Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Oct. 31, 2016 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | ID Global Solutions Corp | ||
Entity Central Index Key | 1,534,154 | ||
Document Type | 10-K | ||
Trading Symbol | IDGS | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 8,666,025 | ||
Entity Common Stock, Shares Outstanding | 238,205,539 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash | $ 349,873 | $ 159,296 |
Accounts receivable, net | 509,027 | |
Inventory | 516,663 | |
Other current assets | 134,224 | |
Total current assets | 1,509,787 | 159,296 |
Property and equipment, net | 37,775 | 21,582 |
Other assets | 319,592 | 174,387 |
Intangible assets, net | 1,436,534 | 421,774 |
Goodwill | 166,689 | |
Total Assets | 3,470,377 | 777,039 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 717,500 | 150,228 |
Convertible notes payable, net | 383,346 | |
Derivative liability | 25,445,645 | |
Related party payables | 60,200 | |
Contingent purchase consideration (Note 7) | 370,125 | |
Notes payable, net | 634,069 | |
Notes payable related parties | 48,417 | |
Total Current Liabilities | 27,550,685 | 258,845 |
Commitments and Contingencies | ||
Stockholders' Equity (Deficit): | ||
Common stock, $0.0001 par value, 500,000,000 and 300,000,000 shares authorized at December 31, 2015 and 2014, respectively; 187,854,139 and 163,538,289 shares issued and outstanding at December 31, 2015 and 2014, respectively | 18,785 | 16,354 |
Additional paid-in capital | 14,923,936 | 2,897,261 |
Accumulated deficit | (39,074,590) | (2,395,421) |
Accumulated other comprehensive income | 51,561 | |
Total Stockholder's Equity (deficit) | (24,080,308) | 518,194 |
Total Liabilities and Stockholders' Equity (Deficit) | $ 3,470,377 | $ 777,039 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, at par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 500,000,000 | 300,000,000 |
Common stock, issued | 187,854,139 | 163,538,289 |
Common stock, outstanding | 187,854,139 | 163,538,289 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Revenue, related party | $ 500,000 | |
Revenue, net | 235,364 | |
Revenue, net | 735,364 | |
Operating Expenses | ||
General and administrative | 9,003,143 | 717,505 |
Research and development | 480,789 | 1,500 |
Depreciation and amortization | 147,052 | 48,841 |
Total operating expenses | 9,630,984 | 767,846 |
Loss from operations | (8,895,620) | (767,846) |
Other Income (Expense): | ||
Loss on derivative liability | (26,647,021) | |
Loss on sale of property and equipment | (71,616) | |
Interest expense | (1,136,528) | (65,225) |
Loss before income tax | (36,679,169) | (904,687) |
Income tax expense | ||
Net loss | $ (36,679,169) | $ (904,687) |
Net loss per share: Basic and diluted (in dollars per share) | $ (0.21) | $ (0.01) |
Weighted average shares outstanding: Basic and Diluted (in shares) | 175,696,214 | 161,405,947 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements Of Comprehensive Loss | ||
Net Loss | $ (36,679,169) | $ (904,687) |
Other Comprehensive Income (Loss): | ||
Foreign currency translation gains | 51,561 | |
Income tax benefit (expense) | ||
Comprehensive Loss | $ (36,627,608) | $ (904,687) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Total |
Balance, beginning at Dec. 31, 2013 | $ 16,062 | $ 1,731,878 | $ (1,490,734) | $ 257,206 | |
Balance, beginning (in shares) at Dec. 31, 2013 | 160,623,289 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beneficial conversion feature | |||||
Issuance of shares for conversion of debt and accrued interest | $ 292 | 1,165,383 | 1,165,675 | ||
Issuance of shares for conversion of debt and accrued interest (in shares) | 2,915,000 | ||||
Shares issued for acquisition of MultiPay | |||||
Shares issued for services | |||||
Net loss | (904,687) | (904,687) | |||
Foreign currency translation | |||||
Balance, ending at Dec. 31, 2014 | $ 16,354 | 2,897,261 | (2,395,421) | $ 518,194 | |
Balance, ending (in shares) at Dec. 31, 2014 | 163,538,289 | 163,538,289 | |||
Balance, beginning at Dec. 31, 2014 | $ 16,354 | 2,897,261 | (2,395,421) | $ 518,194 | |
Balance, beginning (in shares) at Dec. 31, 2014 | 163,538,289 | 163,538,289 | |||
Balance, beginning at Dec. 31, 2014 | $ 16,354 | 2,897,261 | (2,395,421) | $ 518,194 | |
Balance, beginning (in shares) at Dec. 31, 2014 | 163,538,289 | 163,538,289 | |||
Balance, beginning at Dec. 31, 2014 | $ 16,354 | 2,897,261 | (2,395,421) | $ 518,194 | |
Balance, beginning (in shares) at Dec. 31, 2014 | 163,538,289 | 163,538,289 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock based compensation expense | 6,320,114 | $ 6,320,114 | |||
Issuance of warrants in connection with debt | 1,062,704 | 1,062,704 | |||
Beneficial conversion feature | 42,275 | 42,275 | |||
Issuance of shares for conversion of debt and accrued interest | $ 604 | 180,601 | 181,205 | ||
Issuance of shares for conversion of debt and accrued interest (in shares) | 6,040,166 | ||||
Derivatives reclassifed to equity due to debt conversion | 2,706,167 | 2,706,167 | |||
Shares issued for acquisition of MultiPay | $ 610 | 859,881 | 860,491 | ||
Shares issued for acquisition of MultiPay (in shares) | 6,101,517 | ||||
Shares issued for services | $ 222 | 557,528 | $ 557,750 | ||
Shares issued for services (in shares) | 2,227,501 | 12,174,167 | |||
Shares issued for debt issuance costs | $ 995 | 297,405 | $ 298,400 | ||
Shares issued for debt issuance costs (in shares) | 9,946,666 | ||||
Net loss | (36,679,169) | (36,679,169) | |||
Foreign currency translation | $ 51,561 | 51,561 | |||
Balance, ending at Dec. 31, 2015 | $ 18,785 | $ 14,923,936 | $ (39,074,590) | $ 51,561 | $ (24,080,308) |
Balance, ending (in shares) at Dec. 31, 2015 | 187,854,139 | 187,854,139 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (36,679,169) | $ (904,687) |
Adjustments to net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 147,052 | 148,841 |
Loss on sale of property and equipment | 71,616 | |
Stock based compensation | 6,320,114 | |
Shares issued for services | 557,750 | |
Amortization of debt discount | 832,775 | |
Amortization of debt issuance costs | 154,447 | |
Loss on derivative liability | 26,647,021 | |
Write-off of intangible asset | 200,000 | |
Loss on investment | 72,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (448,355) | |
Other current assets | (62,442) | 112,000 |
Inventory | (433,598) | |
Accounts payable and accrued expenses | 229,677 | 165,393 |
Due to related parties | (60,200) | 44,025 |
Net cash used in operating activities | (2,522,928) | (362,812) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (16,265) | (419,580) |
Proceeds from sale of property and equipment | 240,000 | |
Investment in other assets | (133,117) | (174,387) |
Investment in intangible assets-patents | (37,621) | (53,076) |
Net cash used in investing activities | (187,003) | (407,043) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of convertible notes payable and warrants | 1,040,000 | |
Proceeds from issuance of notes payable and warrants | 2,200,000 | 1,148,417 |
Debt issuance costs paid | (296,400) | |
Principal payments on notes payable | (205,331) | (224,615) |
Principal payments on notes payable, related parties | (91,322) | |
Proceeds from notes payable, related parties | 202,000 | |
Net cash provided by financing activities | 2,848,947 | 923,802 |
Net foreign currency translation adjustment | 51,561 | |
Net change in cash | 190,577 | 153,947 |
Cash, beginning of the year | 159,296 | 5,349 |
Cash, end of the year | 349,873 | 159,296 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the year for interest | 199,967 | |
Non-cash investing and financing activities: | ||
Issuance of common stock for conversion of notes payable and accrued interest | 181,205 | 1,165,675 |
Derivative liability reclassified to equity due to conversion of notes payable to common stock | 2,706,167 | |
Note payable, related party and accrued interest settled through issuance of convertible note payable | 172,095 | |
Debt discount for fair value of warrants issued in connection with debt | 1,062,704 | |
Beneficial conversion feature | 42,275 | |
Issuance of common stock for debt issuance costs | 298,400 | |
Issuance of common stock for acquisition of MultiPay | 860,491 | |
Liabilities assumed in acquisition of MultiPay | 909,721 | |
Assets acquired in acquisition of MultiPay | $ 1,770,211 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ID Global Solutions Corporation (formerly IIM Global Corporation) (formerly Silverwood Acquisition Corporation) ("ID Global" or the "Company") was incorporated on September 21, 2011 under the laws of the State of Delaware. ID Global is a provider of secure, biometric identification, identity management and electronic transaction processing services. Founded to pioneer innovative digital identification solutions, the Company is focused on addressing the growing need for highly secure and convenient methods for identity management during a variety of electronic transactions. The Company provides its biometric identification services to government and public sector organizations, seeking to verify and manage identities for a variety of security purposes, including issuing identity cards and exercise of rights such as voting in elections. With the acquisition of MultiPay S.A.S., the Company acquired a transaction processing platform that offers secure multifunctional payment gateway services to merchants and financial institutions. With the development of the OnePay TM Going Concern The Company has an accumulated deficit of $39,074,590 as of December 31, 2015. The Companys continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or obtain additional financing from its stockholders and/or other third parties. These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from the Companys current shareholders, the ability of the Company to obtain additional equity financing to continue operations, the Companys ability to generate sufficient cash flows from operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues and cash flows, none of which can be assured. There is no assurance that the Company will ever be profitable. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Basis of Consolidation The consolidated financial statements include the accounts of ID Global Solutions and its wholly-owned subsidiaries MultiPay S.A.S,. ID Global LATAM and IDGS S.A.S.. All significant intercompany balances and transactions have been eliminated in consolidation. The summary of significant accounting policies presented below is designed to assist in understanding the Companys consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Companys management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (US GAAP) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. Use of Estimates In preparing these consolidated financial statements in conformity with US GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to equity instruments and share based payments. Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service that are provided on a consumption basis (for example, the number of transactions processed over a period of time) is recognized commensurate with the customer utilization of such resources. Generally, the contract calls for a minimum number of transactions to be charged by the Company on a monthly basis. Accordingly, the Company records as revenue the minimum transactional fee based on the passage of a months time. Amounts in excess of the monthly minimum, are charged to customers based on the actual number of transactions. Consulting services revenue is recognized as services are rendered, generally based on the negotiated hourly rate in the consulting arrangement and the number of hours worked during the period. Consulting revenue for fixed-price services arrangements is recognized as services are provided. Taxes Collected from Customers and Remitted to Governmental Authorities Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a gross basis in our consolidated statements of operations. Accounts Receivable All customers are granted credit on a short-term basis and related credit risks are considered minimal. The Company routinely reviews its trade receivables and makes provisions for probable doubtful accounts; however, those provisions are estimates and actual results could differ from those estimates and those differences may be material. Trade receivables are deemed uncollectible and removed from accounts receivable and the allowance for doubtful accounts when collection efforts have been exhausted. At December 31, 2015 no allowance for doubtful accounts was necessary. At December 31, 2014 there were no accounts receivable. Inventories Inventories are stated at the lower of cost (using the first-in, first-out method) or market. Inventories consist primarily of kiosks that provide electronic ticketing for transit systems. Concentration of Credit Risk The Companys financial instruments that potentially expose the Company to a concentration of credit risk consist of cash and accounts receivable. The Companys cash is deposited at financial institutions and cash balances held in US bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At various times during the year, the Company may have exceeded amounts insured by the FDIC. At December 31, 2015, the Company held approximately $61,000 in cash not insured by the FDIC. For the Companys Colombian subsidiaries, no amounts are insured. At December 31, 2015, the Company held approximately $42,000 in cash maintained in Colombian banks. Revenues and accounts receivable: For the year ending December 31, 2015, 68% of consolidated revenues were derived by one US customer, which is also a related party and at December 31, 2015, 98% of consolidated accounts receivable are due to the Company by the same related party US customer. For the year ending December 31, 2015, 32% of revenues were derived by the Companys Multipay subsidiary in Colombia. For the year ending December 31, 2015, 61% of Multipays revenues were derived by three customers. There were no accounts receivable and revenues as of and for the year ending December 31, 2014. Income Taxes The Company accounts for income taxes under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740 Income Taxes. Property and Equipment, net Property and equipment consist of furniture and fixtures and computer equipment, and are stated at cost. Property and equipment are depreciated using the straight-line method over the estimated service lives of three to five years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal. Depreciation expense amounted to $20,072 and $24,393 for the years ended December 31, 2015 and 2014, respectively. Software Development Costs Research and development (R&D) costs are expensed as incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a products technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Companys products are released soon after technological feasibility has been established and as a result software development costs were expensed as incurred. Other Assets Other assets consist primarily of costs associated with the hardware construction of HDR mobile biometric devises. As of December 31, 2015, the devices are still under construction and have not been placed in service. Upon completion, the amounts will be recorded as property and equipment and depreciated over their estimated useful lives. Intangible Assets Excluding goodwill, acquired intangible assets and internally developed software are amortized over their useful lives unless the lives are determined to be indefinite. Acquired amortizing intangible assets are carried at cost, less accumulated amortization. Internally developed software costs are capitalized upon reaching technological feasibility. Amortization of acquired finite-lived intangible assets is computed over the useful lives of the respective assets. The Company amortizes intangible assets over a ten year period. Amortization of internally developed software is amortized over a three-year period. Amortization expense amounted to $126,980 and $24,448 for the years ended December 31, 2015 and 2014, respectively. Stock-based compensation The Company has accounted for stock-based compensation under the provisions of FASB ASC 718 Stock Compensation which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the simplified method which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. Impairment of Long-Lived Assets Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted estimated future cash flows, an impairment review is performed. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Generally, fair value is determined using valuation techniques such as expected discounted cash flows or appraisals, as appropriate. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated or amortized. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. There were no impairment charges incurred during the years ended December 31, 2015 or 2014. Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to vendors contracted to perform research projects and develop technology for the Company's products. Research and development costs are expensed as incurred. Net Loss per Common Share The Company computes net loss per share in accordance with FASB ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible notes and stock warrants, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options, warrants and conversion of convertible notes. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. Derivative Instruments The Company accounts for derivatives through the use of a fair value concept whereby all of the Companys derivative positions are stated at fair value in the accompanying consolidated balance sheets. Due to the potential adjustment in the conversion price associated with certain of the convertible debentures and the potential adjustment in the exercise price of certain of the warrants, the Company has determined that certain of the conversion features and warrants are considered derivative liabilities. Common Stock Purchase Warrants The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, Derivatives and Hedging Contracts in Entitys Own Equity (ASC 815-40). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). All outstanding warrants as of December 31, 2015 which did not contain down round anti-dilution provisions (see Note 9) were classified as equity. Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of net identified tangible and intangible assets acquired. The Company performs an annual impairment test of goodwill and further periodic tests to the extent indicators of impairment develop between annual impairment tests. The Companys impairment review process compares the fair value of the reporting unit to its carrying value, including the goodwill related to the reporting unit. To determine the fair value of the reporting unit, the Company may use various approaches including an asset or cost approach, market approach or income approach or any combination thereof. These approaches may require the Company to make certain estimates and assumptions including future cash flows, revenue and expenses. These estimates and assumptions are reviewed each time the Company tests goodwill for impairment and are typically developed as part of the Companys routine business planning and forecasting process. While the Company believes its estimates and assumptions are reasonable, variations from those estimates could produce materially different results. The Company did not recognize any goodwill impairments in the year ended December 31, 2015. There was no goodwill in 2014. Business Combinations The Company recognizes, with certain exceptions, 100% of the fair value of assets acquired, liabilities assumed, and noncontrolling interests when the acquisition constitutes a change in control of the acquired entity. Shares issued in consideration for a business combination, contingent consideration arrangements and pre-acquisition loss and gain contingencies are all measured and recorded at their acquisition-date fair value. Subsequent changes to fair value of contingent consideration arrangements are generally reflected in earnings. Any in-process research and development assets acquired are capitalized as of the acquisition date. Acquisition-related transaction costs are expensed as incurred and any changes in an acquirers existing income tax valuation allowances and tax uncertainty accruals are recorded as an adjustment to income tax expense. The operating results of entities acquired are included in the accompanying consolidated statements of operations from the date of acquisition (see Note 7). Foreign Currency Translation The assets, liabilities and results of operations of certain of ID Global's subsidiaries are measured using their functional currency which is the currency of the primary foreign economic environment in which they operate. Upon consolidating these subsidiaries with ID Global, their assets and liabilities are translated to U.S. dollars at currency exchange rates as of the balance sheet dates and their revenues and expenses are translated at the weighted average currency exchange rates during the applicable reporting periods. Translation adjustments resulting from the process of translating these subsidiaries financial statements are reported in other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income (loss). Fair Value Measurements ASC 820, Fair Value Measurements, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company has derivative liabilities required to be recorded at fair value on a recurring basis at December 31, 2015 or 2014. Fair Value of Financial Instruments The Company is required to disclose fair value information about financial instruments when it is practicable to estimate that value. The carrying amounts of the Companys cash, accounts receivable, other receivables, accounts payable, accrued expenses, and other current liabilities approximate their estimated fair value due to the short-term maturities of these financial instruments and because related interest rates offered to the Company approximate current rates. The fair value of the Companys convertible notes payable and promissory notes payable are $1,038,095 and $2,100,000, respectively, which differs from the $383,346 and $537,400, respectively, carrying value of the debt instruments at December 31, 2015 because of the significant debt discounts recorded as discussed in Notes 8 and 9. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under US GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing US GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Management of the Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and have not yet determined the method by which it will adopt the standard in 2017. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial StatementsGoing Concern, Disclosure of Uncertainties about an entitys Ability to Continue as a Going Concern. This ASU amends ASC205-40. ASC 205-40 provided guidance about managements responsibility to evaluate whether there is substantial doubt about an entitys ability to continue as a going concern and to provide related note disclosures. With the amendments made by ASU 2014-15, financial statement disclosures will be required when there is substantial doubt about an entitys ability to continue as a going concern or when substantial doubt is alleviated as a result of considerations of managements plans. The new standard provides management with principles for evaluating whether there is substantial doubt by: providing a definition of substantial doubt, requiring an evaluation every reporting period (including interim periods), providing principles for considering the mitigating effect of managements plans, requiring certain disclosures when substantial doubt is alleviated as a result of consideration of managements plans, requiring an express statement and other disclosures when substantial doubt is not alleviated, and requiring an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (ASU 2015-11), modifying the accounting for inventory. Under ASU 2015-11, the measurement principle for inventory will change from lower of cost or market value to lower of cost and net realizable value. ASU 2015-11 defines net realizable value as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is applicable to inventory that is accounted for under the first-in, first-out method and is effective for reporting periods after December 15, 2016, with early adoption permitted. The Company has not yet determined the impact of adoption on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740)" ("ASU 2015-17"). Currently US GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. The amendments under ASU 2015-17 will require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update will be effective for fiscal years beginning after December 15, 2017 and interim periods thereafter. The adoption of ASU 2015-17 is not expected to have a material impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02") that will supersede current guidance related to accounting for leases. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard will be effective for fiscal years beginning after December 15, 2018 and interim periods thereafter, with early adoption permitted. The standard is required to be adopted using the modified retrospective approach. The Company is currently evaluating the potential impact this guidance will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 includes provisions to simplify certain aspects related to the accounting for share-based awards and the related financial statement presentation. This ASU includes a requirement that the tax effect related to the settlement of share-based awards be recorded in income tax benefit or expense in the statements of earnings. This change is required to be adopted prospectively in the period of adoption. In addition, the ASU modifies the classification of certain share-based payment activities within the statements of cash flows and these changes are required to be applied retrospectively to all periods presented, or in certain cases prospectively, beginning in the period of adoption. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. |
