vendors | ||
Accounts receivable, gross | 32,913 | |
Due from processing activity | ||
Accounts receivable, gross | 5,882 | $ 50,000 |
Due from stock receivable | ||
Accounts receivable, gross | $ 60,400 |
Prepaid Expenses and Deposits46
Prepaid Expenses and Deposits, Disclosure: Schedule of Prepaid Expenses and Deposits (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Prepaid expenses and other assets | $ 613,452 | $ 160,280 |
Prepaid insurances | ||
Prepaid expenses and other assets | 22,234 | 46,489 |
Prepaid consulting fees | ||
Prepaid expenses and other assets | 585,844 | $ 113,791 |
Deposits other | ||
Prepaid expenses and other assets | $ 5,374 |
Property and Equipment, Net, 47
Property and Equipment, Net, Disclosure: Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Less, accumulated depreciation | $ (22,829) | $ (20,141) |
Total property and equipment, net | 11,596 | 14,284 |
Furniture and Fixtures | ||
Property, plant and equipment, gross | 33,225 | 33,225 |
Software and Software Development Costs | ||
Property, plant and equipment, gross | $ 1,200 | $ 1,200 |
Property and Equipment, Net, 48
Property and Equipment, Net, Disclosure (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Details | ||||
Depreciation expense | $ 1,344 | $ 1,479 | $ 2,687 | $ 2,806 |
Other Intangible Assets, Net,49
Other Intangible Assets, Net, Disclosure: Schedule of Intangible Assets (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Intangible assets, gross | $ 193,500 | $ 175,000 |
Accumulated amortization of intangible assets | (53,789) | (40,242) |
Intangible assets, net | 139,711 | 134,758 |
License agreements and contracts | ||
Intangible assets, gross | 75,000 | 75,000 |
Accumulated amortization of intangible assets | (17,500) | (10,000) |
Intangible assets, net | 57,500 | 65,000 |
Domain names | ||
Intangible assets, gross | 75,000 | 75,000 |
Accumulated amortization of intangible assets | (35,081) | (30,242) |
Intangible assets, net | 39,919 | 44,758 |
Software+ | ||
Intangible assets, gross | 43,500 | |
Accumulated amortization of intangible assets | (1,208) | |
Intangible assets, net | $ 42,292 | |
Capitalized software costs | ||
Intangible assets, gross | 25,000 | |
Intangible assets, net | $ 25,000 |
Other Intangible Assets, Net,50
Other Intangible Assets, Net, Disclosure (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Amortization expense related to capitalized software | $ 7,377 | $ 113,392 | $ 13,547 | $ 221,761 |
Digital marketing software assets | ||||
Common stock issued for purchase of assets | 300,000 | |||
Value of common stock issued in purchase of assets | $ 43,500 |
Notes Payable and Convertible51
Notes Payable and Convertible Notes Payable, Net of Unamortized Discount (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Proceeds from notes and advances | $ 226,000 | |||
Interest expense, net | $ 37,888 | $ 17,072 | 111,967 | $ 17,662 |
Payments on notes and advances - related parties | 20,000 | 12,500 | ||
Bridge Note Agreements - 2017 Investor | ||||
Proceeds from notes and advances | 46,000 | |||
Interest expense, net | 14,142 | 32,716 | ||
Amount of debt converted for common stock | 31,000 | |||
Notes and advances payable | 15,000 | 15,000 | ||
Bridge Note Agreement - December 2016 - shareholder | ||||
Interest expense, net | 525 | |||
Notes and advances payable | 5,000 | 5,000 | ||
Convertible Promissory Note - May 18, 2016 | ||||
Interest expense, net | 2,498 | 4,969 | ||
Notes and advances payable | 167,000 | 167,000 | ||
Unamortized debt discount | 87,067 | 87,067 | ||
Related to amortization of the discount on unpaid notes - May 18, 2016 Convertible note | ||||
Interest expense, net | 20,818 | 41,407 | ||
Promissory Grid Note - December 15, 2011 | ||||
Notes and advances payable | $ 44,552 | 44,552 | ||
Payments on notes and advances - related parties | $ 4,000 | $ 7,500 |
Convertible Notes Payable - R52
Convertible Notes Payable - Related Party, Net of Unamortized Discount (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Interest expense - related party | $ 6,865 | $ 6,024 | $ 112,453 | $ 6,024 | |
Payments on notes and advances - related parties | 20,000 | $ 12,500 | |||
Bridge Note Agreement - March 3, 2017 - 7% stockholder | |||||
Amount of debt converted for common stock | $ 100,000 | ||||
Interest expense - related party | 100,000 | ||||