STOCK OPTION GRANTS
STOCK OPTION GRANTS | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTION GRANTS | NOTE 2 STOCK OPTION GRANTS The ID Global Solutions Corporation Equity Compensation Plan established on November 31, 2014 (the 2014 Plan) covers 25,000,000 shares of common stock. The 2014 Plan contains an evergreen formula pursuant to which the number of shares of common stock available for issuance under the 2014 Plan will automatically increase on the first trading day of January each calendar year during the term of the 2014 Plan, beginning with calendar year 2015, by an amount equal to 2% of the total number of shares of common stock outstanding on the last trading day in December of the immediately preceding calendar year, up to a maximum annual increase of 250,000 shares of common stock. The purpose of the 2014 Plan is to enable the Company to offer its employees, officers, directors and consultants. The 2014 Plan is administered by our board of directors. Plan options may either be: incentive stock options (ISOs), non-qualified options (NSOs), awards of our common stock, or rights to make direct purchases of our common stock which may be subject to certain restrictions. The Company did not issue any securities under the 2014 Plan during 2014. All securities issued under the 2014 Plan occurred during 2015. The Company has no other stock options plans in effect as of December 31, 2015. The following is a summary of stock option activity: Weighted Weighted Average Average Remaining Aggregate Options Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, December 31, 2014 - Granted 47,800,000 $ 0.32 Outstanding, December 31, 2015 47,800,000 $ 0.32 4.74 $ 7,698,650 Exercisable, December 31, 2015 19,962,500 $ 0.36 4.74 $ 2,353,163 The exercise price for options outstanding and exercisable at December 31, 2015 is as follows: Outstanding Exercisable Number of Exercise Number of Exercise Options Price Options Price 3,500,000 $ 0.0001 875,000 $ 0.0001 8,000,000 $ 0.10 2,687,500 $ 0.10 6,300,000 $ 0.15 1,400,000 $ 0.15 30,000,000 $ 0.45 15,000,000 $ 0.45 47,800,000 19,962,500 For options granted during 2015 where the exercise price was greater than the stock price at the date of the grant, the weighted-average fair value of such options was $0.01 and the weighted-average exercise price of such options was $0.01. For options granted during 2015 where the exercise price was less than the stock price at the date of the grant, the weighted-average fair value of such options was $0.32 and the weighted-average exercise price of such options was $0.34. No options were granted during 2015 where the exercise price was equal to the stock price at the date of grant. The fair value of the stock options is being amortized to stock based compensation expense over the vesting period. The Company recorded stock based compensation expense of $6,320,114 during the year ended December 31, 2015, which is included in general and administrative expenses in the accompanying statements of operations. At December 31, 2015, the unamortized stock option expense was $7,688,515 which will be amortized to expense through March 31, 2019. There was no stock compensation for the year ending December 31, 2014. The assumptions used in calculating the fair value of options granted using the Black-Scholes option- pricing model for options granted are as follows: Stock price $0.02 to $0.55 Risk-free interest rate 1.4% to 1.5% Expected life of the options 2.5 to 4.21 years Expected volatility 85% to 93% Expected dividend yield 0% |
INTANGIBLE ASSETS, NET AND GOOD
INTANGIBLE ASSETS, NET AND GOODWILL | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET AND GOODWILL | NOTE 3 INTANGIBLE ASSETS, NET AND GOODWILL Intangible assets consist of the following: December 31, December 31, 2015 2014 Software and other technology: Biometric Handled Devices (HDR) $ 183,785 $ 170,394 SRIO Mobil Payments Solution (SRIO) 130,603 121,731 MultiPay kiosk project 29,937 - Payment Gateway SW 295,816 - Tranxa Transaction / Switch SW 373,970 - Phobos Management SW 118,754 - Terminal Manager SW 179,331 - Mobile Banking SW 261,446 - ID Station Kiosk 10,818 10,818 Software - 200,000 Other 31,609 - Patents and Licenses 14,528 - Total Intellectual Property 1,630,597 502,943 Noncompete agreements 14,087 - Total Intangible assets 1,644,684 502,943 Less: accumulated amortization (208,150 ) (81,169 ) Intangible Assets, Net $ 1,436,534 $ 421,774 Intangible assets consist of legal and global patent registration costs related to the Companys technology HDR (Handheld biometric mobile devices) and SRIO (Biometric wallet devices). Intangible assets are amortized over ten years. Future amortization expense of intangible assets for each of the years ended December 31 is as follows (in thousands): 2016 $ 166,830 2017 165,928 2018 162,353 2019 160,707 2020 158,636 Thereafter 622,080 $ 1,436,534 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4 PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: December 31, December 31, 2015 2014 Computers and equipment $ 88,047 $ 35,819 Furniture and fixtures 69,168 54,016 $ 157,215 $ 89,835 Less: accumulated depreciation 119,440 68,253 Property and Equipment, net $ 37,775 $ 21,582 In May 2014, the Company acquired an office building, which was sold in December 2014 for $240,000. The Company recorded a loss on sale of the building of $71,616 in the accompanying consolidated statement of operations for the year ended December 31, 2014 (Note 15). |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | NOTE 5 OTHER ASSETS Other assets consist primarily of costs associated with the construction of the HDR (Handheld Document Reader) mobile biometric devices, which consisted of the following as of : December 31, 2015 December 31, 2014 ID Partner $ 225,862 $ 174,387 ID Complete 93,730 - $ 319,592 $ 174,387 |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE 6 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of the following: December 31, December 31, 2015 2014 Accounts payable $ 301,455 $ 40,488 Accrued interest on loans 96,579 - Accrued liabilities 319,466 109,740 Total accounts payable and accrued liabilities $ 717,500 $ 150,228 Related party payables $ - $ 60,200 |
MULTIPAY ACQUISITION
MULTIPAY ACQUISITION | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
MULTIPAY ACQUISITION | NOTE 7 MULTIPAY ACQUISITION On April 6, 2015 (the "Closing Date"), the Company and all of the shareholders (the "Multipay Shareholders") of Multipay S.A., a Colombian corporation ("Multipay"), closed (the "Closing") on the Share Purchase Agreement entered into between the parties on March 6, 2015. As a result of the Closing, the Company acquired 100% of the issued and outstanding shares of Multipay (the "Multipay Shares") from the Multipay Shareholders on a fully diluted basis. In consideration for the Multipay Shares, the Company agreed to issue to the Multipay Shareholders up to an aggregate of 7,600,000 shares of common stock of the Company. Under the terms of the initial agreement, within ten days of the Closing Date, the Company was required to issue 7,000,000 shares of common stock. Upon the Multipay Shareholders paying certain liabilities in the approximate amount of $370,000, the Company was required to deliver the balance of 600,000 shares of common stock to the Multipay Shareholders. In the event the Multipay Shareholders do not pay the entire amount of the certain liabilities by the 12-month anniversary of the Closing Date, the Company will not be required to deliver the remaining shares of common stock. On May 7, 2015, the Company and Multipay executed an amendment to the Share Purchase Agreement to 1) amend the number of shares to be issued within ten days of the Closing Date from 7,000,000 shares to 6,101,517 shares; and 2) to amend the balance of shares to be delivered from 600,000 shares to 1,498,483 shares, upon the payment of certain liabilities by the Multipay Shareholders. The payment of these shares has been extended by six months to November 7, 2016. The 6,101,517 shares were issued on May 18, 2015. The Company has recorded a contingent liability of approximately $370,000 because of the contingency of the shares to be issued and debt to be released upon the payment of certain liabilities by the Multipay Shareholders. In accordance with ASC 805, Business Combinations, the Company accounted for the acquisition of Multipay as a business combination using the acquisition method of accounting. The purchase price was allocated to specific identifiable tangible and intangible assets at their respective fair values at the date of the acquisition. The following table summarizes the total fair value of consideration transferred as well as the fair values of the assets acquired and liabilities assumed. Fair value of common stock $ 860,491 Liabilities assumed 909,721 Total fair value of consideration transferred $ 1,770,212 Cash $ 987 Accounts receivable 60,673 Inventory 62,861 Other assets 171,133 Property and equipment 20,000 Intellectual property 1,273,781 Non-compete agreement 14,087 Total identifiable tangible assets acquired 1,603,522 Goodwill $ 166,689 Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company, which are further described above. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. See Notes 1 and 3 for additional information about goodwill and other intangible assets. The recognized goodwill related to MultiPay is directly attributable to its payment gateway platform. As noted above, control was obtained on April 6, 2015, pursuant to the Share Purchase Agreement at which time the management of IDGS took over the operations of MultiPay. Control was achieved with IDGS personnel in Colombia and a restructuring of the reporting hierarchy to IDGS management. The activity for Goodwill during the year ended December 31, 2015 is as follows: Goodwill Balance, beginning of year $ - Acquisition of MultiPay 166,689 Balance, end of year $ 166,689 The Companys consolidated financial statements for the year ended December 31, 2015 include Multipays results of operations from the acquisition date through December 31, 2015. Net revenues and operating loss attributable to Multipay during this period and included in the Companys consolidated financial statements for the year ended December 31, 2015 total $229,597 and $659,524, respectively. The following unaudited pro forma information gives effect to the Companys acquisition of Multipay as if the acquisition had occurred on January 1, 2014 and had been included in the Companys consolidated statements of operations for the years 2015 and 2014. 2015 2014 Pro forma net revenues $ 816,140 $ 875,804 Pro forma net loss $ (36,752,327 ) $ (1,068,460 ) |
PROMISSORY NOTES PAYABLE
PROMISSORY NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
PROMISSORY NOTES PAYABLE | NOTE 8 - PROMISSORY NOTES PAYABLE Note Payable - MultiPay In connection with the MultiPay Acquisition (Note 6), the Company assumed three promissory notes amounting to approximately $273,000. During the period from the Closing Date to December 31, 2015, the Company paid in full one of the three promissory notes amounting to approximately $85,000. At December 31, 2015, the remaining outstanding note carried an outstanding balance of $96,669. Payments of $6,300 including principal and interest are due monthly. The Interest at December 31, 2015 is 15.47% per annum. Total outstanding principal and interest is due on September 16, 2017 (the Maturity Date). Notes Payable The following is a summary of the notes payable, excluding MultiPay note payable described above, outstanding as of December 31, 2015: 12% note payable issued in August 2015 (a) $ 27,000 12% notes payable issued in September 2015 (b), (c) 973,000 12% notes payable issued in October 2015 (d) 225,000 12% note payable issued in November 2015 (e) 25,000 12% notes payable issued in December 2015 (f) 850,000 Unamortized debt discounts (1,193,947 ) Unamortized debt issuance costs (368,653 ) $ 537,400 (a) In August 2015, the Company entered into an agreement with an accredited investor, whereby the Company issued a 12% note for $27,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.10 per share; · In connection with the issuance of these notes, the Company also issued warrants for the purchase of 180,000 shares of the Companys common stock at an exercise price of $0.15 per share for a period of five years. (b) In September 2015, the Company entered into an agreement with seven accredited investors, whereby the Company issued separate 12% notes for $973,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.10 per share; · In connection with the issuance of the notes, the Company also issued warrants for the purchase of 6,486,667 shares of the Companys common stock at an exercise price of $0.15 per share for a period of five years. (c) On September 4, 2015, the Company entered into a Securities Purchase Agreement with a director of the Company, pursuant to which the director invested $100,000 into the Company in consideration of a Secured Promissory Note (the "Director Note") and a common stock purchase warrant to acquire an aggregate of 250,000 shares of common stock exercisable for a period of five years at an exercise price of $0.40. The Director Note bears interest of 10%, is payable on the earlier of the Company closing a financing in excess of $1,000,000 or on September 19, 2016. The Director Note contains standard default terms and is secured by all assets of the Company. In the event the Company defaults under the Director Note, the Company is required to issue the director an additional common stock purchase warrant to acquire 666,667 shares of common stock at $0.15 per share. (d) In October 2015, the Company entered into an agreement with four accredited investors, whereby the Company issued separate 12% notes for $225,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.10 per share; · In connection with the issuance of the notes, the Company also issued warrants for the purchase of 1,500,000 shares of the Companys common stock at an exercise price of $0.15 per share for a period of five years. (e) In November 2015, the Company entered into an agreement with an accredited investor, whereby the Company issued a 12% note for $25,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.10 per share; In connection with the issuance of these notes, the Company also issued warrants for the purchase of 166,667 shares of the Companys common stock at an exercise price of $0.15 per share for a period of five years. (f) In December 2015, the Company entered into an agreement with three accredited investors, whereby the Company issued separate 12% notes for $850,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.48 per share; however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities; · In connection with the issuance of the notes, the Company also issued warrants for the purchase of 1,770,834 shares of the Companys common stock at an exercise price of $0.48 per share for a period of five years; however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities. Maturities of notes payable at December 31, 2015 are as follows: Year Ending December 31, 2016 $ 2,155,200 2017 41,469 $ 2,196,669 Certain of the warrants qualified for equity accounting and were recorded based on their relative fair value with that of the related debt. However, certain of the warrants did not qualify for equity accounting because their exercise price is reduced if common stock or instruments which are convertible/exercisable into common stock are later issued at a price less than the exercise prices of the warrants discussed in this Note 8 (down round features). Accordingly, those warrants have been recorded as derivative liabilities (see Note 10). The assumptions used in calculating the fair value of warrants accounted for as equity has been estimated using the Black-Scholes option pricing model for warrants granted during the year ended December 31, 2015 are as follows: Expected Volatility 80% Expected Term 5.0 Years Risk Free Rate 1.37% to 1.65% Dividend Rate 0.00% The fair value of the warrants accounted for as derivative liabilities have been estimated based on the Monte Carlo Simulation Model because it considers the effect of the down round feature (probability of a triggering capital raise) along with the other assumptions associated with the Black-Scholes option pricing model. The underlying assumptions used in the valuation of the derivative liabilities are included in Note 10. A summary of the proceeds of the notes payable and a reconciliation of those proceeds to the note balances at December 31, 2015 is as follows: Balance as of January 1, 2015 $ - Proceeds from issuances of notes payable 2,200,000 Less debt discount: Equity warrants (932,884 ) Derivative liability warrants (556,892 ) Debt issuance costs (454,100 ) Amortization of debt discount: Equity warrants 282,097 Derivative liability warrants 13,732 Amortization of debt issuance costs 85,447 Payments on notes payable (100,000 ) Balance as of December 31, 2015 $ 537,400 |
CONVERTIBLE NOTES PAYABLE AND D
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITY | NOTE 9 CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITY The following is a summary of the convertible notes payable outstanding as of December 31, 2015: December 31, 2015 10% convertible notes payable issued in June 2015 (a) $ 700,000 10% convertible notes payable issued in July 2015 (b) 166,000 12% convertible notes payable issued in September 2015 (c) 172,095 Unamortized discounts on convertible notes (583,049 ) Unamortized debt issuance costs (71,700 ) $ 383,346 (a) In June 2015, the Company entered into agreements with nine individual accredited investors, whereby the Company issued separate 10% convertible notes for a total of $700,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: The principal amount of the notes shall be repaid within 12 months of the issuance date at a 10% interest rate; The note holder may convert his or her note into shares of the Companys common stock at a conversion price of $0.03 per share; however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to the price of the newly issued securities; In connection with the issuance of these notes, the Company also issued warrants for the purchase of 15,400,000 shares of the Companys common stock at an exercise price of $0.05 per share for a period of five years; however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to the price of the newly issued securities. (b) In July 2015, the Company entered into agreements with eight individual accredited investors, whereby the Company issued separate 10% convertible notes for a total of $190,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: The principal amount of the notes shall be repaid within 12 months of the issuance date at a 10% interest rate; The note holder may convert his or her note into shares of the Companys common stock at a conversion ranging from $0.03 to $0.055 per share; however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to the price of the newly issued securities; In connection with the issuance of these notes, the Company also issued warrants for the purchase of 4,180,000 shares of the Companys common stock at an exercise price of $0.05 per share for a period of five years; however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to the price of the newly issued securities. In December 2015, one of these notes with a principal balance of $24,000 was converted to shares of common stock. (c) On September 25, 2015, the Company entered into a Letter Agreement with ID Solutions Inc. (ID Solutions) pursuant to which the parties agreed to settle a loan previously made to the Company by ID Solutions in the current amount $172,095, including principal and interest, in consideration of the issuance by the Company to ID Solutions of a 12% Convertible Promissory Note in the amount of $172,095 and a common stock purchase warrant to purchase 1,146,667 shares of common stock for a period of five years at an exercise price of $0.15. The note bears interest of 12%, is payable on September 25, 2016. ID Solutions may elect to convert all or part of the principal amount of the note plus interest into shares of common stock of the Company at a conversion rate of $0.10 per share. An officer and director of the Company is also a principal shareholder, executive officer and director of ID Solutions. At December 31, 2015, the outstanding amount due under this note is $172,095. In addition, in May 2015, the Company issued two convertible notes to officers and directors of the Company for $150,000 which were subsequently converted to common stock when the notes matured in September 2015. The notes accrued interest at 10% until the date the note was converted. The notes were convertible into shares of common stock at a conversion price of $0.055 per share. The Company also issued warrants to purchase 4,090,909 shares of common stock, exercisable at $0.055 per share for a period of up to five years from the notes original issuance date. Both the notes and the related warrants contained provisions whereby the conversion/exercise price would be adjusted downward if certain conditions were met, such as the issuance of new securities at a lower price. The balance of all convertible notes payable outstanding as of December 31, 2015 mature in 2016. Certain of the warrants qualified for equity accounting and were recorded based on their relative fair value with that of the related debt. However, certain of the warrants and conversion features did not qualify for equity accounting because their exercise or conversion price is reduced if common stock or instruments which are convertible/exercisable into common stock are later issued at a price less than the exercise prices of the warrants or conversion price of debt discussed in this Note 9 (down round features). Accordingly, those warrants and conversion features have been recorded as derivative liabilities (see Note 10). The assumptions used in calculating the fair value of warrants accounted for as equity has been estimated using the Black-Scholes option pricing model for warrants granted during the year ended December 31, 2015 are as follows: Expected Volatility 80 % Expected Term 5.0 Years Risk Free Rate 1.48 % Dividend Rate 0.00 % The fair value of the warrants accounted for as derivative liabilities have been estimated based on the Monte Carlo Simulation Model because it considers the effect of the down round feature (probability of a triggering capital raise) along with the other assumptions associated with the Black-Scholes option pricing model. The underlying assumptions used in the valuation of the derivative liabilities are included in Note 10. A summary of the proceeds of the convertible notes payable and a reconciliation of those proceeds to the convertible notes balances at December 31, 2015 is as follows: Balance as of January 1, 2015 $ - Proceeds from issuances of convertible notes payable 1,040,000 Conversion of note payable, related party, to convertible note payable 172,095 Less debt discount: Equity warrants (129,820 ) Beneficial conversion feature (42,275 ) Derivative liability warrants and conversion features (947,899 ) Debt issuance costs (140,700 ) Amortization of debt discount: Equity warrants and beneficial conversion feature 45,485 Derivative liability warrants and conversion features 491,460 Amortization of debt issuance costs 69,000 Conversion of notes payable to equity (174,000 ) Balance as of December 31, 2015 $ 383,346 |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | NOTE 10 DERIVATIVE LIABILITY Due to the potential adjustment in the conversion price associated with certain of the convertible debentures and the potential adjustment in the exercise price of certain of the warrants (see Notes 8 and 9), the Company has determined that certain conversion features and warrants are derivative liabilities. Derivative liabilities at December 31, 2015 consist of the following: Common stock warrants $ 11,043,126 Debt conversion features 14,402,519 $ 25,445,645 As discussed in Notes 8 and 9, the fair value of the derivative liabilities are measured based upon the Black-Scholes and Monte Carlo Simulation Models. These models involve the use of significant inputs that are both observable and unobservable in the market and therefore is considered a Level 3 fair value measurement. Observable inputs include market quotes, current interest rates, benchmark yield curves. The Company has a relatively short history since inception, lack of comparable companies of the same size in the same industry and its history of losses. Accordingly, the significant unobservable inputs used in the fair value measurement relate to volatility, quoted prices of securities with similar characteristics and historical dividends. The ranges of assumptions utilized in estimating the fair value of the derivative liabilities related to the conversion features and warrants on the dates of issuance, settlement, and at December 31, 2015, are as follows: Expected Volatility 58% to 83% Expected Term 0.0 to 5.0 Years Risk Free Rate 0.02% to 1.8% Dividend Rate 0.00% Triggering capital raise probabilities 25% to 75% A summary of derivative activity for the year ended December 31, 2015 is as follows: Balance as of January 1, 2015 $ - Warrants in connection with promissory notes payable (see Note 8) 556,892 Warrants and conversion features in connection with convertible notes payable, including day one derivative loss of $3,832,920 (see Note 9) 4,780,819 Note conversions (2,706,167 ) Change in fair value, net of day one derivative loss of $3,832,920 22,814,101 Balance as of December 31, 2015 $ 25,445,645 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 RELATED PARTY TRANSACTIONS Revenues. Notes Payable. Convertible Notes Payable. Other. |
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDER'S EQUITY | NOTE 12 STOCKHOLDERS EQUITY On August 24, 2015, the Company amended its certificate of incorporation to increase the number of its authorized shares of common stock from 300,000,000 shares to 500,000,000 shares. The Company had 187,854,139 and 163,538,289 shares issued and outstanding as of December 31, 2015 and 2014, respectively. In addition, the Company authorized 20,000,000 shares of preferred stock. 2015 Transactions: In connection with the acquisition of MultiPay and in consideration of the purchased assets, the Company issued 6,101,517 shares of common stock in May 2015 valued at $860,491 (Note 7). In addition, the Company has reserved an additional 1,498,483 shares of common stock to be issued upon the MultiPay Shareholders payment of certain contingent liabilities amounting to $370,125. In separate transactions occurring from September through December 2015, holders of convertible notes payable converted an aggregate $174,000 principal into 6,040,166 shares of the Companys common stock. During 2015, the Company issued 12,174,167 shares of common stock for consulting, legal, and other services valued at an aggregate of $856,150. 2014 Transactions: In separate transactions occurring in 2014, holders of notes payable converted an aggregate $1,165,675 of principal and accrued interest into 2,915,000 shares of the Companys common stock. Warrants: A summary of the warrant activity during the year ended December 31, 2015 is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding, December 31, 2014 - $ - - Granted pursuant to Promissory Notes Payable (Note 8) 10,354,168 $ 0.21 4.8 Granted pursuant to Convertible Notes Payable (Note 9) 24,817,576 $ 0.06 4.5 Outstanding, December 31, 2015 35,171,744 $ 0.10 4.6 Exercisable, December 31, 2015 35,171,744 $ 0.10 4.6 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13 INCOME TAXES Year ended December 31, 2015 2014 United States $ (35,853,893 ) $ (904,687 ) Outside United States (825,276 ) - Income (loss) before provision for income taxes, net $ (36,679,169 ) $ (904,687 ) For 2015 there is no provision for income tax as the Company had a tax loss for United States and Foreign activities. The Components of deferred tax assets and liabilities are as follows: Year ended December 31, 2015 2014 Deferred tax assets: Net operating loss carry-forward $ 1,086,609 $ 811,455 Depreciation and amortization - 3,018 Stock options 2,378,259 - Total deferred tax assets 3,464,868 814,473 Less: Valuation allowance (2,621,446 ) (814,473 ) Net deferred tax assets 843,422 - Deferred tax liabilities: Depreciation and amortization (9,034 ) - Debt issuance costs (165,704 ) - Note discount (668,684 ) - Total deferred tax liabilities (843,422 ) - Total deferred tax asset/liabilities, net $ - $ - As of December 31, 2015, the Company has available federal net operating loss carry forward of $2.9 million, state net operating loss carry of $2.9 million and various foreign net operating loss carry forwards, the most significant of which expire from 2020 through 2035. The Company assess the recoverability of its net operating loss carry forwards and other deferred tax assets and records a valuation allowance to the extent recoverability does not satisfy the more likely than not recognition criteria. The Company continues to maintain the valuation allowance until sufficient positive evidence exists to support full or partial reversal. As of December 31, 2015 the Company had a valuation allowance totaling $2.6 million against its deferred tax assets, net of deferred tax liabilities, due to insufficient positive evidence, primarily consisting of losses within the taxing jurisdictions that have tax attributes and deferred tax assets. The table below shows reconciliation from the U.S. Federal statutory income rate of 34.0% to the effective income tax rate: Year ended December 31, 2015 2014 Federal statutory rate 34.00 % 34.00 % State tax rate 3.63 % 1.00 % Permanent difference -30.32 % 0.00 % Change in valuation allowance -7.31 % -35.00 % Total tax (benefit) provision 0.00 % 0.00 % |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 COMMITMENTS AND CONTINGENCIES Operating Leases On December 19, 2014 at the closing of the sale of the Companys office building (Note 4), the Company entered into a 12 month lease for office facilities at a monthly rate of $3,000, with an option to extend the lease term an additional 12 months for $3,300 per month. The monthly payments include all taxes and building maintenance charges. The Company extended its lease in 2015 and must notify the landlord of its intention to extend the lease for an additional 12 months by no later than October 31, 2016. In addition, the Company has three operating leases for its office locations in Colombia. The leases are for terms of 12 months expiring on dates ranging from March 31, 2016 to October 31, 2016. The monthly payments for the three leases are approximately $5,700. Rent expense for the years ended December 31, 2015 and 2014 was approximately $73,000 and $15,000, respectively, and is included in general and administrative expenses on the consolidated statements of operations. The approximate minimum lease payments due under noncancelable operating leases through December 31, 2016 is approximately $74,000. The Company has no leases in effect that are for a term greater than one year. Executive Compensation In February 2014 the Company executed a new Employment Agreement with David Jones, President and CEO of the Company, at an annual salary of $60,000 per year and to include all benefits as offered to any other employee at the time. Effective August 25, 2014, David Jones resigned as the President and CEO. In February 2014 the Company hired Thomas Szoke and Douglas Solomon to join the company as acting Chief Technology Officer and Chief Operating Officer respectively, at an annual rate of $60,000 per year to include all benefits as offered to any other employee at the time. Votes will be taken at the next full Board of Directors meeting for the appointment of each to the post permanently. On July 1, 2014, the Company officers agreed to adjust their total compensation to $1 per year and will not receive any other benefits or other forms of compensation. Effective December 19, 2014, the Company entered into a three year employment agreement with Thomas Szoke to be the Companys President and CEO. The agreement provides for an annual base salary of $275,000, along with a signing bonus equivalent to 3 months base salary. The agreement also provides for future bonuses, stock options and other benefits to be granted at the discretion of the Board of Directors. Effective December 19, 2014, the Company entered into a three year employment agreement with Douglas Solomon to be the Companys Chairman and COO. The agreement provides for an annual base salary of $250,000, along with a signing bonus equivalent to 3 months base salary. The agreement also provides for future bonuses, stock options and other benefits to be granted at the discretion of the Board of Directors. Legal Matters From time to time, claims are made against the Company in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting the Company from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Companys results of operations for that period or future periods. The Company is not presently a party to any pending or threatened legal proceedings. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 SUBSEQUENT EVENTS On February 9, 2016, the Company entered into a Share Exchange Agreement with Fin Holdings, Inc., a Florida corporation ("FIN"), a related party via common management and partial common ownership, and all of the FIN shareholders (the "FIN Shareholders"), pursuant to which the Company agreed to acquire 100% of the issued and outstanding shares of FIN (the "FIN Shares") and FIN's two wholly-owned subsidiaries, ID Solutions, Inc. and Cards Plus Pty Ltd. (collectively, the "Subsidiaries"), from the FIN Shareholders. In consideration for the FIN Shares, the Company will issue and sell to the FIN Shareholders an aggregate of 22,500,000 shares of common stock of the Company (the "Purchase Shares") at a per share price of $0.40 or $9,000,000 in shares of common stock of the Company. The closing occurred on February 8, 2016. On April 19, 2016, the Company entered into and closed Securities Purchase Agreements with several accredited investors (the "April 2016 Accredited Investors") pursuant to which the April 2016 Accredited Investors invested an aggregate of $1,550,000 into the Company in consideration of Secured Convertible Debentures and common stock purchase warrants to acquire an aggregate of 6,200,000 shares of common stock exercisable for a period of five years at an exercise price of $0.25 subject to antidilution protection. However, the exercise price shall be adjusted to equal the conversion price or the per share purchase price of Company's next offering in the minimum amount of $5,000,000 if such price is less than $0.25 (the "Adjustment Price") and the number of shares of common stock issuable upon exercise of the warrants shall be adjusted to equal the consideration paid by the April 2016 Accredited Investors by the Adjustment Price. The Secured Convertible Debentures bear interest of 12% and are payable on the six (6) month anniversary of the Secured Convertible Debentures. The Secured Convertible Debentures are convertible into shares of common stock at $0.25 per share subject to ant dilution protection. The conversion price shall be adjusted to equal the Adjustment Price less a 20% discount if such Adjustment Price is less than $0.25 per share. The Secured Convertible Debentures are secured by 18,235,295 issued and outstanding shares of common stock of the Company held by certain shareholders of the Company (the "Pledgors") pursuant to stock pledge agreements entered into between the April 2016 Accredited Investors and the Pledgors. Each of the April 2016 Accredited Investors have individually agreed to restrict their ability to convert the Secured Convertible Debentures or exercise their Common Stock Purchase Warrants and receive shares of common stock such that the number of shares of common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The following are overviews of the FIN subsidiaries: ID Solutions, Inc. ID Solutions, Inc.’s focus is on the Biometric Integrity Solutions market and is a tier one AFIS (Automates Fingerprints Identification System) provider with 15 years of proven technology, experience and market presence. ID Solutions maintains proprietary fingerprint matching algorithms and ranks among the top five companies in NIST and MINEX (a US Government Test Standards Program) in competitive testing for accuracy and speed of fingerprint matching algorithms. The company's technology platform has been developed for maximum scalability and reliability and its products offer a full portfolio of software elements and solutions for enrollment, verification, 1:1, 1: few and 1: N backend matching. The company has also developed a robust middleware solution capable of providing complete civil AFIS functionality for Electoral, National Registry and other government fingerprint solutions. The company's middleware solution also offers the flexibility to implement these AFIS solutions utilizing transaction-billing methodology. This system can provide full audit reports and subsequent billing on transactions run through its system. Cards Plus Pty Ltd. Cards Plus Pty Ltd. is a complete card production and personalization facility for plastic loyalty, ID and other types of cards. The company utilizes the latest digital printing technology from Hewlett Packard and has a capacity to produce approximately 180,000 cards per day. The company also uses and resells desktop personalization machines and consumables from Matica, NBS Technologies and Data-card and is continually looking to expand and broaden its product offering. The Subsidiaries generate an aggregate average annual revenue of approximately $2,000,000. On April 19, 2016, the Company entered into and closed on several Securities Purchase Agreements with accredited investors (the "April 2016 Accredited Investors") pursuant to which the Company borrowed an aggregate of $1,550,000 in consideration of Secured Convertible Debentures and common stock purchase warrants to acquire an aggregate of 6,200,000 shares of common stock exercisable for a period of five years at an exercise price of $0.25 subject to antidilution protection. However, the exercise price shall be adjusted to equal the conversion price or the per share purchase price of Company's next offering in the minimum amount of $5,000,000 if such price is less than $0.25 (the "Adjustment Price") and the number of shares of common stock issuable upon exercise of the warrants shall be adjusted to equal the consideration paid by the April 2016 Accredited Investors by the Adjustment Price. The Secured Convertible Debentures bear interest of 12% and are payable on the six (6) month anniversary of the Secured Convertible Debentures. The Secured Convertible Debentures are convertible into shares of common stock at $0.25 per share subject to antidilution protection. The conversion price shall be adjusted to equal the Adjustment Price less a 20% discount if such Adjustment Price is less than $0.25 per share. The Secured Convertible Debentures are secured by 18,235,295 issued and outstanding shares of common stock of the Company held by certain shareholders of the Company (the "Pledgors") pursuant to stock pledge agreements entered into between the April 2016 Accredited Investors and the Pledgors. Each of the April 2016 Accredited Investors have individually agreed to restrict their ability to convert the Secured Convertible Debentures or exercise their Common Stock Purchase Warrants and receive shares of common stock such that the number of shares of common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. In connection with this private offering, the Company paid Network 1 Financial Securities, Inc., a registered broker-dealer, a cash fee of $124,000 and issued 496,000 shares of common stock of the Company (See Note 11). On August 10, 2016, the Company and the April 2016 Accredited Investors entered into a Letter Agreement whereby the conversion price of the Secured Convertible Debentures was reduced to $0.10 in consideration of the removal of certain price protection features in such Secured Convertible Debentures. Further, the exercise price of such Common Stock Purchase Warrant was reduced to $0.10 per share and the number of shares upon exercise of the Common Stock Purchase Warrant was increased to 15,500,000. The Company is negotiating with the remaining April 2016 Accredited Investors to either extend the repayment terms of the Secured Convertible Debentures or convert the amounts to common stock. On August 10, 2016 through August 26, 2016, the Company entered into and closed Subscription Agreements with several accredited investors (the "August 2016 Accredited Investors") pursuant to which the August 2016 Accredited Investors purchased an aggregate of 25,000,000 shares of the Company’s common stock (the “2016 Subscription Shares”) for an aggregate purchase price of $1,250,000. In order to reduce the dilution as a result of this private offering, certain shareholders of the Company including the Chief Executive Officer, directors and others agreed to return to the Company 10,000,000 shares of common stock in the aggregate for cancellation. In connection with this private offering, the Company paid Network 1 Financial Securities, Inc., a registered broker-dealer, a cash fee of $100,000 and issued 2,000,000 shares of common stock of the Company (See Note 11). On August 10, 2016, the Company issued to several of its employees and consultants stock options (the "Plan Options") under its Equity Compensation Plan to acquire an aggregate of 17,000,000 shares of common stock of the Company exercisable at $0.05 per share. The Plan Options contain vesting periods of 12 quarters commencing on October 1, 2016 as well as various vesting milestones. The Plan Options are exercisable for a period of ten years. Further, the Company amended existing stock options to acquire 50,800,000 shares of common stock under its Equity Compensation Plan to extend the term from five years to 10 years. On August 10, 2016, the Company entered into an amended agreement (the "Amendment") with Parity Labs, LLC (“Parity”) to amend the compensation section of an existing Advisory Agreement previously entered into between the Company and Parity on November 16, 2015 for the provision of strategic advisory services. The Amendment calls for the Company to issue to Parity the option (the "Parity Option") to acquire 20,000,000 shares of common stock of the Company, exercisable at $0.05 per share for a period of ten years. The Parity Option vests as to 10,000,000 shares of common stock immediately and then in 12 equal tranches of 833,333 shares per month commencing on September 1, 2016. |
2015 QUARTERLY RESTATEMENTS (UN
2015 QUARTERLY RESTATEMENTS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