Bridge Note Agreement - December 2016 - director | |||||
Interest expense - related party | 1,102 | ||||
Payments on notes and advances - related parties | 10,500 | ||||
Promissory Note Agreement - March 25, 2017 - 12% stockholder | |||||
Interest expense - related party | 1,496 | 2,975 | |||
Notes and advances payable | 12,237 | 12,237 | |||
Related to amortization of the discount on unpaid notes - March 25, 2017 promissory note | |||||
Interest expense - related party | $ 4,155 | $ 8,265 |
Stockholders' Equity Disclosu53
Stockholders' Equity Disclosure (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Preferred stock authorized to be issued | 50,000,000 | 50,000,000 | |
Par value of preferred stock | $ 0.001 | $ 0.001 | |
Common stock authorized to be issued | 300,000,000 | 300,000,000 | |
Par value of common stock | $ 0.001 | $ 0.001 | |
Common stock sold for cash | |||
Common stock issued for cash | 815,832 | 397,148 | |
Proceeds from stock issued for cash | $ 110,000 | $ 47,490 | |
Incentive to purchase Company assets | |||
Common stock issued, other | 1,870,000 | ||
Value of stock issued, other | $ 60,000 | $ 187,000 | |
Repayment of debt | |||
Common stock issued for debt conversion | 310,000 | 1,000,000 | |
Amount of debt converted for common stock | $ 31,000 | $ 100,000 | |
Stock compensation for services - consultants and others | |||
Common stock issued for services | 1,475,669 | 96,000 | |
Value of stock issued for services | $ 258,266 | $ 11,300 | |
Recorded as a prepaid expense | $ 198,080 | ||
Stock compensation for services - directors and employees | |||
Common stock issued for services | 3,587,482 | 2,011,508 | |
Value of stock issued for services | $ 448,109 | $ 217,817 | |
Recorded as a prepaid expense | $ 316,250 | ||
Repayment of cash advance | |||
Common stock issued, other | 444,444 |
Options and Warrants, Disclos54
Options and Warrants, Disclosure (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Authorized amount of common stock under 2012 Stock Option Plan | 6,000,000 |
Number of options granted in period | 690,000 |
Options to employees and consultants | |
Number of options granted in period | 690,000 |
Option exercise price | $ / shares | $ 0.23 |
Options and Warrants, Disclos55
Options and Warrants, Disclosure: Schedule of Stock Options (Details) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Details | |||
Number of options outstanding | 2,237,500 | 1,547,500 | 2,990,000 |
Weighted average exercise price (options outstanding) | $ 0.318 | $ 0.357 | $ 0.426 |
Number of options cancelled during the period | (1,442,500) | ||
Number of options exercisable | 1,547,500 | 1,431,666 | |
Weighted average exercise price (options exercisable) | $ 0.357 | $ 0.345 | |
Number of options granted in period | 690,000 |
Options and Warrants, Disclos56
Options and Warrants, Disclosure: Schedule of Stock Warrants (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Details | |||
Number of warrants outstanding | 1,625,420 | 1,283,420 | 600,000 |
Weighted-Average Exercise Price (Warrants outstanding) | $ 0.225 | $ 0.249 | $ 0.500 |
Number of warrants granted | 342,000 | 883,420 | |
Number of warrants forfeited/cancelled | (200,000) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jul. 03, 2017 | Jul. 31, 2017 |
Sale of the Company's license to its payment service provider software | ||
Sale of company assets, receivable | $ 30,000 | |
Sale of the Company's portfolio of merchant accounts | ||
Sale of company assets, receivable | $ 102,306.46 | |
Proceeds from sale of company assets | $ 238,715.06 |
Supplemental Disclosure of Ca58
Supplemental Disclosure of Cash Flow Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash paid for interest | $ 1,248 | $ 962 |
Beneficial conversion feature on convertible notes | 100,000 | |
Debt converted into common stock | ||
Noncash transaction, value recorded | 131,000 | |
Cash advances converted to common stock | ||
Noncash transaction, value recorded | 72,000 | |
Conversion of advances to notes payable | ||
Noncash transaction, value recorded | 182,000 | |
Common shares issued for prepaid expenses | ||
Noncash transaction, value recorded | 70,000 | |
Shares returned for legal settlement | ||
Noncash transaction, value recorded | $ (1,595,000) | |
Common shares issued for asset purchases | ||
Noncash transaction, value recorded | $ 103,900 |