2015 QUARTERLY RESTATEMENTS (UNAUDITED) | NOTE 16 – 2015 QUARTERLY RESTATEMENTS (UNAUDITED) March 31, 2015 Restatement During the preparation of its consolidated financial statements for the year ended December 31, 2015, the Company determined that previously capitalized software should have been expensed during the three months ended March 31, 2015 in accordance with US GAAP. Accordingly, a reduction of $200,000 to Intangible Assets and an increase to Research and Development Expenses has been made as of March 31, 2015 and for the three months then ended, as follows: Condensed Consolidated Balance Sheet: As of March 31, 2015 (unaudited) As Previously Reported Adjustment Restated Cash $ 13,528 $ - $ 13,528 Total current assets 13,528 - 13,528 Property and Equipment, Net 18,566 - 18,566 Other Assets 203,390 - 203,390 Intangible Assets 418,052 (200,000 ) 218,052 Total assets $ 653,536 $ (200,000 ) $ 453,536 Accounts Payable and Accrued Expenses $ 137,833 $ - $ 137,833 Accounts Payable - related party 90,650 - 90,650 Note Payable - related parties 243,887 - 243,887 Total current liabilities 472,370 - 472,370 Stockholders' equity (deficit) 181,166 (200,000 ) (18,834 ) Total liabilities and stockholders'' equity (deficit) $ 653,536 $ (200,000 ) $ 453,536 Condensed Consolidated Statement of Operations: Three Months Ended March 31, 2015 (unaudited) As Previously Reported Adjustment Restated Operating Expenses: Depreciation and amortization $ 11,271 $ - $ 11,271 Research and development 24,000 200,000 224,000 General and administrative 472,836 - 472,836 Total operating expenses 508,107 200,000 708,107 Loss from operations (508,107 ) (200,000 ) (708,107 ) Interest expense (1,755 ) - (1,755 ) Net loss $ (509,862 ) $ (200,000 ) $ (709,862 ) Net loss per share: Basic and Diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) Second Quarter 2015 Restatement During the preparation of its consolidated financial statements for the year ended December 31, 2015, the Company determined it had previously used incorrect valuations for the fair value of intangible assets acquired, derivative liabilities and stock options issued for compensation. In addition, the Company previously incorrectly recorded certain costs related to the issuance of its convertible and other notes payable as general and administrative expenses, and as discussed above related to the quarter ended March 31, 2015, the Company determined that previously capitalized internal use software should be expensed in accordance with US GAAP. The Company has adjusted those intangible assets, derivative liabilities and compensation related to stock options using correct valuations. In addition and in accordance with US GAAP, the Company has now capitalized the costs related to the issuance of its convertible and other notes payable as debt issuance costs as a reduction of the debt principal and expensed the previously capitalized internal use software costs. The following summarizes the adjustments made to the Company’s previously reported amounts as of June 30, 2015 and for the three and six months then ended. Condensed Consolidated Balance Sheet: As of June 30, 2015 (unaudited) As Previously Adjustments As Restated Cash $ 525,541 $ — $ 525,541 Contingent Asset 149,848 (1) (149,848 ) — Other current assets 237,311 — 237,311 Total current assets 912,700 (149,848 ) 762,852 Property and Equipment, Net 31,885 — 31,885 Other Assets 240,636 — 240,636 Goodwill — (1) 166,689 166,689 Intangible Assets 1,425,728 (1), (2) 986 1,426,714 Total assets $ 2,610,949 $ 17,827 $ 2,628,776 Accounts Payable and Accrued Expenses $ 625,600 $ — $ 625,600 Convertible Notes Payable - Net 67,918 (13,584 ) 54,334 Derivative Liability 4,530,375 (3) (907,123 ) 3,623,252 Related Party Payables 83,838 — 83,838 Contingent Liability 149,848 (1) (149,848 ) — Contingent Purchase Consideration — (1) 370,125 370,125 Note Payable - Related Party 234,190 — 234,190 Promissory Note Payable 199,718 — 199,718 Total current liabilities 5,891,487 (700,430 ) 5,191,057 Stockholders' equity (deficit) (3,280,538 ) 718,257 (2,562,281 ) Total liabilities and stockholders'' equity (deficit) $ 2,610,949 $ 17,827 $ 2,628,776 Condensed Consolidated Statements of Operations: Three Months Ended June 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Restated Revenue $ 11,046 $ - $ 11,046 $ - $ 11,046 Operating Expenses: Depreciation and amortization 11,469 - 11,469 (1) 32,549 44,018 Research and development 853 - 853 - 853 General and administrative 570,622 (67,918 ) 502,704 (4), (5) (46,344 ) 456,360 Total operating expenses 582,944 (67,918 ) 515,026 (13,795 ) 501,231 Loss from operations (571,898 ) 67,918 (503,980 ) 13,795 (490,185 ) Derivative expense (3,680,374 ) - (3,680,374 )(3) 815,021 (2,865,353 ) Interest expense (11,741 ) (67,918 ) (79,659 )(3) 45,685 (33,974 ) Translation loss (26,259 ) - (26,259 ) - (26,259 ) Net loss $ (4,290,272 ) $ - $ (4,290,272 ) $ 874,501 $ (3,415,771 ) Net loss per share: Basic and Diluted $ (0.03 ) $ - $ (0.03 ) $ 0.01 $ (0.02 ) Six Months Ended June 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Restated Revenue $ 11,046 $ - $ 11,046 $ - $ 11,046 Operating Expenses: Depreciation and amortization 22,740 - 22,740 (1) 32,549 55,289 Research and development 24,853 - 24,853 (2) 200,000 224,853 General and administrative 1,043,459 (6) (67,918 ) 975,541 (4), (5) (46,344 ) 929,197 Total operating expenses 1,091,052 (67,918 ) 1,023,134 186,205 1,209,339 Loss from operations (1,080,006 ) 67,918 (1,012,088 ) (186,205 ) (1,198,293 ) Derivative expense (3,680,374 ) - (3,680,374 )(3) 815,021 (2,865,353 ) Interest expense (13,496 ) (6) (67,918 ) (81,414 )(3) 45,685 (35,729 ) Translation loss (26,259 ) - (26,259 ) - (26,259 ) Net loss $ (4,800,135 ) $ - $ (4,800,135 ) $ 674,501 $ (4,125,634 ) Net loss per share: Basic and Diluted $ (0.03 ) $ - $ (0.03 ) $ 0.01 $ (0.02 ) (1) Fair Value of Intangible Assets In Connection with Business Acquisition. (2) Intangible Assets—Capitalized Software. (3) Derivative Liability. (4) Stock-Based Compensation. (5) Debt Issuance Costs. (6) Reclassifications. Third Quarter 2015 Restatement During the preparation of its consolidated financial statements for the year ended December 31, 2015, the Company determined it had previously used incorrect valuations for the fair value of intangible assets acquired, derivative liabilities, and stock options issued for compensation. In addition, the Company previously incorrectly recorded certain costs related to the issuance of its convertible and other notes payable as general and administrative expenses, and as discussed above, related to the quarter ended March 31, 2015, the Company determined that previously capitalized software should be expensed in accordance with US GAAP. The Company has adjusted those intangible assets, derivative liabilities, and compensation related to stock options using correct valuations. In addition and in accordance with US GAAP, the Company has now capitalized the costs related to the issuance of its convertible and other notes payable as debt issuance costs and expensed the previously capitalized software costs. The following summarizes the adjustments made to the Company’s previously reported amounts as of September 30, 2015 and for the three and nine months then ended. Condensed Consolidated Balance Sheet: As of September 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Restated Cash $ 576,897 $ - $ 576,897 $ - $ 576,897 Contingent asset 87,941 - 87,941 (1) (87,941 ) - Other current assets 546,503 - 546,503 - 546,503 Total current assets 1,211,341 - 1,211,341 (87,941 ) 1,123,400 Property and Equipment, Net 90,070 - 90,070 - 90,070 Other assets 146,160 - 146,160 - 146,160 Inventory 174,838 - 174,838 - 174,838 Goodwill 28,353 - 28,353 (1) 138,336 166,689 Intangible assets, net 1,694,687 - 1,694,687 (1), (2) (31,562 ) 1,663,125 Total assets $ 3,345,449 $ - $ 3,345,449 $ 18,833 $ 3,364,282 Accounts payable and accrued expenses $ 835,119 $ - $ 835,119 $ - $ 835,119 Related party payables 127,320 - 127,320 - 127,320 Contingent liability 87,941 - 87,941 (1) (87,941 ) - Contingent purchase consideration - - - (1) 370,125 370,125 Convertible notes payable, net 262,158 (6) (37,328 ) 224,830 (3) (121,655 ) 103,175 Notes payable, net - 189,230 189,230 (3) 159,357 348,587 Related party convertible notes payable 150,000 - 150,000 (3) (150,000 ) - Promissory note payable 151,902 (151,902 ) - - - Derivative liabilities 26,514,647 - 26,514,647 (3) 1,545,232 28,059,879 Total current liabilities 28,129,087 - 28,129,087 1,715,118 29,844,205 Stockholders' equity (deficit) (24,783,638 ) - (24,783,638 ) (1,696,285 ) (26,479,923 ) Total liabilities and stockholders' equity (deficit) $ 3,345,449 $ - $ 3,345,449 $ 18,833 $ 3,364,282 Condensed Consolidated Statements of Operations: Three Months Ended September 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Restated Revenue $ 75,312 $ - $ 75,312 $ - $ 75,312 Operating Expenses: Depreciation and amortization 10,135 - 10,135 (1) 32,549 42,684 Research and development - - - - - General and administrative 840,199 4,849,740 5,689,939 (4), (5) (1,957,052 ) 3,732,887 Total operating expenses 850,334 4,849,740 5,700,074 (1,924,503 ) 3,775,571 Loss from operations (775,022 ) (4,849,740 ) (5,624,762 ) 1,924,503 (3,700,259 ) Derivative expense (20,478,790 ) - (20,478,790 )(3) (3,767,837 ) (24,246,627 ) Stock compensation expense (4,849,740 ) 4,849,740 - - - Financing Costs of debentures (1,357,917 ) - (1,357,917 ) 1,357,917 - Amortizaton of debt discounts (358,705 ) 358,705 - - - Interest expense (98,166 ) (358,705 ) (456,871 )(3) (11,919 ) (468,790 ) Other income 9,315 - 9,315 - 9,315 Net loss $ (27,909,025 ) $ - $ (27,909,025 ) $ (497,336 ) $ (28,406,361 ) Net loss per share: Basic and Diluted $ (0.16 ) $ - $ (0.16 ) $ (0.00 ) $ (0.17 ) Nine Months Ended September 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Reclassified Revenue $ 86,358 $ - $ 86,358 $ - $ 86,358 Operating Expenses: Depreciation and amortization 34,312 - 34,312 (1) 65,098 99,410 Research and development 24,853 - 24,853 (2) 200,000 224,853 General and administrative 1,817,906 4,849,740 6,667,646 (4), (5) (2,003,395 ) 4,664,251 Total operating expenses 1,877,071 4,849,740 6,726,811 (1,738,297 ) 4,988,514 Loss from operations (1,790,713 ) (4,849,740 ) (6,640,453 ) 1,738,297 (4,902,156 ) Derivative expense (20,979,041 ) - (20,979,041 )(3) (6,132,939 ) (27,111,980 ) Stock compensation expense (4,849,740 ) 4,849,740 - - - Financing Costs (4,538,040 ) - (4,538,040 ) 4,538,040 - Amortizaton of debt discounts (421,524 ) 421,524 - - - Interest expense (112,304 ) (421,524 ) (533,828 )(3) 28,667 (505,161 ) Other income 9,315 - 9,315 - 9,315 Net loss $ (32,682,047 ) $ - $ (32,682,047 ) $ 172,065 $ (32,509,982 ) Net loss per share: Basic and Diluted $ (0.19 ) $ - $ (0.19 ) $ 0.00 $ (0.19 ) (1) Fair Value of Intangible Assets In Connection with Business Acquisition. (2) Intangible Assets—Capitalized Software. (3) Derivative Liability. (4) Stock-Based Compensation. (5) Debt Issuance Costs. (6) Reclassifications. |
DESCRIPTION OF BUSINESS AND S24
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Going Concern | Going Concern The Company has an accumulated deficit of $39,074,590 as of December 31, 2015. The Companys continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or obtain additional financing from its stockholders and/or other third parties. These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from the Companys current shareholders, the ability of the Company to obtain additional equity financing to continue operations, the Companys ability to generate sufficient cash flows from operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues and cash flows, none of which can be assured. There is no assurance that the Company will ever be profitable. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of ID Global Solutions and its wholly-owned subsidiaries MultiPay S.A.S,. ID Global LATAM and IDGS S.A.S.. All significant intercompany balances and transactions have been eliminated in consolidation. The summary of significant accounting policies presented below is designed to assist in understanding the Companys consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Companys management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (US GAAP) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. |
Use of Estimates | Use of Estimates In preparing these consolidated financial statements in conformity with US GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to equity instruments and share based payments. |
Revenue Recognition | Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue generally is recognized net of allowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service that are provided on a consumption basis (for example, the number of transactions processed over a period of time) is recognized commensurate with the customer utilization of such resources. Generally, the contract calls for a minimum number of transactions to be charged by the Company on a monthly basis. Accordingly, the Company records as revenue the minimum transactional fee based on the passage of a months time. Amounts in excess of the monthly minimum, are charged to customers based on the actual number of transactions. Consulting services revenue is recognized as services are rendered, generally based on the negotiated hourly rate in the consulting arrangement and the number of hours worked during the period. Consulting revenue for fixed-price services arrangements is recognized as services are provided. |
Taxes Collected from Customers and Remitted to Governmental Authorities | Taxes Collected from Customers and Remitted to Governmental Authorities Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a gross basis in our consolidated statements of operations. |
Accounts Receivable | Accounts Receivable All customers are granted credit on a short-term basis and related credit risks are considered minimal. The Company routinely reviews its trade receivables and makes provisions for probable doubtful accounts; however, those provisions are estimates and actual results could differ from those estimates and those differences may be material. Trade receivables are deemed uncollectible and removed from accounts receivable and the allowance for doubtful accounts when collection efforts have been exhausted. At December 31, 2015 no allowance for doubtful accounts was necessary. At December 31, 2014 there were no accounts receivable. |
Inventories | Inventories Inventories are stated at the lower of cost (using the first-in, first-out method) or market. Inventories consist primarily of kiosks that provide electronic ticketing for transit systems. |
Concentration of Credit Risk | Concentration of Credit Risk The Companys financial instruments that potentially expose the Company to a concentration of credit risk consist of cash and accounts receivable. The Companys cash is deposited at financial institutions and cash balances held in US bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At various times during the year, the Company may have exceeded amounts insured by the FDIC. At December 31, 2015, the Company held approximately $61,000 in cash not insured by the FDIC. For the Companys Colombian subsidiaries, no amounts are insured. At December 31, 2015, the Company held approximately $42,000 in cash maintained in Colombian banks. Revenues and accounts receivable: For the year ending December 31, 2015, 68% of consolidated revenues were derived by one US customer, which is also a related party and at December 31, 2015, 98% of consolidated accounts receivable are due to the Company by the same related party US customer. For the year ending December 31, 2015, 32% of revenues were derived by the Companys Multipay subsidiary in Colombia. For the year ending December 31, 2015, 61% of Multipays revenues were derived by three customers. There were no accounts receivable and revenues as of and for the year ending December 31, 2014. |
Income Taxes | Income Taxes The Company accounts for income taxes under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740 Income Taxes. |
Property and Equipment, net | Property and Equipment, net Property and equipment consist of furniture and fixtures and computer equipment, and are stated at cost. Property and equipment are depreciated using the straight-line method over the estimated service lives of three to five years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal. Depreciation expense amounted to $20,072 and $24,393 for the years ended December 31, 2015 and 2014, respectively. |
Software Development Costs | Software Development Costs Research and development (R&D) costs are expensed as incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a products technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Companys products are released soon after technological feasibility has been established and as a result software development costs were expensed as incurred. |
Other Assets | Other Assets Other assets consist primarily of costs associated with the hardware construction of HDR mobile biometric devises. As of December 31, 2015, the devices are still under construction and have not been placed in service. Upon completion, the amounts will be recorded as property and equipment and depreciated over their estimated useful lives. |
Intangible Assets | Intangible Assets Excluding goodwill, acquired intangible assets and internally developed software are amortized over their useful lives unless the lives are determined to be indefinite. Acquired amortizing intangible assets are carried at cost, less accumulated amortization. Internally developed software costs are capitalized upon reaching technological feasibility. Amortization of acquired finite-lived intangible assets is computed over the useful lives of the respective assets. The Company amortizes intangible assets over a ten year period. Amortization of internally developed software is amortized over a three-year period. Amortization expense amounted to $126,980 and $24,448 for the years ended December 31, 2015 and 2014, respectively. |
Stock-based compensation | Stock-based compensation The Company has accounted for stock-based compensation under the provisions of FASB ASC 718 Stock Compensation which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the simplified method which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted estimated future cash flows, an impairment review is performed. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Generally, fair value is determined using valuation techniques such as expected discounted cash flows or appraisals, as appropriate. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated or amortized. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. There were no impairment charges incurred during the years ended December 31, 2015 or 2014. |
Research and Development Costs | Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to vendors contracted to perform research projects and develop technology for the Company's products. Research and development costs are expensed as incurred. |
Net Loss per Common Share | Net Loss per Common Share The Company computes net loss per share in accordance with FASB ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible notes and stock warrants, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options, warrants and conversion of convertible notes. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. |
Derivative Instruments | Derivative Instruments The Company accounts for derivatives through the use of a fair value concept whereby all of the Companys derivative positions are stated at fair value in the accompanying consolidated balance sheets. Due to the potential adjustment in the conversion price associated with certain of the convertible debentures and the potential adjustment in the exercise price of certain of the warrants, the Company has determined that certain of the conversion features and warrants are considered derivative liabilities. |
Common Stock Purchase Warrants | Common Stock Purchase Warrants The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, Derivatives and Hedging Contracts in Entitys Own Equity (ASC 815-40). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). All outstanding warrants as of December 31, 2015 which did not contain down round anti-dilution provisions (see Note 9) were classified as equity. |
Goodwill | Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of net identified tangible and intangible assets acquired. The Company performs an annual impairment test of goodwill and further periodic tests to the extent indicators of impairment develop between annual impairment tests. The Companys impairment review process compares the fair value of the reporting unit to its carrying value, including the goodwill related to the reporting unit. To determine the fair value of the reporting unit, the Company may use various approaches including an asset or cost approach, market approach or income approach or any combination thereof. These approaches may require the Company to make certain estimates and assumptions including future cash flows, revenue and expenses. These estimates and assumptions are reviewed each time the Company tests goodwill for impairment and are typically developed as part of the Companys routine business planning and forecasting process. While the Company believes its estimates and assumptions are reasonable, variations from those estimates could produce materially different results. The Company did not recognize any goodwill impairments in the year ended December 31, 2015. There was no goodwill in 2014. |
Business Combinations | Business Combinations The Company recognizes, with certain exceptions, 100% of the fair value of assets acquired, liabilities assumed, and noncontrolling interests when the acquisition constitutes a change in control of the acquired entity. Shares issued in consideration for a business combination, contingent consideration arrangements and pre-acquisition loss and gain contingencies are all measured and recorded at their acquisition-date fair value. Subsequent changes to fair value of contingent consideration arrangements are generally reflected in earnings. Any in-process research and development assets acquired are capitalized as of the acquisition date. Acquisition-related transaction costs are expensed as incurred and any changes in an acquirers existing income tax valuation allowances and tax uncertainty accruals are recorded as an adjustment to income tax expense. The operating results of entities acquired are included in the accompanying consolidated statements of operations from the date of acquisition (see Note 7). |
Foreign Currency Translation | Foreign Currency Translation The assets, liabilities and results of operations of certain of ID Global's subsidiaries are measured using their functional currency which is the currency of the primary foreign economic environment in which they operate. Upon consolidating these subsidiaries with ID Global, their assets and liabilities are translated to U.S. dollars at currency exchange rates as of the balance sheet dates and their revenues and expenses are translated at the weighted average currency exchange rates during the applicable reporting periods. Translation adjustments resulting from the process of translating these subsidiaries financial statements are reported in other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income (loss). |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurements, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company has derivative liabilities required to be recorded at fair value on a recurring basis at December 31, 2015 or 2014. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company is required to disclose fair value information about financial instruments when it is practicable to estimate that value. The carrying amounts of the Companys cash, accounts receivable, other receivables, accounts payable, accrued expenses, and other current liabilities approximate their estimated fair value due to the short-term maturities of these financial instruments and because related interest rates offered to the Company approximate current rates. The fair value of the Companys convertible notes payable and promissory notes payable are $1,038,095 and $2,100,000, respectively, which differs from the $383,346 and $537,400, respectively, carrying value of the debt instruments at December 31, 2015 because of the significant debt discounts recorded as discussed in Notes 8 and 9. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under US GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing US GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Management of the Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and have not yet determined the method by which it will adopt the standard in 2017. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial StatementsGoing Concern, Disclosure of Uncertainties about an entitys Ability to Continue as a Going Concern. This ASU amends ASC205-40. ASC 205-40 provided guidance about managements responsibility to evaluate whether there is substantial doubt about an entitys ability to continue as a going concern and to provide related note disclosures. With the amendments made by ASU 2014-15, financial statement disclosures will be required when there is substantial doubt about an entitys ability to continue as a going concern or when substantial doubt is alleviated as a result of considerations of managements plans. The new standard provides management with principles for evaluating whether there is substantial doubt by: providing a definition of substantial doubt, requiring an evaluation every reporting period (including interim periods), providing principles for considering the mitigating effect of managements plans, requiring certain disclosures when substantial doubt is alleviated as a result of consideration of managements plans, requiring an express statement and other disclosures when substantial doubt is not alleviated, and requiring an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (ASU 2015-11), modifying the accounting for inventory. Under ASU 2015-11, the measurement principle for inventory will change from lower of cost or market value to lower of cost and net realizable value. ASU 2015-11 defines net realizable value as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is applicable to inventory that is accounted for under the first-in, first-out method and is effective for reporting periods after December 15, 2016, with early adoption permitted. The Company has not yet determined the impact of adoption on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740)" ("ASU 2015-17"). Currently US GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. The amendments under ASU 2015-17 will require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update will be effective for fiscal years beginning after December 15, 2017 and interim periods thereafter. The adoption of ASU 2015-17 is not expected to have a material impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02") that will supersede current guidance related to accounting for leases. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard will be effective for fiscal years beginning after December 15, 2018 and interim periods thereafter, with early adoption permitted. The standard is required to be adopted using the modified retrospective approach. The Company is currently evaluating the potential impact this guidance will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 includes provisions to simplify certain aspects related to the accounting for share-based awards and the related financial statement presentation. This ASU includes a requirement that the tax effect related to the settlement of share-based awards be recorded in income tax benefit or expense in the statements of earnings. This change is required to be adopted prospectively in the period of adoption. In addition, the ASU modifies the classification of certain share-based payment activities within the statements of cash flows and these changes are required to be applied retrospectively to all periods presented, or in certain cases prospectively, beginning in the period of adoption. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements. |
STOCK OPTION GRANTS (Tables)
STOCK OPTION GRANTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | The following is a summary of stock option activity: Weighted Weighted Average Average Remaining Aggregate Options Exercise Contractual Intrinsic Outstanding Price Life Value Outstanding, December 31, 2014 - Granted 47,800,000 $ 0.32 Outstanding, December 31, 2015 47,800,000 $ 0.32 4.74 $ 7,698,650 Exercisable, December 31, 2015 19,962,500 $ 0.36 4.74 $ 2,353,163 |
Schedule of exercise price for options outstanding and exercisable | The exercise price for options outstanding and exercisable at December 31, 2015 is as follows: Outstanding Exercisable Number of Exercise Number of Exercise Options Price Options Price 3,500,000 $ 0.0001 875,000 $ 0.0001 8,000,000 $ 0.10 2,687,500 $ 0.10 6,300,000 $ 0.15 1,400,000 $ 0.15 30,000,000 $ 0.45 15,000,000 $ 0.45 47,800,000 19,962,500 |
Schedule of assumptions used in calculating the fair value of options granted using the Black-Scholes option- pricing model | The assumptions used in calculating the fair value of options granted using the Black-Scholes option- pricing model for options granted are as follows: Stock price $0.02 to $0.55 Risk-free interest rate 1.4% to 1.5% Expected life of the options 2.5 to 4.21 years Expected volatility 85% to 93% Expected dividend yield 0% |
INTANGIBLE ASSETS, NET AND GO26
INTANGIBLE ASSETS, NET AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consist of the following: December 31, December 31, 2015 2014 Software and other technology: Biometric Handled Devices (HDR) $ 183,785 $ 170,394 SRIO Mobil Payments Solution (SRIO) 130,603 121,731 MultiPay kiosk project 29,937 - Payment Gateway SW 295,816 - Tranxa Transaction / Switch SW 373,970 - Phobos Management SW 118,754 - Terminal Manager SW 179,331 - Mobile Banking SW 261,446 - ID Station Kiosk 10,818 10,818 Software - 200,000 Other 31,609 - Patents and Licenses 14,528 - Total Intellectual Property 1,630,597 502,943 Noncompete agreements 14,087 - Total Intangible assets 1,644,684 502,943 Less: accumulated amortization (208,150 ) (81,169 ) Intangible Assets, Net $ 1,436,534 $ 421,774 |
Schedule of future amortization expense of intangible assets | Future amortization expense of intangible assets for each of the years ended December 31 is as follows (in thousands): 2016 $ 166,830 2017 165,928 2018 162,353 2019 160,707 2020 158,636 Thereafter 622,080 $ 1,436,534 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following: December 31, December 31, 2015 2014 Computers and equipment $ 88,047 $ 35,819 Furniture and fixtures 69,168 54,016 $ 157,215 $ 89,835 Less: accumulated depreciation 119,440 68,253 Property and Equipment, net $ 37,775 $ 21,582 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other assets | Other assets consist primarily of costs associated with the construction of the HDR (Handheld Document Reader) mobile biometric devices, which consisted of the following as of : December 31, 2015 December 31, 2014 ID Partner $ 225,862 $ 174,387 ID Complete 93,730 - $ 319,592 $ 174,387 |
ACCOUNTS PAYABLE AND ACCRUED 29
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | Accounts payable and accrued liabilities consist of the following: December 31, December 31, 2015 2014 Accounts payable $ 301,455 $ 40,488 Accrued interest on loans 96,579 - Accrued liabilities 319,466 109,740 Total accounts payable and accrued liabilities $ 717,500 $ 150,228 Related party payables $ - $ 60,200 |
MULTIPAY ACQUISITION (Tables)
MULTIPAY ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Schedule of the total fair value of consideration transferred as well as the fair values of the assets acquired and liabilities assumed | The following table summarizes the total fair value of consideration transferred as well as the fair values of the assets acquired and liabilities assumed. Fair value of common stock $ 860,491 Liabilities assumed 909,721 Total fair value of consideration transferred $ 1,770,212 Cash $ 987 Accounts receivable 60,673 Inventory 62,861 Other assets 171,133 Property and equipment 20,000 Intellectual property 1,273,781 Non-compete agreement 14,087 Total identifiable tangible assets acquired 1,603,522 Goodwill $ 166,689 |
Schedule of activity for Goodwill | The activity for Goodwill during the year ended December 31, 2015 is as follows: Goodwill Balance, beginning of year $ - Acquisition of MultiPay 166,689 Balance, end of year $ 166,689 |
Schedule of consolidated statements of operations | The following unaudited pro forma information gives effect to the Companys acquisition of Multipay as if the acquisition had occurred on January 1, 2014 and had been included in the Companys consolidated statements of operations for the years 2015 and 2014. 2015 2014 Pro forma net revenues $ 816,140 $ 875,804 Pro forma net loss $ (36,752,327 ) $ (1,068,460 ) |
PROMISSORY NOTES PAYABLE (Table
PROMISSORY NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of the notes payable | The following is a summary of the notes payable, excluding MultiPay note payable described above, outstanding as of December 31, 2015: 12% note payable issued in August 2015 (a) $ 27,000 12% notes payable issued in September 2015 (b), (c) 973,000 12% notes payable issued in October 2015 (d) 225,000 12% note payable issued in November 2015 (e) 25,000 12% notes payable issued in December 2015 (f) 850,000 Unamortized debt discounts (1,193,947 ) Unamortized debt issuance costs (368,653 ) $ 537,400 (a) In August 2015, the Company entered into an agreement with an accredited investor, whereby the Company issued a 12% note for $27,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.10 per share; · In connection with the issuance of these notes, the Company also issued warrants for the purchase of 180,000 shares of the Companys common stock at an exercise price of $0.15 per share for a period of five years. (b) In September 2015, the Company entered into an agreement with seven accredited investors, whereby the Company issued separate 12% notes for $973,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.10 per share; · In connection with the issuance of the notes, the Company also issued warrants for the purchase of 6,486,667 shares of the Companys common stock at an exercise price of $0.15 per share for a period of five years. (c) On September 4, 2015, the Company entered into a Securities Purchase Agreement with a director of the Company, pursuant to which the director invested $100,000 into the Company in consideration of a Secured Promissory Note (the "Director Note") and a common stock purchase warrant to acquire an aggregate of 250,000 shares of common stock exercisable for a period of five years at an exercise price of $0.40. The Director Note bears interest of 10%, is payable on the earlier of the Company closing a financing in excess of $1,000,000 or on September 19, 2016. The Director Note contains standard default terms and is secured by all assets of the Company. In the event the Company defaults under the Director Note, the Company is required to issue the director an additional common stock purchase warrant to acquire 666,667 shares of common stock at $0.15 per share. (d) In October 2015, the Company entered into an agreement with four accredited investors, whereby the Company issued separate 12% notes for $225,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.10 per share; · In connection with the issuance of the notes, the Company also issued warrants for the purchase of 1,500,000 shares of the Companys common stock at an exercise price of $0.15 per share for a period of five years. (e) In November 2015, the Company entered into an agreement with an accredited investor, whereby the Company issued a 12% note for $25,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.10 per share; In connection with the issuance of these notes, the Company also issued warrants for the purchase of 166,667 shares of the Companys common stock at an exercise price of $0.15 per share for a period of five years. (f) In December 2015, the Company entered into an agreement with three accredited investors, whereby the Company issued separate 12% notes for $850,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: · The principal amount of the notes shall be repaid within 12 months of the issuance date at a 12% interest rate; · The note holder may convert the accrued interest of his note into shares of the Companys common stock at a conversion price of $0.48 per share; however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities; · In connection with the issuance of the notes, the Company also issued warrants for the purchase of 1,770,834 shares of the Companys common stock at an exercise price of $0.48 per share for a period of five years; however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities. |
Schedule of maturities of notes payable | Maturities of notes payable at December 31, 2015 are as follows: Year Ending December 31, 2016 $ 2,155,200 2017 41,469 $ 2,196,669 |
Schedule of assumptions used in calculating the fair value of warrants | The assumptions used in calculating the fair value of warrants accounted for as equity has been estimated using the Black-Scholes option pricing model for warrants granted during the year ended December 31, 2015 are as follows: Expected Volatility 80% Expected Term 5.0 Years Risk Free Rate 1.37% to 1.65% Dividend Rate 0.00% |
Schedule of the proceeds of the notes payable and a reconciliation | A summary of the proceeds of the notes payable and a reconciliation of those proceeds to the note balances at December 31, 2015 is as follows: Balance as of January 1, 2015 $ - Proceeds from issuances of notes payable 2,200,000 Less debt discount: Equity warrants (932,884 ) Derivative liability warrants (556,892 ) Debt issuance costs (454,100 ) Amortization of debt discount: Equity warrants 282,097 Derivative liability warrants 13,732 Amortization of debt issuance costs 85,447 Payments on notes payable (100,000 ) Balance as of December 31, 2015 $ 537,400 |
CONVERTIBLE NOTES PAYABLE AND32
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of of the convertible notes payable outstanding | The following is a summary of the convertible notes payable outstanding as of December 31, 2015: December 31, 2015 10% convertible notes payable issued in June 2015 (a) $ 700,000 10% convertible notes payable issued in July 2015 (b) 166,000 12% convertible notes payable issued in September 2015 (c) 172,095 Unamortized discounts on convertible notes (583,049 ) Unamortized debt issuance costs (71,700 ) $ 383,346 (a) In June 2015, the Company entered into agreements with nine individual accredited investors, whereby the Company issued separate 10% convertible notes for a total of $700,000 in a private offering and is secured by the assets of the Company. The notes have the following principal terms: |
Schedule of assumptions used in calculating the fair value of warrants accounted for as equity | The assumptions used in calculating the fair value of warrants accounted for as equity has been estimated using the Black-Scholes option pricing model for warrants granted during the year ended December 31, 2015 are as follows: Expected Volatility 80 % Expected Term 5.0 Years Risk Free Rate 1.48 % Dividend Rate 0.00 % |
Schedule of the proceeds of the convertible notes payable and a reconciliation | A summary of the proceeds of the convertible notes payable and a reconciliation of those proceeds to the convertible notes balances at December 31, 2015 is as follows: Balance as of January 1, 2015 $ - Proceeds from issuances of convertible notes payable 1,040,000 Conversion of note payable, related party, to convertible note payable 172,095 Less debt discount: Equity warrants (129,820 ) Beneficial conversion feature (42,275 ) Derivative liability warrants and conversion features (947,899 ) Debt issuance costs (140,700 ) Amortization of debt discount: Equity warrants and beneficial conversion feature 45,485 Derivative liability warrants and conversion features 491,460 Amortization of debt issuance costs 69,000 Conversion of notes payable to equity (174,000 ) Balance as of December 31, 2015 $ 383,346 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative liabilities | Derivative liabilities at December 31, 2015 consist of the following: Common stock warrants $ 11,043,126 Debt conversion features 14,402,519 $ 25,445,645 |
Schedule of ranges of assumptions utilized in estimating the fair value of the conversion options and warrants | The ranges of assumptions utilized in estimating the fair value of the derivative liabilities related to the conversion features and warrants on the dates of issuance, settlement, and at December 31, 2015, are as follows: Expected Volatility 58% to 83% Expected Term 0.0 to 5.0 Years Risk Free Rate 0.02% to 1.8% Dividend Rate 0.00% Triggering capital raise probabilities 25% to 75% |
Schedule of of derivative activity | A summary of derivative activity for the year ended December 31, 2015 is as follows: Balance as of January 1, 2015 $ - Warrants in connection with promissory notes payable (see Note 8) 556,892 Warrants and conversion features in connection with convertible notes payable, including day one derivative loss of $3,832,920 (see Note 9) 4,780,819 Note conversions (2,706,167 ) Change in fair value, net of day one derivative loss of $3,832,920 22,814,101 Balance as of December 31, 2015 $ 25,445,645 |
STOCKHOLDER'S EQUITY (Tables)
STOCKHOLDER'S EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of of the warrant activity | A summary of the warrant activity during the year ended December 31, 2015 is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding, December 31, 2014 - $ - - Granted pursuant to Promissory Notes Payable (Note 8) 10,354,168 $ 0.21 4.8 Granted pursuant to Convertible Notes Payable (Note 9) 24,817,576 $ 0.06 4.5 Outstanding, December 31, 2015 35,171,744 $ 0.10 4.6 Exercisable, December 31, 2015 35,171,744 $ 0.10 4.6 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes | Year ended December 31, 2015 2014 United States $ (35,853,893 ) $ (904,687 ) Outside United States (825,276 ) - Income (loss) before provision for income taxes, net $ (36,679,169 ) $ (904,687 ) |
Schedule of components of deferred tax assets and liabilities | The Components of deferred tax assets and liabilities are as follows: Year ended December 31, 2015 2014 Deferred tax assets: Net operating loss carry-forward $ 1,086,609 $ 811,455 Depreciation and amortization - 3,018 Stock options 2,378,259 - Total deferred tax assets 3,464,868 814,473 Less: Valuation allowance (2,621,446 ) (814,473 ) Net deferred tax assets 843,422 - Deferred tax liabilities: Depreciation and amortization (9,034 ) - Debt issuance costs (165,704 ) - Note discount (668,684 ) - Total deferred tax liabilities (843,422 ) - Total deferred tax asset/liabilities, net $ - $ - |
Schedule of reconciliation from the U.S. Federal statutory income rate | The table below shows reconciliation from the U.S. Federal statutory income rate of 34.0% to the effective income tax rate: Year ended December 31, 2015 2014 Federal statutory rate 34.00 % 34.00 % State tax rate 3.63 % 1.00 % Permanent difference -30.32 % 0.00 % Change in valuation allowance -7.31 % -35.00 % Total tax (benefit) provision 0.00 % 0.00 % |
2015 QUARTERLY RESTATEMENTS (36
2015 QUARTERLY RESTATEMENTS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of restatement of consolidated financial statements | Condensed Consolidated Balance Sheet: As of March 31, 2015 (unaudited) As Previously Reported Adjustment Restated Cash $ 13,528 $ - $ 13,528 Total current assets 13,528 - 13,528 Property and Equipment, Net 18,566 - 18,566 Other Assets 203,390 - 203,390 Intangible Assets 418,052 (200,000 ) 218,052 Total assets $ 653,536 $ (200,000 ) $ 453,536 Accounts Payable and Accrued Expenses $ 137,833 $ - $ 137,833 Accounts Payable - related party 90,650 - 90,650 Note Payable - related parties 243,887 - 243,887 Total current liabilities 472,370 - 472,370 Stockholders' equity (deficit) 181,166 (200,000 ) (18,834 ) Total liabilities and stockholders'' equity (deficit) $ 653,536 $ (200,000 ) $ 453,536 Condensed Consolidated Statement of Operations: Three Months Ended March 31, 2015 (unaudited) As Previously Reported Adjustment Restated Operating Expenses: Depreciation and amortization $ 11,271 $ - $ 11,271 Research and development 24,000 200,000 224,000 General and administrative 472,836 - 472,836 Total operating expenses 508,107 200,000 708,107 Loss from operations (508,107 ) (200,000 ) (708,107 ) Interest expense (1,755 ) - (1,755 ) Net loss $ (509,862 ) $ (200,000 ) $ (709,862 ) Net loss per share: Basic and Diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) Condensed Consolidated Balance Sheet: As of June 30, 2015 (unaudited) As Previously Adjustments As Restated Cash $ 525,541 $ — $ 525,541 Contingent Asset 149,848 (1) (149,848 ) — Other current assets 237,311 — 237,311 Total current assets 912,700 (149,848 ) 762,852 Property and Equipment, Net 31,885 — 31,885 Other Assets 240,636 — 240,636 Goodwill — (1) 166,689 166,689 Intangible Assets 1,425,728 (1), (2) 986 1,426,714 Total assets $ 2,610,949 $ 17,827 $ 2,628,776 Accounts Payable and Accrued Expenses $ 625,600 $ — $ 625,600 Convertible Notes Payable - Net 67,918 (13,584 ) 54,334 Derivative Liability 4,530,375 (3) (907,123 ) 3,623,252 Related Party Payables 83,838 — 83,838 Contingent Liability 149,848 (1) (149,848 ) — Contingent Purchase Consideration — (1) 370,125 370,125 Note Payable - Related Party 234,190 — 234,190 Promissory Note Payable 199,718 — 199,718 Total current liabilities 5,891,487 (700,430 ) 5,191,057 Stockholders' equity (deficit) (3,280,538 ) 718,257 (2,562,281 ) Total liabilities and stockholders'' equity (deficit) $ 2,610,949 $ 17,827 $ 2,628,776 Condensed Consolidated Statements of Operations: Three Months Ended June 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Restated Revenue $ 11,046 $ - $ 11,046 $ - $ 11,046 Operating Expenses: Depreciation and amortization 11,469 - 11,469 (1) 32,549 44,018 Research and development 853 - 853 - 853 General and administrative 570,622 (67,918 ) 502,704 (4), (5) (46,344 ) 456,360 Total operating expenses 582,944 (67,918 ) 515,026 (13,795 ) 501,231 Loss from operations (571,898 ) 67,918 (503,980 ) 13,795 (490,185 ) Derivative expense (3,680,374 ) - (3,680,374 )(3) 815,021 (2,865,353 ) Interest expense (11,741 ) (67,918 ) (79,659 )(3) 45,685 (33,974 ) Translation loss (26,259 ) - (26,259 ) - (26,259 ) Net loss $ (4,290,272 ) $ - $ (4,290,272 ) $ 874,501 $ (3,415,771 ) Net loss per share: Basic and Diluted $ (0.03 ) $ - $ (0.03 ) $ 0.01 $ (0.02 ) Six Months Ended June 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Restated Revenue $ 11,046 $ - $ 11,046 $ - $ 11,046 Operating Expenses: Depreciation and amortization 22,740 - 22,740 (1) 32,549 55,289 Research and development 24,853 - 24,853 (2) 200,000 224,853 General and administrative 1,043,459 (6) (67,918 ) 975,541 (4), (5) (46,344 ) 929,197 Total operating expenses 1,091,052 (67,918 ) 1,023,134 186,205 1,209,339 Loss from operations (1,080,006 ) 67,918 (1,012,088 ) (186,205 ) (1,198,293 ) Derivative expense (3,680,374 ) - (3,680,374 )(3) 815,021 (2,865,353 ) Interest expense (13,496 ) (6) (67,918 ) (81,414 )(3) 45,685 (35,729 ) Translation loss (26,259 ) - (26,259 ) - (26,259 ) Net loss $ (4,800,135 ) $ - $ (4,800,135 ) $ 674,501 $ (4,125,634 ) Net loss per share: Basic and Diluted $ (0.03 ) $ - $ (0.03 ) $ 0.01 $ (0.02 ) (1) Fair Value of Intangible Assets In Connection with Business Acquisition. (2) Intangible Assets—Capitalized Software. (3) Derivative Liability. (4) Stock-Based Compensation. (5) Debt Issuance Costs. (6) Reclassifications. Condensed Consolidated Balance Sheet: As of September 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Restated Cash $ 576,897 $ - $ 576,897 $ - $ 576,897 Contingent asset 87,941 - 87,941 (1) (87,941 ) - Other current assets 546,503 - 546,503 - 546,503 Total current assets 1,211,341 - 1,211,341 (87,941 ) 1,123,400 Property and Equipment, Net 90,070 - 90,070 - 90,070 Other assets 146,160 - 146,160 - 146,160 Inventory 174,838 - 174,838 - 174,838 Goodwill 28,353 - 28,353 (1) 138,336 166,689 Intangible assets, net 1,694,687 - 1,694,687 (1), (2) (31,562 ) 1,663,125 Total assets $ 3,345,449 $ - $ 3,345,449 $ 18,833 $ 3,364,282 Accounts payable and accrued expenses $ 835,119 $ - $ 835,119 $ - $ 835,119 Related party payables 127,320 - 127,320 - 127,320 Contingent liability 87,941 - 87,941 (1) (87,941 ) - Contingent purchase consideration - - - (1) 370,125 370,125 Convertible notes payable, net 262,158 (6) (37,328 ) 224,830 (3) (121,655 ) 103,175 Notes payable, net - 189,230 189,230 (3) 159,357 348,587 Related party convertible notes payable 150,000 - 150,000 (3) (150,000 ) - Promissory note payable 151,902 (151,902 ) - - - Derivative liabilities 26,514,647 - 26,514,647 (3) 1,545,232 28,059,879 Total current liabilities 28,129,087 - 28,129,087 1,715,118 29,844,205 Stockholders' equity (deficit) (24,783,638 ) - (24,783,638 ) (1,696,285 ) (26,479,923 ) Total liabilities and stockholders' equity (deficit) $ 3,345,449 $ - $ 3,345,449 $ 18,833 $ 3,364,282 Condensed Consolidated Statements of Operations: Three Months Ended September 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Restated Revenue $ 75,312 $ - $ 75,312 $ - $ 75,312 Operating Expenses: Depreciation and amortization 10,135 - 10,135 (1) 32,549 42,684 Research and development - - - - - General and administrative 840,199 4,849,740 5,689,939 (4), (5) (1,957,052 ) 3,732,887 Total operating expenses 850,334 4,849,740 5,700,074 (1,924,503 ) 3,775,571 Loss from operations (775,022 ) (4,849,740 ) (5,624,762 ) 1,924,503 (3,700,259 ) Derivative expense (20,478,790 ) - (20,478,790 )(3) (3,767,837 ) (24,246,627 ) Stock compensation expense (4,849,740 ) 4,849,740 - - - Financing Costs of debentures (1,357,917 ) - (1,357,917 ) 1,357,917 - Amortizaton of debt discounts (358,705 ) 358,705 - - - Interest expense (98,166 ) (358,705 ) (456,871 )(3) (11,919 ) (468,790 ) Other income 9,315 - 9,315 - 9,315 Net loss $ (27,909,025 ) $ - $ (27,909,025 ) $ (497,336 ) $ (28,406,361 ) Net loss per share: Basic and Diluted $ (0.16 ) $ - $ (0.16 ) $ (0.00 ) $ (0.17 ) Nine Months Ended September 30, 2015 (unaudited) As Previously Reported Reclassifications As Reclassified Adjustments As Reclassified Revenue $ 86,358 $ - $ 86,358 $ - $ 86,358 Operating Expenses: Depreciation and amortization 34,312 - 34,312 (1) 65,098 99,410 Research and development 24,853 - 24,853 (2) 200,000 224,853 General and administrative 1,817,906 4,849,740 6,667,646 (4), (5) (2,003,395 ) 4,664,251 Total operating expenses 1,877,071 4,849,740 6,726,811 (1,738,297 ) 4,988,514 Loss from operations (1,790,713 ) (4,849,740 ) (6,640,453 ) 1,738,297 (4,902,156 ) Derivative expense (20,979,041 ) - (20,979,041 )(3) (6,132,939 ) (27,111,980 ) Stock compensation expense (4,849,740 ) 4,849,740 - - - Financing Costs (4,538,040 ) - (4,538,040 ) 4,538,040 - Amortizaton of debt discounts (421,524 ) 421,524 - - - Interest expense (112,304 ) (421,524 ) (533,828 )(3) 28,667 (505,161 ) Other income 9,315 - 9,315 - 9,315 Net loss $ (32,682,047 ) $ - $ (32,682,047 ) $ 172,065 $ (32,509,982 ) Net loss per share: Basic and Diluted $ (0.19 ) $ - $ (0.19 ) $ 0.00 $ (0.19 ) (1) Fair Value of Intangible Assets In Connection with Business Acquisition. (2) Intangible Assets—Capitalized Software. (3) Derivative Liability. (4) Stock-Based Compensation. (5) Debt Issuance Costs. (6) Reclassifications. |
DESCRIPTION OF BUSINESS AND S37
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated deficit | $ (39,074,590) | $ (2,395,421) |
Cash, FDIC insured amount | 250,000 | |
Cash, FDIC uninsured amount | 61,000 | |
Cash held by acquiry | 42,000 | |
Depreciation expense | $ 20,072 | 24,393 |
Intangible asset, useful life | 10 years | |
Amortization expense | $ 126,980 | $ 24,448 |
Minimum [Member] | ||
Property and equipment, estimated useful life | 3 years | |
Maximum [Member] | ||
Property and equipment, estimated useful life | 5 years | |
Software Development [Member] | ||
Intangible asset, useful life | 3 years | |
Convertible Notes Payable [Member] | ||
Fair value of notes payable | $ 1,038,095 | |
Fair value difference | 174,000 | |
Promissory Notes Payable [Member] | ||
Fair value of notes payable | 2,100,000 | |
Fair value difference | $ 383,347 | |
Revenues [Member] | ||
Percentage of concentration risk | 32.00% | |
Three Customer [Member] | Revenues [Member] | ||
Percentage of concentration risk | 61.00% | |
One Customer [Member] | Revenues [Member] | ||
Percentage of concentration risk | 68.00% | |
One Customer [Member] | Accounts Receivable [Member] | ||
Percentage of concentration risk | 98.00% |
STOCK OPTION GRANTS (Details)
STOCK OPTION GRANTS (Details) | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding, beginning | |
Granted | 47,800,000 |
Outstanding, ending | 47,800,000 |
Exercisable, ending | 19,962,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Granted | $ / shares | $ 0.32 |
Outstanding, ending | $ / shares | 0.32 |
Exercisable, ending | $ / shares | $ 0.36 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Life [Roll Forward] | |
Outstanding, ending | 4 years 8 months 27 days |
Exercisable, ending | 4 years 8 months 27 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Roll Forward] | |
Outstanding, ending | $ | $ 7,698,650 |
Exercisable, ending | $ | $ 7,698,650 |
STOCK OPTION GRANTS (Details 1)
STOCK OPTION GRANTS (Details 1) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Outstanding, Number of Options | 47,800,000 | |
Outstanding, Exercise Price | $ 0.32 | |
Exercisable, Number of Options | 19,962,500 | |
Exercisable, Exercise Price | $ 0.36 | |
Exercise Price $0.45 [Member] | ||
Outstanding, Number of Options | 30,000,000 | |
Outstanding, Exercise Price | $ 0.45 | |
Exercisable, Number of Options | 15,000,000 | |
Exercisable, Exercise Price | $ 0.45 | |
Exercise Price $0.0001 [Member] | ||
Outstanding, Number of Options | 3,500,000 | |
Outstanding, Exercise Price | $ 0.0001 | |
Exercisable, Number of Options | 875,000 | |
Exercisable, Exercise Price | $ 0.0001 | |
Exercise Price $0.10 [Member] | ||
Outstanding, Number of Options | 8,000,000 | |
Outstanding, Exercise Price | $ 0.10 | |
Exercisable, Number of Options | 2,687,500 | |
Exercisable, Exercise Price | $ 0.10 | |
Exercise Price $0.15 [Member] | ||
Outstanding, Number of Options | 6,300,000 | |
Outstanding, Exercise Price | $ 0.15 | |
Exercisable, Number of Options | 1,400,000 | |
Exercisable, Exercise Price | $ 0.15 |
STOCK OPTION GRANTS (Details 2)
STOCK OPTION GRANTS (Details 2) | 12 Months Ended |
Dec. 31, 2015$ / shares | |
Expected dividend yield | 0.00% |
Maximum [Member] | |
Stock price | $ 0.55 |
Risk-free interest rate | 1.50% |
Expected life of the options | 4 years 2 months 16 days |
Expected volatility | 93.00% |
Minimum [Member] | |
Stock price | $ 0.02 |
Risk-free interest rate | 1.40% |
Expected life of the options | 2 years 6 months |
Expected volatility | 85.00% |
STOCK OPTION GRANTS (Details Na
STOCK OPTION GRANTS (Details Narrative)) | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Number of common shares granted | shares | 47,800,000 |
Weighted average fair value | $ 0.32 |
Stock based compensation expense | $ | $ 6,320,114 |
Unamortized stock option expense | $ | $ 7,688,515 |
Minimum [Member] | |
Weighted average fair value | $ 0.01 |
Weighted average exercise price | 0.01 |
Maximum [Member] | |
Weighted average fair value | 0.32 |
Weighted average exercise price | $ 0.34 |
Equity Compensation Plan ("2014 Plan") [Member] | |
Number of common shares granted | shares | 25,000,000 |
Percentage of shares outstanding | 2.00% |
Maximum shares of common stock increase | shares | 250,000 |
INTANGIBLE ASSETS, NET AND GO42
INTANGIBLE ASSETS, NET AND GOODWILL (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Total Intangible assets | $ 1,644,684 | $ 502,943 |
Less: accumulated amortization | (208,150) | (81,169) |
Intangible Assets, Net | 1,436,534 | 421,774 |
Noncompete Agreements [Member] | ||
Total Intangible assets | 14,087 | |
Patents and Licenses [Member] | ||
Total Intangible assets | 14,528 | |
Biometric Handled Devices (HDR)[Member] | ||
Total Intangible assets | 183,785 | 170,394 |
SRIO Mobil Payments Solution (SRIO) [Member] | ||
Total Intangible assets | 130,603 | 121,731 |
MultiPay kiosk project [Member] | ||
Total Intangible assets | 29,937 | |
Payment Gateway SW [Member] | ||
Total Intangible assets | 295,816 | |
Tranxa Transaction / Switch SW [Member] | ||
Total Intangible assets | 373,970 | |
Phobos Management SW [Member] | ||
Total Intangible assets | 118,754 | |
Terminal Manager SW [Member] | ||
Total Intangible assets | 179,331 | |
Mobile Banking SW [Member] | ||
Total Intangible assets | 261,446 | |
ID Station Kiosk [Member] | ||
Total Intangible assets | 10,818 | 10,818 |
Software Development [Member] | ||
Total Intangible assets | 200,000 | |
Other [Member] | ||
Total Intangible assets | 31,609 | |
Intellectual Property [Member] | ||
Total Intangible assets | $ 1,630,597 | $ 502,943 |
INTANGIBLE ASSETS, NET AND GO43
INTANGIBLE ASSETS, NET AND GOODWILL (Details 1) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,016 | $ 166,830 | |
2,017 | 165,928 | |
2,018 | 162,353 | |
2,019 | 160,707 | |
2,020 | 158,636 | |
Thereafter | 622,080 | |
Total | $ 1,436,534 | $ 421,774 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Property and Equipment, gross | $ 157,215 | $ 89,835 |
Less: accumulated depreciation | 119,440 | 68,253 |
Property and Equipment, net | 37,775 | 21,582 |
Furniture and Fixtures [Member] | ||
Property and Equipment, gross | 69,168 | 54,016 |
Computer Equipment [Member] | ||
Property and Equipment, gross | $ 88,047 | $ 35,819 |
PROPERTY AND EQUIPMENT, NET (45
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Proceeds from sale of property and equipment | $ 240,000 | |
Loss on sale of property | $ (71,616) |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Other assets | $ 319,592 | $ 174,387 |
ID Complete [Member] | ||
Other assets | 319,592 | 174,387 |
Other [Member] | ID Complete [Member] | ||
Other assets | 93,730 | |
Other [Member] | ID Partner [Member] | ||
Other assets | $ 225,862 | $ 174,387 |
ACCOUNTS PAYABLE AND ACCRUED 47
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 301,455 | $ 40,488 |
Accrued interest on loans | 96,579 | 0 |
Accrued liabilities | 319,466 | 109,740 |
Total accounts payable and accrued liabilities | 717,500 | 150,228 |
Related party payables | $ 0 | $ 60,200 |
MULTIPAY ACQUISITION (Details)
MULTIPAY ACQUISITION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill | $ 166,689 | |
Multipay S.A., a Colombian Corporation [Member] | ||
Fair value of common stock | 860,491 | |
Liabilities assumed | 909,721 | |
Total fair value of consideration transferred | 1,770,212 | |
Cash | 987 | |
Accounts receivable | 60,673 | |
Inventory | 62,861 | |
Other assets | 171,133 | |
Property and equipment | 20,000 | |
Intellectual property | 1,273,781 | |
Non-compete agreement | 14,087 | |
Total identifiable tangible assets acquired | 1,603,522 | |
Goodwill | $ 166,689 |
MULTIPAY ACQUISITION (Details 1
MULTIPAY ACQUISITION (Details 1) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Balance, end of year | $ 166,689 |
Multipay S.A., a Colombian Corporation [Member] | |
Balance, beginning of year | |
Acquisition of MultiPay | 166,689 |
Balance, end of year | $ 166,689 |
MULTIPAY ACQUISITION (Details 2
MULTIPAY ACQUISITION (Details 2) - Multipay S.A., a Colombian Corporation [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Pro forma net revenues | $ 816,140 | $ 875,804 |
Pro forma net loss | $ (36,752,327) | $ (1,068,460) |
MULTIPAY ACQUISITION (Details N
MULTIPAY ACQUISITION (Details Narrative) - USD ($) | May 07, 2015 | Apr. 06, 2015 | May 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | May 18, 2015 |
Net revenues | $ 735,364 | |||||
Operating loss | (8,895,620) | $ (767,846) | ||||
Multipay S.A., a Colombian Corporation [Member] | ||||||
Common stock to Multipay Shareholders | 1,498,483 | |||||
Provision of shares issued | 6,101,517 | |||||
Contingent liability | 370,000 | |||||
Net revenues | 229,597 | |||||
Operating loss | $ 659,524 | |||||
Multipay S.A., a Colombian Corporation [Member] | Amemded Share Purchase Agreement [Member] | ||||||
Number of shares issued within 10 days of closing date | 6,101,517 | |||||
Common stock to Multipay Shareholders | 1,498,483 | |||||
Multipay S.A., a Colombian Corporation [Member] | Share Purchase Agreement [Member] | ||||||
Percentage of common stock acquired | 100.00% | |||||
Number of shares issued | 7,600,000 | |||||
Number of shares issued within 10 days of closing date | 7,000,000 | |||||
Shareholders paying certain liabilities | $ 370,000 | |||||
Common stock to Multipay Shareholders | 600,000 |
PROMISSORY NOTES PAYABLE (Detai
PROMISSORY NOTES PAYABLE (Details) | Dec. 31, 2015USD ($) |
Notes Payable [Member] | |
Unamortized discounts on convertible notes | $ (1,193,947) |
Unamortized debt issuance costs | (368,653) |
Notes payable | 537,400 |
12% Note Payable Issued August 2015 [Member] | |
Notes payable | 27,000 |
12% Notes Payable Issued September 2015 [Member] | |
Notes payable | 973,000 |
12% Notes Payable Issued October 2015 [Member] | |
Notes payable | 225,000 |
12% Note Payable Issued November 2015 [Member] | |
Notes payable | 25,000 |
12% Notes Payable Issued December 2015 [Member] | |
Notes payable | $ 850,000 |
PROMISSORY NOTES PAYABLE (Det53
PROMISSORY NOTES PAYABLE (Details 1) - Notes Payable [Member] | Dec. 31, 2015USD ($) |
2,016 | $ 2,155,200 |
2,017 | 41,469 |
Total | $ 2,196,669 |
PROMISSORY NOTES PAYABLE (Det54
PROMISSORY NOTES PAYABLE (Details 2) | 12 Months Ended |
Dec. 31, 2015 | |
Dividend Rate | 0.00% |
Maximum [Member] | |
Expected Volatility | 83.00% |
Expected Term | 5 years |
Risk Free Rate | 1.80% |
Minimum [Member] | |
Expected Volatility | 58.00% |
Expected Term | 0 years |
Risk Free Rate | 0.02% |
Notes Payable [Member] | Warrant [Member] | |
Expected Volatility | 80.00% |
Expected Term | 5 years |
Dividend Rate | 0.00% |
Notes Payable [Member] | Maximum [Member] | Warrant [Member] | |
Risk Free Rate | 165.00% |
Notes Payable [Member] | Minimum [Member] | Warrant [Member] | |
Risk Free Rate | 1.37% |
PROMISSORY NOTES PAYABLE (Det55
PROMISSORY NOTES PAYABLE (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Proceeds from issuances of notes payable | $ 2,200,000 | $ 1,148,417 |
Amortization of debt discount: | ||
Amortization of debt issuance costs | 154,447 | |
Payments on notes payable | 1,062,704 | |
Notes Payable [Member] | ||
Balance at beginning | ||
Proceeds from issuances of notes payable | 2,200,000 | |
Less debt discount: | ||
Equity warrants | (932,884) | |
Derivative liability warrants | (556,892) | |
Debt issuance costs | (454,100) | |
Amortization of debt discount: | ||
Equity warrants | 282,097 | |
Derivative liability warrants | 13,732 | |
Amortization of debt issuance costs | 85,447 | |
Payments on notes payable | (100,000) | |
Balance at ending | $ 537,400 |
PROMISSORY NOTES PAYABLE (Det56
PROMISSORY NOTES PAYABLE (Details Narrative) | 12 Months Ended | |
Dec. 31, 2015USD ($)Number | Dec. 31, 2014USD ($) | |
Promissory Notes Payable [Member] | ||
Aggregate face amount | $ 383,347 | |
Notes Payable [Member] | ||
Aggregate face amount | $ 1,165,675 | |
Multipay S.A., a Colombian Corporation [Member] | Promissory Notes Payable [Member] | ||
Aggregate face amount | $ 273,000 | |
Number of promissory notes | Number | 3 | |
Maturity date | Sep. 16, 2017 | |
Payments of principal and interest | $ 6,300 | |
Payment of one of the three promissory notes | 85,000 | |
Remaining two outstanding note amount | $ 96,669 |
PROMISSORY NOTES PAYABLE (Det57
PROMISSORY NOTES PAYABLE (Details Narrative 1) - USD ($) | Sep. 25, 2015 | Sep. 04, 2015 | Dec. 31, 2015 | Nov. 30, 2015 | Oct. 31, 2015 | Sep. 30, 2015 | Aug. 31, 2015 | May 31, 2015 | Dec. 31, 2014 |
12% Note Payable Issued November 2015 [Member] | Accredited Investor [Member] | Private Offering [Member] | |||||||||
Aggregate face amount | $ 25,000 | ||||||||
Description of payment terms | Repaid within 12 months of the issuance date. | ||||||||
Debt conversion price (in dollars per share) | $ 0.10 | ||||||||
Decription of collateral | Secured by all assets of the Company. | ||||||||
12% Notes Payable Issued September 2015 [Member] | Seven Accredited Investor [Member] | Private Offering [Member] | |||||||||
Aggregate face amount | $ 973,000 | ||||||||
Description of payment terms | Repaid within 12 months of the issuance date. | ||||||||
Debt conversion price (in dollars per share) | $ 0.10 | ||||||||
12% Notes Payable Issued December 2015 [Member] | Accredited Investor [Member] | Private Offering [Member] | |||||||||
Aggregate face amount | $ 850,000 | ||||||||
Description of payment terms | Repaid within 12 months of the issuance date. | ||||||||
Debt conversion price (in dollars per share) | $ 0.48 | ||||||||
Decription of collateral | Secured by all assets of the Company. | ||||||||
Description of conversion terms | however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities; | ||||||||
12% Notes Payable Issued October 2015 [Member] | Four Accredited Investor [Member] | Private Offering [Member] | |||||||||
Aggregate face amount | $ 225,000 | ||||||||
Description of payment terms | Repaid within 12 months of the issuance date. | ||||||||
Debt conversion price (in dollars per share) | $ 0.10 | ||||||||
Decription of collateral | Secured by all assets of the Company. | ||||||||
12% Note Payable Issued August 2015 [Member] | Accredited Investor [Member] | Private Offering [Member] | |||||||||
Aggregate face amount | $ 27,000 | ||||||||
Description of payment terms | Repaid within 12 months of the issuance date. | ||||||||
Debt conversion price (in dollars per share) | $ 0.10 | ||||||||
Promissory Notes Payable [Member] | |||||||||
Aggregate face amount | $ 383,347 | ||||||||
Notes Payable [Member] | |||||||||
Aggregate face amount | $ 1,165,675 | ||||||||
Warrant [Member] | 12% Note Payable Issued November 2015 [Member] | Accredited Investor [Member] | Private Offering [Member] | |||||||||
Number of shares purchased | 166,667 | ||||||||
Warrant terms | 5 years | ||||||||
Warrant exercise price (in dollars per share) | $ 0.15 | ||||||||
Warrant [Member] | 12% Notes Payable Issued September 2015 [Member] | Seven Accredited Investor [Member] | Private Offering [Member] | |||||||||
Number of shares purchased | 6,486,667 | ||||||||
Warrant terms | 5 years | ||||||||
Warrant exercise price (in dollars per share) | $ 0.15 | ||||||||
Warrant [Member] | 12% Notes Payable Issued December 2015 [Member] | Accredited Investor [Member] | Private Offering [Member] | |||||||||
Number of shares purchased | 1,770,834 | ||||||||
Warrant terms | 5 years | ||||||||
Warrant exercise price (in dollars per share) | $ 0.48 | ||||||||
Description of warrant exercise price | however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities; | ||||||||
Warrant [Member] | 12% Notes Payable Issued October 2015 [Member] | Four Accredited Investor [Member] | Private Offering [Member] | |||||||||
Number of shares purchased | 1,500,000 | ||||||||
Warrant terms | 5 years | ||||||||
Warrant exercise price (in dollars per share) | $ 0.15 | ||||||||
Warrant [Member] | 12% Note Payable Issued August 2015 [Member] | Accredited Investor [Member] | Private Offering [Member] | |||||||||
Number of shares purchased | 180,000 | ||||||||
Warrant terms | 5 years | ||||||||
Warrant exercise price (in dollars per share) | $ 0.15 | ||||||||
Officers And Directors [Member] | Warrant [Member] | |||||||||
Number of shares purchased | 4,090,909 | ||||||||
Warrant terms | 5 years | ||||||||
Warrant exercise price (in dollars per share) | $ 0.055 | ||||||||
Letter Agreement [Member] | ID Solutions, Inc. [Member] | Warrant [Member] | |||||||||
Number of shares purchased | 1,146,667 | ||||||||
Warrant terms | 5 years | ||||||||
Warrant exercise price (in dollars per share) | $ 0.15 | ||||||||
Securities Purchase Agreement [Member] | Director [Member] | 12% Secured Convertible Debentures [Member] | |||||||||
Aggregate face amount | $ 100,000 | ||||||||
Securities Purchase Agreement [Member] | Director [Member] | Warrant [Member] | |||||||||
Number of shares purchased | 250,000 | ||||||||
Warrant terms | 5 years | ||||||||
Warrant exercise price (in dollars per share) | $ 0.40 | ||||||||
Securities Purchase Agreement [Member] | Director [Member] | Warrant [Member] | 12% Secured Convertible Debentures [Member] | |||||||||
Number of shares purchased | 250,000 | ||||||||
Warrant terms | 5 years | ||||||||
Warrant exercise price (in dollars per share) | $ 0.40 | ||||||||
Maturity date | Sep. 19, 2016 | ||||||||
Interest rate | 10.00% | ||||||||
Decription of collateral | Secured by all assets of the Company. | ||||||||
Description of debt default | Issue the director an additional common stock purchase warrant to acquire 666,667 shares of common stock at $0.15 per share. |
CONVERTIBLE NOTES PAYABLE AND58
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITY (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
12% Convertible Notes Payable Issued September 2015 [Member] | ||
Convertible notes payable | $ 172,095 | |
10% Convertible Notes Payable Issued June 2015 [Member] | ||
Convertible notes payable | 700,000 | |
10% Convertible Notes Payable Issued July 2015 [Member] | ||
Convertible notes payable | 166,000 | |
Convertible Notes Payable [Member] | ||
Convertible notes payable | 383,346 | |
Unamortized discounts on convertible notes | (583,049) | |
Unamortized debt issuance costs | $ (71,700) |
CONVERTIBLE NOTES PAYABLE AND59
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITY (Details 1) | 12 Months Ended |
Dec. 31, 2015 | |
Dividend Rate | 0.00% |
Convertible Notes Payable [Member] | |
Expected Volatility | 80.00% |
Expected Term | 5 years |
Risk Free Rate | 1.48% |
Dividend Rate | 0.00% |
CONVERTIBLE NOTES PAYABLE AND60
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITY (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Proceeds from issuances of convertible notes payable | $ 1,040,000 | |
Amortization of debt discount: | ||
Amortization of debt issuance costs | 154,447 | |
Conversion of notes payable to equity | 1,062,704 | |
Convertible Notes Payable [Member] | ||
Balance at beginning | ||
Proceeds from issuances of convertible notes payable | 1,040,000 | |
Conversion of note payable, related party, to convertible note payable | 172,095 | |
Less debt discount: | ||
Equity warrants | (129,820) | |
Beneficial conversion feature | (42,275) | |
Derivative liability warrants and conversion features | (947,899) | |
Debt issuance costs | (140,700) | |
Amortization of debt discount: | ||
Equity warrants and beneficial conversion feature | 45,485 | |
Derivative liability warrants and conversion features | 491,460 | |
Amortization of debt issuance costs | 69,000 | |
Conversion of notes payable to equity | (174,000) | |
Balance at ending | 383,346 | |
12% Convertible Notes Payable Issued September 2015 [Member] | ||
Amortization of debt discount: | ||
Balance at ending | 172,095 | |
10% Convertible Notes Payable Issued June 2015 [Member] | ||
Amortization of debt discount: | ||
Balance at ending | 700,000 | |
10% Convertible Notes Payable Issued July 2015 [Member] | ||
Amortization of debt discount: | ||
Balance at ending | $ 166,000 |
CONVERTIBLE NOTES PAYABLE AND61
CONVERTIBLE NOTES PAYABLE AND DERIVATIVE LIABILITY (Details Narrative) - USD ($) | Sep. 25, 2015 | Sep. 04, 2015 | Jul. 31, 2015 | Jun. 30, 2015 | May 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
ID Solutions, Inc. [Member] | |||||||
Gross amount | $ 172,095 | ||||||
Officers And Directors [Member] | Warrant [Member] | |||||||
Number of shares purchased | 4,090,909 | ||||||
Warrant terms | 5 years | ||||||
Warrant exercise price (in dollars per share) | $ 0.055 | ||||||
Letter Agreement [Member] | ID Solutions, Inc. [Member] | |||||||
Gross amount | $ 172,095 | ||||||
Letter Agreement [Member] | ID Solutions, Inc. [Member] | Warrant [Member] | |||||||
Number of shares purchased | 1,146,667 | ||||||
Warrant terms | 5 years | ||||||
Warrant exercise price (in dollars per share) | $ 0.15 | ||||||
Securities Purchase Agreement [Member] | Director [Member] | Warrant [Member] | |||||||
Number of shares purchased | 250,000 | ||||||
Warrant terms | 5 years | ||||||
Warrant exercise price (in dollars per share) | $ 0.40 | ||||||
12% Convertible Notes Payable Issued September 2015 [Member] | Letter Agreement [Member] | ID Solutions, Inc. [Member] | |||||||
Debt conversion price (in dollars per share) | $ 0.10 | ||||||
Maturity date | Sep. 25, 2015 | ||||||
Gross amount | $ 172,095 | ||||||
12% Secured Convertible Debentures [Member] | Securities Purchase Agreement [Member] | Director [Member] | |||||||
Aggregate face amount | $ 100,000 | ||||||
12% Secured Convertible Debentures [Member] | Securities Purchase Agreement [Member] | Director [Member] | Warrant [Member] | |||||||
Number of shares purchased | 250,000 | ||||||
Warrant terms | 5 years | ||||||
Warrant exercise price (in dollars per share) | $ 0.40 | ||||||
Maturity date | Sep. 19, 2016 | ||||||
Interest rate | 10.00% | ||||||
Decription of collateral | Secured by all assets of the Company. | ||||||
Description of debt default | Issue the director an additional common stock purchase warrant to acquire 666,667 shares of common stock at $0.15 per share. | ||||||
10% Convertible Notes Payable Issued June 2015 [Member] | Nine Individual Accredited Investors [Member] | Private Offering [Member] | |||||||
Aggregate face amount | $ 700,000 | ||||||
Description of payment terms | repaid within 12 months of the issuance date. | ||||||
Debt conversion price (in dollars per share) | $ 0.03 | ||||||
Decription of collateral | secured by the assets of the Company. | ||||||
Description of conversion terms | however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities; | ||||||
10% Convertible Notes Payable Issued June 2015 [Member] | Warrant [Member] | Nine Individual Accredited Investors [Member] | Private Offering [Member] | |||||||
Number of shares purchased | 15,400,000 | ||||||
Warrant terms | 5 years | ||||||
Warrant exercise price (in dollars per share) | $ 0.05 | ||||||
Description of warrant exercise price | however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities; | ||||||
10% Convertible Notes Payable Issued July 2015 [Member] | Eight Individual Accredited Investors [Member] | Private Offering [Member] | |||||||
Aggregate face amount | $ 190,000 | ||||||
Description of payment terms | repaid within 12 months of the issuance date. | ||||||
Decription of collateral | secured by the assets of the Company. | ||||||
Description of conversion terms | however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities; | ||||||
10% Convertible Notes Payable Issued July 2015 [Member] | Eight Individual Accredited Investors [Member] | Private Offering [Member] | Maximum [Member] | |||||||
Debt conversion price (in dollars per share) | $ 0.055 | ||||||
10% Convertible Notes Payable Issued July 2015 [Member] | Eight Individual Accredited Investors [Member] | Private Offering [Member] | Minimum [Member] | |||||||
Debt conversion price (in dollars per share) | $ 0.03 | ||||||
10% Convertible Notes Payable Issued July 2015 [Member] | Warrant [Member] | Eight Individual Accredited Investors [Member] | Private Offering [Member] | |||||||
Number of shares purchased | 4,180,000 | ||||||
Warrant terms | 5 years | ||||||
Warrant exercise price (in dollars per share) | $ 0.05 | ||||||
Description of warrant exercise price | however, if certain conditions are met, such as the issuance of new securities at a lower price, the conversion price per share will be adjusted downward to 120% of the price of the newly issued securities; | ||||||
Convertible Notes Payable [Member] | |||||||
Aggregate face amount | 174,000 | ||||||
Face amount of note converted | $ 24,000 | ||||||
Convertible Notes Payable [Member] | Officers And Directors [Member] | |||||||
Aggregate face amount | $ 150,000 | ||||||
Debt conversion price (in dollars per share) | $ 0.055 | ||||||
Maturity date | Sep. 30, 2015 | ||||||
Interest rate | 10.00% | ||||||
Notes Payable [Member] | |||||||
Aggregate face amount | $ 1,165,675 |
DERIVATIVE LIABILITY (Details)
DERIVATIVE LIABILITY (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative Liability Details | ||
Common stock warrants | $ 11,043,126 | |
Debt conversion features | 14,402,519 | |
Derivative liability | $ 25,445,645 |
DERIVATIVE LIABILITY (Details 1
DERIVATIVE LIABILITY (Details 1) | 12 Months Ended |
Dec. 31, 2015 | |
Dividend Rate | 0.00% |
Minimum [Member] | |
Expected Volatility | 58.00% |
Expected Term | 0 years |
Risk Free Rate | 0.02% |
Triggering capital raise probabilities | 25.00% |
Maximum [Member] | |
Expected Volatility | 83.00% |
Expected Term | 5 years |
Risk Free Rate | 1.80% |
Triggering capital raise probabilities | 75.00% |
DERIVATIVE LIABILITY (Details 2
DERIVATIVE LIABILITY (Details 2) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative liability | |
Warrants in connection with promissory notes payable (see Note 8) | 556,892 |
Warrants and conversion features in connection with convertible notes payable, including day one derivative loss of $3,832,920 (see Note 9) | 4,780,819 |
Note conversions | (2,706,167) |
Change in fair value, net of day one derivative loss of $3,832,920 | 22,814,101 |
Derivative liability | 25,445,645 |
Derivative loss | $ 3,832,920 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Sep. 25, 2015 | Sep. 04, 2015 | Sep. 30, 2015 | May 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Revenue form related party | $ 500,000 | |||||
ID Solutions, Inc. [Member] | Consulting And Management Agreement [Member] | ||||||
Revenue form related party | 500,000 | |||||
ID Solutions, Inc. [Member] | Warrant [Member] | Letter Agreement [Member] | ||||||
Number of shares purchased | 1,146,667 | |||||
Warrant terms | 5 years | |||||
Exercise price (in dollars per share) | $ 0.15 | |||||
Director [Member] | Warrant [Member] | Securities Purchase Agreement [Member] | ||||||
Number of shares purchased | 250,000 | |||||
Warrant terms | 5 years | |||||
Exercise price (in dollars per share) | $ 0.40 | |||||
Repayment of debt | $ 100,000 | |||||
Officers And Directors [Member] | Warrant [Member] | ||||||
Number of shares purchased | 4,090,909 | |||||
Warrant terms | 5 years | |||||
Exercise price (in dollars per share) | $ 0.055 | |||||
Network 1 Financial Securities, Inc. [Member] | ||||||
Cash fees and reimbursement of expenses | $ 294,400 | |||||
Number of common share issued | 9,946,667 | |||||
Percentage of commision | 8.00% | |||||
12% Secured Convertible Debentures [Member] | Director [Member] | Securities Purchase Agreement [Member] | ||||||
Face amount | $ 100,000 | |||||
12% Secured Convertible Debentures [Member] | Director [Member] | Warrant [Member] | Securities Purchase Agreement [Member] | ||||||
Number of shares purchased | 250,000 | |||||
Warrant terms | 5 years | |||||
Exercise price (in dollars per share) | $ 0.40 | |||||
Convertible Notes Payable [Member] | ||||||
Face amount | $ 174,000 | |||||
Convertible Notes Payable [Member] | Officers And Directors [Member] | ||||||
Face amount | $ 150,000 | |||||
Promissory Notes Payable [Member] | ||||||
Face amount | 383,347 | |||||
12% Convertible Notes Payable Issued September 2015 [Member] | Certain Directors [Member] | ||||||
Amount due to related parties | $ 172,095 | |||||
Notes Payable [Member] | ||||||
Face amount | $ 1,165,675 |
STOCKHOLDER'S EQUITY (Details)
STOCKHOLDER'S EQUITY (Details) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Outstanding at beginning | shares | |
Outstanding at ending | shares | 35,171,744 |
Exercisable at ending | shares | 35,171,744 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Exercise Price [Roll Forward] | |
Outstanding at beginning | $ / shares | |
Outstanding at ending | $ / shares | 0.10 |
Exercisable at ending | $ / shares | $ 0.10 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Remaining Life [Roll Forward] | |
Outstanding at ending | 4 years 7 months 6 days |
Exercisable at ending | 4 years 7 months 6 days |
Convertible Notes Payable [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Granted | shares | 10,354,168 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Exercise Price [Roll Forward] | |
Granted | $ / shares | $ 0.21 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Remaining Life [Roll Forward] | |
Granted | 4 years 9 months 18 days |
Notes Payable [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Granted | shares | 24,817,576 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Exercise Price [Roll Forward] | |
Granted | $ / shares | $ 0.06 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Remaining Life [Roll Forward] | |
Granted | 4 years 6 months |
STOCKHOLDER'S EQUITY (Details N
STOCKHOLDER'S EQUITY (Details Narative) - USD ($) | 1 Months Ended | 4 Months Ended | 12 Months Ended | ||
May 31, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Aug. 24, 2015 | |
Common stock, authorized | 500,000,000 | 500,000,000 | 300,000,000 | 300,000,000 | |
Common stock, issued | 187,854,139 | 187,854,139 | 163,538,289 | ||
Common stock, outstanding | 187,854,139 | 187,854,139 | 163,538,289 | ||
Preferred Stock, authorized | 20,000,000 | 20,000,000 | |||
Value of shares issued for aquisition | $ 860,491 | ||||
Contingent Liabilities | $ 370,125 | $ 370,125 | |||
Number of shares issued for services | 12,174,167 | ||||
Value of shares issued for services | $ 856,150 | ||||
Convertible Notes Payable [Member] | |||||
Aggregate face amount | $ 174,000 | 174,000 | |||
Number of shares converted | 6,040,166 | ||||
Notes Payable [Member] | |||||
Aggregate face amount | $ 1,165,675 | ||||
Number of shares converted | 2,915,000 | ||||
Promissory Notes Payable [Member] | |||||
Aggregate face amount | $ 383,347 | 383,347 | |||
Multipay S.A., a Colombian Corporation [Member] | |||||
Value of shares issued for aquisition | $ 6,101,517 | ||||
Number of shares issued for aquisition | 860,491 | ||||
Common stock to Multipay Shareholders | 1,498,483 | ||||
Contingent Liabilities | $ 370,125 | ||||
Multipay S.A., a Colombian Corporation [Member] | Promissory Notes Payable [Member] | |||||
Aggregate face amount | $ 273,000 | $ 273,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income (loss) before provision for income taxes, net | $ (36,679,169) | $ (904,687) |
Outside United States [Member] | ||
Income (loss) before provision for income taxes, net | (825,276) | |
United States [Member] | ||
Income (loss) before provision for income taxes, net | $ (35,853,893) | $ (904,687) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net operating loss carry-forward | $ 1,086,609 | $ 811,455 |
Depreciation and amortization | 3,018 | |
Stock options | 2,378,259 | |
Total deferred tax assets | 3,464,868 | 814,473 |
Less: Valuation allowance | (2,621,446) | (814,473) |
Net deferred tax assets | 843,422 | |
Deferred tax liabilities: | ||
Depreciation and amortization | (9,034) | |
Debt issuance costs | (165,704) | |
Note discount | (668,684) | |
Total deferred tax liabilities | (843,422) | |
Total deferred tax asset/liabilities, net |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 34.00% | 34.00% |
State tax rate | 3.63% | 1.00% |
Permanent difference | (30.32%) | 0.00% |
Change in valuation allowance | (7.31%) | (35.00%) |
Total tax (benefit) provision | 0.00% | 0.00% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Federal operating loss carryforwards | $ 2,900,000 |
State operating loss carryforwards | $ 2,900,000 |
Outside United States [Member] | Minimum [Member] | |
Expiration Year | 2,020 |
Outside United States [Member] | Maximum [Member] | |
Expiration Year | 2,035 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | Dec. 19, 2014USD ($) | Dec. 19, 2014USD ($)Number | Jul. 01, 2014USD ($) | Feb. 28, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Rent expense | $ 73,000 | $ 15,000 | ||||
Minimum [Member] | ||||||
Rent expense | $ 74,000 | |||||
Mr. Thomas Szoke [Member] | ||||||
Officers' compensation | $ 60,000 | |||||
Mr. Douglas Solomon [Member] | ||||||
Officers' compensation | 60,000 | |||||
Company Officers [Member] | ||||||
Officers' compensation | $ 1 | |||||
Mr. David Jones [Member] | ||||||
Officers' compensation | $ 60,000 | |||||
Employment Agreement [Member] | Mr. Thomas Szoke [Member] | ||||||
Officers' compensation | $ 275,000 | |||||
Agreement term | 3 years | |||||
Employment Agreement [Member] | Mr. Douglas Solomon [Member] | ||||||
Officers' compensation | $ 250,000 | |||||
Agreement term | 3 years | |||||
Office Facilities [Member] | ||||||
Monthly rental payments | $ 3,000 | |||||
Number of lease | Number | 3 | |||||
Office Facilities [Member] | COLOMBIA [Member] | ||||||
Monthly rental payments | $ 5,700 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | Aug. 10, 2016USD ($)$ / sharesshares | Apr. 19, 2016USD ($)$ / sharesshares | Feb. 09, 2016USD ($)$ / sharesshares | Sep. 04, 2015USD ($)$ / shares | Dec. 31, 2015USD ($)Numbershares | Sep. 25, 2015$ / shares | May 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($) |
Number of common shares granted | 47,800,000 | |||||||
Convertible Notes Payable [Member] | ||||||||
Debt face amount | $ | $ 174,000 | |||||||
Promissory Notes Payable [Member] | ||||||||
Debt face amount | $ | $ 383,347 | |||||||
Notes Payable [Member] | ||||||||
Debt face amount | $ | $ 1,165,675 | |||||||
Network 1 Financial Securities, Inc. [Member] | ||||||||
Number of shares issued | 9,946,667 | |||||||
Officers And Directors [Member] | Convertible Notes Payable [Member] | ||||||||
Debt face amount | $ | $ 150,000 | |||||||
Officers And Directors [Member] | Warrant [Member] | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.055 | |||||||
Letter Agreement [Member] | ID Solutions, Inc. [Member] | Warrant [Member] | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.15 | |||||||
Securities Purchase Agreement [Member] | Director [Member] | 12% Secured Convertible Debentures [Member] | ||||||||
Debt face amount | $ | $ 100,000 | |||||||
Securities Purchase Agreement [Member] | Director [Member] | Warrant [Member] | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.40 | |||||||
Securities Purchase Agreement [Member] | Director [Member] | Warrant [Member] | 12% Secured Convertible Debentures [Member] | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.40 | |||||||
Description of collateral | Secured by all assets of the Company. | |||||||
Subsequent Event [Member] | Cards Plus Pty Ltd. [Member] | ||||||||
Number of card produce per day | Number | 180,000 | |||||||
Revenues | $ | $ 2,000,000 | |||||||
Subsequent Event [Member] | Equity Compensation Plan [Member] | ||||||||
Number of common shares granted | 17,000,000 | |||||||
Amendment number of common shares granted | 50,800,000 | |||||||
Vesting period | The Plan Options contain vesting periods of 12 quarters commencing on October 1, 2016 as well as various vesting milestones. The Plan Options are exercisable for a period of ten years. Further, the Company amended existing stock options to acquire 50,800,000 shares of common stock under its Equity Compensation Plan to extend the term from five years to 10 years. | |||||||
Subsequent Event [Member] | Amended Agreement [Member] | Parity Labs LLC [Member] | ||||||||
Number of shares issued | 20,000,000 | |||||||
Exercise price (in dollars per share) | $ / shares | $ 0.05 | |||||||
Number of shares option vest | 10,000,000 | |||||||
Vesting term | 10 years | |||||||
Subsequent Event [Member] | Subscription Agreements [Member] | Network 1 Financial Securities, Inc. [Member] | ||||||||
Cancellation of common stock | 10,000,000 | |||||||
Cash fee | $ | $ 100,000 | |||||||
Number of shares issued | 2,000,000 | |||||||
Subsequent Event [Member] | Subscription Agreements [Member] | Several Accredited Investors (the "April 2016 Accredited Investors") [Member] | ||||||||
Number of shares issued | 25,000,000 | |||||||
Number of shares issued, value | $ | $ 1,250,000 | |||||||
Debt face amount | $ | $ 1,250,000 | |||||||
Subsequent Event [Member] | Letter Agreement [Member] | Accredited Investor [Member] | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.10 | |||||||
Description of conversion price | On August 10, 2016, the Company and the April 2016 Accredited Investors entered into a Letter Agreement whereby the conversion price of the Secured Convertible Debentures was reduced to $0.10 in consideration of the removal of certain price protection features in such Secured Convertible Debentures. | |||||||
Subsequent Event [Member] | Letter Agreement [Member] | Accredited Investor [Member] | Warrant [Member] | ||||||||
Number of stock exercisable | 15,500,000 | |||||||
Subsequent Event [Member] | Securities Purchase Agreements [Member] | Network 1 Financial Securities, Inc. [Member] | ||||||||
Cash fee | $ | $ 124,000 | |||||||
Number of shares issued | 496,000 | |||||||
Subsequent Event [Member] | Securities Purchase Agreements [Member] | Several Accredited Investors (the "April 2016 Accredited Investors") [Member] | ||||||||
Debt face amount | $ | $ 1,550,000 | |||||||
Subsequent Event [Member] | Securities Purchase Agreements [Member] | Several Accredited Investors (the "April 2016 Accredited Investors") [Member] | 12% Secured Convertible Debentures [Member] | ||||||||
Description of conversion price and offering amount | The exercise price shall be adjusted to equal the conversion price or the per share purchase price of Company's next offering in the minimum amount of $5,000,000 if such price is less than $0.25 (the "Adjustment Price"). | |||||||
Description of conversion price | The conversion price shall be adjusted to equal the Adjustment Price less a 20% discount if such Adjustment Price is less than $0.25 per share. | |||||||
Description of collateral | The Secured Convertible Debentures are secured by 18,235,295 issued and outstanding shares of common stock of the Company. | |||||||
Subsequent Event [Member] | Securities Purchase Agreements [Member] | Several Accredited Investors (the "April 2016 Accredited Investors") [Member] | Warrant [Member] | 12% Secured Convertible Debentures [Member] | ||||||||
Number of stock exercisable | 6,200,000 | |||||||
Term of warrant | 5 years | |||||||
Exercise price (in dollars per share) | $ / shares | $ 0.25 | |||||||
Percenatge of conversion or exercise | 4.99% | |||||||
Subsequent Event [Member] | Share Exchange Agreement [Member] | Fin Holdings, Inc. [Member] | ||||||||
Ownership percentage | 100.00% | |||||||
Number of shares issued | 22,500,000 | |||||||
Share price (in dollars per share) | $ / shares | $ 0.40 | |||||||
Number of shares issued, value | $ | $ 9,000,000 |
2015 QUARTERLY RESTATEMENTS (74
2015 QUARTERLY RESTATEMENTS (UNAUDITED) (Details) - USD ($) | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Condensed Consolidated Balance Sheet: | ||||||||
Cash | $ 349,873 | $ 159,296 | $ 5,349 | |||||
Other current assets | 134,224 | |||||||
Total current assets | 1,509,787 | 159,296 | ||||||
Property and Equipment, Net | 37,775 | 21,582 | ||||||
Other Assets | 319,592 | 174,387 | ||||||
Goodwill | 166,689 | |||||||
Intangible Assets | 1,436,534 | 421,774 | ||||||
Total Assets | 3,470,377 | 777,039 | ||||||
Accounts Payable and Accrued Expenses | 717,500 | 150,228 | ||||||
Related Party Payables | 60,200 | |||||||
Contingent Liability | 370,125 | |||||||
Note Payable - related parties | 48,417 | |||||||
Total Current Liabilities | 27,550,685 | 258,845 | ||||||
Stockholders' equity (deficit) | (24,080,308) | 518,194 | $ 257,206 | |||||
Total liabilities and stockholders" equity (deficit) | $ 3,470,377 | $ 777,039 | ||||||
As Previously Reported [Member] | ||||||||
Condensed Consolidated Balance Sheet: | ||||||||
Cash | $ 576,897 | $ 525,541 | $ 13,528 | |||||
Contingent asset | 87,941 | 149,848 | ||||||
Other current assets | 546,503 | 237,311 | ||||||
Total current assets | 1,211,341 | 912,700 | 13,528 | |||||
Property and Equipment, Net | 90,070 | 31,885 | 18,566 | |||||
Other Assets | 146,160 | 240,636 | 203,390 | |||||
Inventory | 174,838 | |||||||
Goodwill | 28,353 | |||||||
Intangible Assets | 1,694,687 | 1,425,728 | 418,052 | |||||
Total Assets | 3,345,449 | 2,610,949 | 653,536 | |||||
Accounts Payable and Accrued Expenses | 835,119 | 625,600 | 137,833 | |||||
Convertible Notes Payable - Net | 262,158 | [1] | 67,918 | |||||
Derivative liabilities | 26,514,647 | 4,530,375 | ||||||
Accounts Payable - related party | 90,650 | |||||||
Related Party Payables | 127,320 | 83,838 | ||||||
Contingent Liability | 87,941 | 149,848 | ||||||
Contingent Purchase Consideration | ||||||||
Convertible Debt | ||||||||
Note Payable - related parties | 150,000 | 234,190 | 243,887 | |||||
Promissory Note Payable | 151,902 | 199,718 | ||||||
Total Current Liabilities | 28,129,087 | 5,891,487 | 472,370 | |||||
Stockholders' equity (deficit) | (24,783,638) | (3,280,538) | 181,166 | |||||
Total liabilities and stockholders" equity (deficit) | 3,345,449 | 2,610,949 | 653,536 | |||||
Adjustments [Member] | ||||||||
Condensed Consolidated Balance Sheet: | ||||||||
Cash | ||||||||
Contingent asset | (87,941) | (149,848) | ||||||
Other current assets | ||||||||
Total current assets | (87,941) | (149,848) | ||||||
Property and Equipment, Net | ||||||||
Other Assets | ||||||||
Inventory | ||||||||
Goodwill | 138,336 | 166,689 | ||||||
Intangible Assets | (31,562) | 986 | (200,000) | |||||
Total Assets | 18,833 | 17,827 | (200,000) | |||||
Accounts Payable and Accrued Expenses | ||||||||
Convertible Notes Payable - Net | (121,655) | (13,584) | ||||||
Derivative liabilities | 1,545,232 | (907,123) | ||||||
Accounts Payable - related party | ||||||||
Related Party Payables | ||||||||
Contingent Liability | (87,941) | (149,848) | ||||||
Contingent Purchase Consideration | 370,125 | 370,125 | ||||||
Convertible Debt | 159,357 | |||||||
Note Payable - related parties | (150,000) | |||||||
Promissory Note Payable | ||||||||
Total Current Liabilities | 1,715,118 | (700,430) | ||||||
Stockholders' equity (deficit) | (1,696,285) | 718,257 | (200,000) | |||||
Total liabilities and stockholders" equity (deficit) | 18,833 | 17,827 | (200,000) | |||||
As Restated [Member] | ||||||||
Condensed Consolidated Balance Sheet: | ||||||||
Cash | 576,897 | 525,541 | 13,528 | |||||
Contingent asset | ||||||||
Other current assets | 546,503 | 237,311 | ||||||
Total current assets | 1,123,400 | 762,852 | 13,528 | |||||
Property and Equipment, Net | 90,070 | 31,885 | 18,566 | |||||
Other Assets | 146,160 | 240,636 | 203,390 | |||||
Inventory | 174,838 | |||||||
Goodwill | 166,689 | 166,689 | ||||||
Intangible Assets | 1,663,125 | 1,426,714 | 218,052 | |||||
Total Assets | 3,364,282 | 2,628,776 | 453,536 | |||||
Accounts Payable and Accrued Expenses | 835,119 | 625,600 | 137,833 | |||||
Convertible Notes Payable - Net | 103,175 | 54,334 | ||||||
Derivative liabilities | 28,059,879 | 3,623,252 | ||||||
Accounts Payable - related party | 90,650 | |||||||
Related Party Payables | 127,320 | 83,838 | ||||||
Contingent Liability | ||||||||
Contingent Purchase Consideration | 370,125 | 370,125 | ||||||
Convertible Debt | 348,587 | |||||||
Note Payable - related parties | 234,190 | 243,887 | ||||||
Promissory Note Payable | 199,718 | |||||||
Total Current Liabilities | 29,844,205 | 5,191,057 | 472,370 | |||||
Stockholders' equity (deficit) | (26,479,923) | (2,562,281) | (18,834) | |||||
Total liabilities and stockholders" equity (deficit) | 3,364,282 | $ 2,628,776 | $ 453,536 | |||||
Reclassifications [Member] | ||||||||
Condensed Consolidated Balance Sheet: | ||||||||
Cash | ||||||||
Contingent asset | ||||||||
Other current assets | ||||||||
Total current assets | ||||||||
Property and Equipment, Net | ||||||||
Other Assets | ||||||||
Inventory | ||||||||
Goodwill | ||||||||
Intangible Assets | ||||||||
Total Assets | ||||||||
Accounts Payable and Accrued Expenses | ||||||||
Convertible Notes Payable - Net | (37,328) | |||||||
Derivative liabilities | ||||||||
Related Party Payables | ||||||||
Contingent Liability | ||||||||
Contingent Purchase Consideration | ||||||||
Convertible Debt | 189,230 | |||||||
Note Payable - related parties | ||||||||
Promissory Note Payable | (151,902) | |||||||
Total Current Liabilities | ||||||||
Stockholders' equity (deficit) | ||||||||
Total liabilities and stockholders" equity (deficit) | ||||||||
As Reclassified [Member] | ||||||||
Condensed Consolidated Balance Sheet: | ||||||||
Cash | 576,897 | |||||||
Contingent asset | [2] | 87,941 | ||||||
Other current assets | 546,503 | |||||||
Total current assets | 1,211,341 | |||||||
Property and Equipment, Net | 90,070 | |||||||
Other Assets | 146,160 | |||||||
Inventory | 174,838 | |||||||
Goodwill | [2] | 28,353 | ||||||
Intangible Assets | [2],[3] | 1,694,687 | ||||||
Total Assets | 3,345,449 | |||||||
Accounts Payable and Accrued Expenses | 835,119 | |||||||
Convertible Notes Payable - Net | [4] | 224,830 | ||||||
Derivative liabilities | [4] | 26,514,647 | ||||||
Related Party Payables | 127,320 | |||||||
Contingent Liability | [2] | 87,941 | ||||||
Contingent Purchase Consideration | [2] | |||||||
Convertible Debt | [4] | 189,230 | ||||||
Note Payable - related parties | [4] | 150,000 | ||||||
Promissory Note Payable | ||||||||
Total Current Liabilities | 28,129,087 | |||||||
Stockholders' equity (deficit) | (24,783,638) | |||||||
Total liabilities and stockholders" equity (deficit) | $ 3,345,449 | |||||||
[1] | Reclassifications. During the preparation of its consolidated financial statements for the year ended December 31, 2015, the Company changed or renamed the classification/description of certain accounts and related amounts. Accordingly, certain of the previously stated classifications/descriptions and related amounts required adjustment. As of September 30, 2015, and for the three and nine months then ended, the reclassifications and description changes relate to general and administrative and interest expense associated with the recording of the Debt Discount amortization and stock-based compensation expense and to reclassification from convertible notes payable to notes payable for those notes for which only the accrued interest is convertible. | |||||||
[2] | Fair Value of Intangible Assets In Connection with Business Acquisition. During the three months ended June 30, 2015, the Company accounted for the acquisition of Multipay (see Note 7) as a business combination using the acquisition method of accounting utilizing an incorrect valuation. The adjustment to reflect the correct valuation, including the purchase price allocation of assets acquired, resulted in an increase of $138,336 to Goodwill, $168,438 to Intangible Assets (net of additional amortization) and $370,125 to Contingent Purchase Consideration as of September 30, 2015. In addition, certain previously reported contingent assets and liabilities of $87,941 were eliminated. The increase to Intangible Assets required an increase in previously reported amortization expense by $32,549 and $65,098 for the three and nine months ended September 30, 2015, respectively. | |||||||
[3] | Intangible Assets-Capitalized Software. As previously discussed, related to the quarter ended March 31, 2015, the Company determined that previously capitalized software should have been expensed in accordance with US GAAP. Accordingly, a reduction of $200,000 to Intangible Assets and an increase to Research and Development Expenses is made as of and for the nine months ended September 30, 2015. The net decrease to Intangible Assets, after considering the increase of $168,438 related to the Multipay acquisition in (1) above and the reduction due to the internal use software incorrectly being capitalized of $200,000 is $31,562 as of September 30, 2015. | |||||||
[4] | Derivative Liability. As described in Notes 9 and 10, at December 31, 2015, the fair value of derivative liabilities related to convertible and other notes payable, have now been estimated based on the Monte Carlo Simulation Model because it considers the effect of the down round feature (probability of a triggering capital raise) along with the other assumptions associated with the Black-Scholes option pricing model. The previously used methodology by the Company incorrectly did not take into consideration the probability of a financing at a price that would trigger the instruments down round provision. The adjusted fair value of the Company's derivatives associated with its Convertible Notes and other Notes Payable resulted in an increase of $1,545,232 to the Derivative Liability as of September 30, 2015. For the three and nine months ended September 30, 2015, the Company's derivative expense is increased by $3,767,837 and $6,132,939, respectively. In addition, the finalized fair value analysis of the Company's embedded derivatives associated with its Convertible and other Notes Payable required a reduction to the previously recorded Debt Discount which resulted in an increase (decrease) of interest expense of $11,919 and $(28,667) for the three and nine months ended September 30, 2015, respectively. The adjusted fair value analysis for the derivatives required a decrease to Convertible Notes Payable of $271,655 and an increase to Notes Payable of $159,357 as of September 30, 2015. |
2015 QUARTERLY RESTATEMENTS (75
2015 QUARTERLY RESTATEMENTS (UNAUDITED) (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |||||
Operating Expenses: | |||||||||||
Depreciation and amortization | $ 147,052 | $ 148,841 | |||||||||
Research and development | 480,789 | 1,500 | |||||||||
General and administrative | 9,003,143 | 717,505 | |||||||||
Total operating expenses | 9,630,984 | 767,846 | |||||||||
Loss from operations | (8,895,620) | (767,846) | |||||||||
Derivative expense | (3,832,920) | ||||||||||
Amortizaton of debt discounts | (832,775) | ||||||||||
Interest expense | (1,136,528) | (65,225) | |||||||||
Net loss | $ (36,679,169) | $ (904,687) | |||||||||
Net loss per share: Basic and diluted (in dollars per share) | $ (0.21) | $ (0.01) | |||||||||
As Previously Reported [Member] | |||||||||||
Condensed Consolidated Statements of Operations: | |||||||||||
Revenue | $ 75,312 | $ 11,046 | $ 11,046 | $ 86,358 | |||||||
Operating Expenses: | |||||||||||
Depreciation and amortization | 10,135 | 11,469 | $ 11,271 | 22,740 | 34,312 | ||||||
Research and development | 853 | 24,000 | 24,853 | 24,853 | |||||||
General and administrative | 840,199 | 570,622 | 472,836 | 1,043,459 | [1] | 1,817,906 | |||||
Total operating expenses | 850,334 | 582,944 | 508,107 | 1,091,052 | 1,877,071 | ||||||
Loss from operations | (775,022) | (571,898) | (508,107) | (1,080,006) | (1,790,713) | ||||||
Derivative expense | (20,478,790) | (3,680,374) | (3,680,374) | (20,979,041) | |||||||
Stock compensation expense | (4,849,740) | (4,849,740) | |||||||||
Financing Costs of debentures | (1,357,917) | (4,538,040) | |||||||||
Amortizaton of debt discounts | (358,705) | (421,524) | |||||||||
Interest expense | (98,166) | (11,741) | (1,755) | (13,496) | [1] | (112,304) | |||||
Other income | 9,315 | 9,315 | |||||||||
Translation loss | (26,259) | (26,259) | |||||||||
Net loss | $ (27,909,025) | $ (4,290,272) | $ (509,862) | $ (4,800,135) | $ (32,682,047) | ||||||
Net loss per share: Basic and diluted (in dollars per share) | $ (0.16) | $ (0.03) | $ 0 | $ (0.03) | $ (0.19) | ||||||
Adjustments [Member] | |||||||||||
Condensed Consolidated Statements of Operations: | |||||||||||
Revenue | |||||||||||
Operating Expenses: | |||||||||||
Depreciation and amortization | 32,549 | 32,549 | 32,549 | 65,098 | |||||||
Research and development | 200,000 | 200,000 | 200,000 | ||||||||
General and administrative | (1,957,052) | (46,344) | (46,344) | (2,003,395) | |||||||
Total operating expenses | (1,924,503) | (13,795) | 200,000 | 186,205 | (1,738,297) | ||||||
Loss from operations | 1,924,503 | 13,795 | (200,000) | (186,205) | 1,738,297 | ||||||
Derivative expense | (3,767,837) | 815,021 | 815,021 | (6,132,939) | |||||||
Stock compensation expense | |||||||||||
Financing Costs of debentures | 1,357,917 | 4,538,040 | |||||||||
Amortizaton of debt discounts | |||||||||||
Interest expense | (11,919) | 45,685 | 45,685 | 28,667 | |||||||
Other income | |||||||||||
Translation loss | |||||||||||
Net loss | $ (497,336) | $ 874,501 | $ (200,000) | $ 674,501 | $ 172,065 | ||||||
Net loss per share: Basic and diluted (in dollars per share) | $ 0 | $ 0.01 | $ 0 | $ 0.01 | $ 0 | ||||||
As Restated [Member] | |||||||||||
Condensed Consolidated Statements of Operations: | |||||||||||
Revenue | $ 75,312 | $ 11,046 | $ 11,046 | $ 86,358 | |||||||
Operating Expenses: | |||||||||||
Depreciation and amortization | 42,684 | 44,018 | $ 11,271 | 55,289 | 99,410 | ||||||
Research and development | 853 | 224,000 | 224,853 | 224,853 | |||||||
General and administrative | 3,732,887 | 456,360 | 472,836 | 929,197 | 4,664,251 | ||||||
Total operating expenses | 3,775,571 | 501,231 | 708,107 | 1,209,339 | 4,988,514 | ||||||
Loss from operations | (3,700,259) | (490,185) | (708,107) | (1,198,293) | (4,902,156) | ||||||
Derivative expense | (24,246,627) | (2,865,353) | (2,865,353) | (27,111,980) | |||||||
Stock compensation expense | |||||||||||
Financing Costs of debentures | |||||||||||
Amortizaton of debt discounts | |||||||||||
Interest expense | (468,790) | (33,974) | (1,755) | (35,729) | (505,161) | ||||||
Other income | 9,315 | 9,315 | |||||||||
Translation loss | (26,259) | (26,259) | |||||||||
Net loss | $ (28,406,361) | $ (3,415,771) | $ (709,862) | $ (4,125,634) | $ (32,509,982) | ||||||
Net loss per share: Basic and diluted (in dollars per share) | $ (0.17) | $ (0.02) | $ 0 | $ (0.02) | $ (0.19) | ||||||
Reclassifications [Member] | |||||||||||
Condensed Consolidated Statements of Operations: | |||||||||||
Revenue | |||||||||||
Operating Expenses: | |||||||||||
Depreciation and amortization | |||||||||||
Research and development | |||||||||||
General and administrative | 4,849,740 | (67,918) | (67,918) | 4,849,740 | |||||||
Total operating expenses | 4,849,740 | (67,918) | (67,918) | 4,849,740 | |||||||
Loss from operations | (4,849,740) | 67,918 | 67,918 | (4,849,740) | |||||||
Derivative expense | |||||||||||
Stock compensation expense | 4,849,740 | 4,849,740 | |||||||||
Financing Costs of debentures | |||||||||||
Amortizaton of debt discounts | 358,705 | 421,524 | |||||||||
Interest expense | (358,705) | (67,918) | (67,918) | (421,524) | |||||||
Other income | |||||||||||
Translation loss | |||||||||||
Net loss | |||||||||||
Net loss per share: Basic and diluted (in dollars per share) | |||||||||||
As Reclassified [Member] | |||||||||||
Condensed Consolidated Statements of Operations: | |||||||||||
Revenue | $ 75,312 | $ 11,046 | $ 11,046 | $ 86,358 | |||||||
Operating Expenses: | |||||||||||
Depreciation and amortization | 10,135 | [2] | 11,469 | [3] | 22,740 | [3] | 34,312 | [2] | |||
Research and development | 853 | 24,853 | [4] | 24,853 | [5] | ||||||
General and administrative | 5,689,939 | [6],[7] | 502,704 | [8],[9] | 975,541 | [8],[9] | 6,667,646 | [6],[7] | |||
Total operating expenses | 5,700,074 | 515,026 | 1,023,134 | 6,726,811 | |||||||
Loss from operations | (5,624,762) | (503,980) | (1,012,088) | (6,640,453) | |||||||
Derivative expense | (20,478,790) | [10] | (3,680,374) | [11] | (3,680,374) | [11] | (20,979,041) | [10] | |||
Stock compensation expense | |||||||||||
Financing Costs of debentures | (1,357,917) | (4,538,040) | |||||||||
Amortizaton of debt discounts | |||||||||||
Interest expense | (456,871) | [10] | (79,659) | [11] | (81,414) | [11] | (533,828) | [10] | |||
Other income | 9,315 | 9,315 | |||||||||
Translation loss | (26,259) | (26,259) | |||||||||
Net loss | $ (27,909,025) | $ (4,290,272) | $ (4,800,135) | $ (32,682,047) | |||||||
Net loss per share: Basic and diluted (in dollars per share) | $ (0.16) | $ (0.03) | $ (0.03) | $ (0.19) | |||||||
[1] | Reclassifications. During the preparation of its consolidated financial statements for the year ended December 31, 2015, the Company changed or renamed the classification/description of certain accounts and related amounts. Accordingly, certain of the previously stated classifications/descriptions and related amounts required adjustment for the three and six months ended June 30, 2015. The reclassifications and description changes relate to General and Administrative and Interest expenses associated with the recording of the Debt Discount amortization. | ||||||||||
[2] | Fair Value of Intangible Assets In Connection with Business Acquisition. During the three months ended June 30, 2015, the Company accounted for the acquisition of Multipay (see Note 7) as a business combination using the acquisition method of accounting utilizing an incorrect valuation. The adjustment to reflect the correct valuation, including the purchase price allocation of assets acquired, resulted in an increase of $138,336 to Goodwill, $168,438 to Intangible Assets (net of additional amortization) and $370,125 to Contingent Purchase Consideration as of September 30, 2015. In addition, certain previously reported contingent assets and liabilities of $87,941 were eliminated. The increase to Intangible Assets required an increase in previously reported amortization expense by $32,549 and $65,098 for the three and nine months ended September 30, 2015, respectively. | ||||||||||
[3] | Fair Value of Intangible Assets In Connection with Business Acquisition. During the three months ended June 30, 2015, the Company accounted for the acquisition of Multipay (see Note 7) as a business combination using the acquisition method of accounting utilizing an incorrect valuation. The adjustment to reflect the correct valuation, including the purchase price allocation of assets acquired, resulted in an increase of $166,689 to Goodwill, $200,986 to Intangible Assets (net of $32,549 additional amortization) and $370,125 to Contingent Purchase Consideration as of June 30, 2015. In addition, certain previously reported contingent assets and liabilities of $149,848 were eliminated. | ||||||||||
[4] | Intangible Assets-Capitalized Software. As previously discussed, related to the quarter ended March 31, 2015, the Company determined that previously capitalized software should have been expensed in accordance with US GAAP. Accordingly, a reduction of $200,000 to Intangible Assets and an increase to Research and Development Expenses is made as of and for the six months ended June 30, 2015. The net increase to Intangible Assets, after considering the increase of $200,986 related to the Multipay acquisition in (1) above and the reduction due to the software incorrectly being capitalized of $200,000 is $986 as of June 30, 2015. | ||||||||||
[5] | Intangible Assets-Capitalized Software. As previously discussed, related to the quarter ended March 31, 2015, the Company determined that previously capitalized software should have been expensed in accordance with US GAAP. Accordingly, a reduction of $200,000 to Intangible Assets and an increase to Research and Development Expenses is made as of and for the nine months ended September 30, 2015. The net decrease to Intangible Assets, after considering the increase of $168,438 related to the Multipay acquisition in (1) above and the reduction due to the internal use software incorrectly being capitalized of $200,000 is $31,562 as of September 30, 2015. | ||||||||||
[6] | Debt Issuance Costs. The capitalization of debt issuance costs resulted in a reduction to convertible notes payable of and a corresponding decrease general and administrative of $226,700 and $286,700 for the three and nine months ended September 30, 2015, respectively. The net decrease to General and Administrative expenses, after considering the decrease of $1,730,352 and $1,716,695 related to stock-based compensation in (4) above and the capitalization of debt issuance costs of $226,700 and $286,700 is $1,957,052 and $2,003,395 for the three and nine months ended September 30, 2015, respectively. | ||||||||||
[7] | Stock-Based Compensation. The adjusted fair value analysis of the Company's stock-based compensation resulted in a decrease to general and administrative expenses of $1,730,352 and $1,716,695 for the three and nine months ended September 30, 2015, respectively. | ||||||||||
[8] | Debt Issuance Costs. The capitalization of debt issuance costs as a reduction of the debt principal resulted in a reduction to convertible notes payable of $60,000 and a corresponding decrease to general and administrative for the three and six months ended June 30, 2015. The decrease to General and Administrative expenses, after considering the increase of $13,656 related to stock-based compensation in (4) above and the capitalization of debt issuance costs of $60,000 is $46,344 for the three and six months ended June 30, 2015. | ||||||||||
[9] | Stock-Based Compensation. The adjusted fair value of the Company's stock-based compensation resulted in an increase to general and administrative expenses of $13,656 for the three and six months ended June 30, 2015. | ||||||||||
[10] | Derivative Liability. As described in Notes 9 and 10, at December 31, 2015, the fair value of derivative liabilities related to convertible and other notes payable, have now been estimated based on the Monte Carlo Simulation Model because it considers the effect of the down round feature (probability of a triggering capital raise) along with the other assumptions associated with the Black-Scholes option pricing model. The previously used methodology by the Company incorrectly did not take into consideration the probability of a financing at a price that would trigger the instruments down round provision. The adjusted fair value of the Company's derivatives associated with its Convertible Notes and other Notes Payable resulted in an increase of $1,545,232 to the Derivative Liability as of September 30, 2015. For the three and nine months ended September 30, 2015, the Company's derivative expense is increased by $3,767,837 and $6,132,939, respectively. In addition, the finalized fair value analysis of the Company's embedded derivatives associated with its Convertible and other Notes Payable required a reduction to the previously recorded Debt Discount which resulted in an increase (decrease) of interest expense of $11,919 and $(28,667) for the three and nine months ended September 30, 2015, respectively. The adjusted fair value analysis for the derivatives required a decrease to Convertible Notes Payable of $271,655 and an increase to Notes Payable of $159,357 as of September 30, 2015. | ||||||||||
[11] | Derivative Liability. As described in Notes 9 and 10, at December 31, 2015, the fair value of the derivative liabilities related to convertible and other notes payable have now been estimated based on the Monte Carlo Simulation Model because it considers the effect of the down round feature (probability of a triggering capital raise) along with the other assumptions associated with the Black-Scholes option pricing model. The previously used methodology by the Company incorrectly did not take into consideration the probability of a financing at a price that would trigger the instruments down round provision. The adjusted fair value of the Company's derivatives associated with its Convertible and other Notes Payable resulted in a decrease of $907,123 to the Derivative Liability as of June 30, 2015. For the three and six months ended June 30, 2015, the Company's derivative expense is reduced by $815,021. In addition, the finalized fair value analysis of the Company's derivatives associated with its Convertible and other Notes Payable required a reduction to the previously recorded Debt Discount and interest expense by $45,685 for the three and six months ended June 30, 2015. |
2015 QUARTERLY RESTATEMENTS (76
2015 QUARTERLY RESTATEMENTS (UNAUDITED) (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Intangible Assets | $ 1,436,534 | $ 421,774 | |||||
Additional amortization | $ (208,150) | $ (81,169) | |||||
Adjustments [Member] | |||||||
Intangible Assets | $ (31,562) | $ 986 | $ 986 | $ (31,562) | $ (200,000) | ||
Adjustments [Member] | Multipay S.A., a Colombian Corporation [Member] | |||||||
Intangible Assets | 168,437 | 200,986 | 200,986 | 168,437 | |||
Additional amortization | 32,549 | 32,549 | |||||
General and Administrative Expense [Member] | |||||||
Debt issuance costs | 226,700 | 60,000 | 60,000 | 286,700 | |||
Allocated stock based compensation | $ 1,730,352 | $ 13,656 | $ 13,656 | $ 1,716,695 |