authID (AUID) 10-Q 7 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Document And Entity Information
Entity Registrant Name	Ipsidy Inc.
Entity Central Index Key	1,534,154
Document Type	10-Q
Trading Symbol	IDTY
Document Period End Date	Jun. 30, 2018
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 Common Stock, Shares Outstanding		412,344,956
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets:
Cash	$ 1,312,667	$ 4,413,822
Accounts receivable, net	775,730	165,929
Current portion of net investment in direct financing lease	55,679	52,790
Inventory	167,649	492,030
Other current assets	481,702	218,537
Total current assets	2,793,427	5,343,108
Property and equipment, net	190,218	209,719
Other Assets	1,610,996	1,243,531
Intangible Assets, net	2,711,129	2,878,080
Goodwill	6,736,043	6,736,043
Net investment in direct financing lease, net of current portion	590,182	618,763
Total assets	14,631,995	17,029,244
Current Liabilities:
Accounts payable and accrued expenses	1,944,356	1,447,185
Capital lease obligation, current portion	29,107	27,420
Deferred revenue	657,945	122,511
Total current liabilities	2,631,408	1,597,116
Long-term liabilities:
Notes payable, net	2,698,834	2,375,720
Capital lease obligation, net of current portion	100,521	115,509
Total liabilities	5,430,763	4,088,345
Stockholders' Equity:
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 412,344,956 and 403,311,988 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively	41,234	40,331
Additional paid in capital	80,541,473	79,053,339
Accumulated deficit	(71,633,597)	(66,407,622)
Accumulated comprehensive income	252,122	254,851
Total stockholders' equity	9,201,232	12,940,899
Total liabilities and stockholders' equity	$ 14,631,995	$ 17,029,244

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized	1,000,000,000	1,000,000,000
Common stock, issued	412,344,956	403,311,988
Common stock, outstanding	412,344,956	403,311,988

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue:
Products and services	$ 1,821,807	$ 540,616	$ 2,329,734	$ 1,106,161
Lease income	17,520	18,836	35,382	37,980
Total revenues, net	1,839,327	559,452	2,365,116	1,144,141
Operating Expenses:
Cost of Sales	743,709	155,141	863,957	304,270
General and administrative	3,256,150	2,749,355	6,055,153	8,000,567
Research and development	20,330	27,766	25,691	56,838
Depreciation and amortization	113,768	137,000	224,140	246,534
Total operating expenses	4,133,957	3,069,262	7,168,941	8,608,209
Loss from operations	(2,294,630)	(2,509,810)	(4,803,825)	(7,464,068)
Other Income (Expense):
Loss on derivative liability				(452,146)
Gain on extinguishment of note payable				2,802,234
Loss on modification of derivatives				(319,770)
Loss on modification of warrants				(158,327)
Loss on settlement of notes payable				(5,978,643)
Interest expense	(246,298)	(291,168)	(485,467)	(895,182)
Other income	77,734		77,734
Other (expense), net	(168,564)	(291,168)	(407,733)	(5,001,834)
Loss before income taxes	(2,463,194)	(2,800,978)	(5,211,558)	(12,465,902)
Income Taxes	(9,856)	(1,600)	(14,417)	(5,770)
Net Loss	$ (2,473,050)	$ (2,802,578)	$ (5,225,975)	$ (12,471,672)
Net Loss per share - Basic (in dollars per share)	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.04)
Net Loss per share - Diluted (in dollars per share)	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.04)
Weighted Average Shares Outstanding - Basic (in shares)	407,490,811	344,140,554	405,872,537	319,868,353
Weighted Average Shares Outstanding - Diluted (in shares)	407,490,811	344,140,554	405,872,537	319,868,353

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net loss	$ (2,473,050)	$ (2,802,578)	$ (5,225,975)	$ (12,471,672)
Foreign currency translation loss	(29,018)	(46,772)	(2,729)	(23,319)
Comprehensive loss	$ (2,502,068)	$ (2,849,350)	$ (5,228,704)	$ (12,494,991)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance, beginning at Dec. 31, 2017	$ 40,331	$ 79,053,339	$ (66,407,622)	$ 254,851	$ 12,940,899
Balance, beginning (in shares) at Dec. 31, 2017	403,311,988				403,311,988
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock issued for services	$ 347	148,124			$ 148,471
Restricted stock issued for services (in shares)	3,470,000
Common stock issued for services	$ 17	47,650			47,667
Common stock issued for services (in shares)	170,240
Stock-based compensation		1,292,900			1,292,900
Cashless exercise of common stock warrants	$ 350	(350)
Cashless exercise of common stock warrants (in shares)	3,498,943
Cashless exercise of common stock options	$ 112	(112)
Cashless exercise of common stock options (in shares)	1,122,233
Common stock issued for loan extension	$ 150	(150)
Common stock issued for loan extension (in shares)	1,500,000
Cancellation of shares in settlement of amounts due from Multipay	$ (73)	73
Cancellation of shares in settlement of amounts due from Multipay (in shares)	(728,448)
Net loss			(5,225,975)		(5,225,975)
Foreign currency translation				(2,729)	(2,729)
Balance, ending at Jun. 30, 2018	$ 41,234	$ 80,541,473	$ (71,633,597)	$ 252,122	$ 9,201,232
Balance, ending (in shares) at Jun. 30, 2018	412,344,956				412,344,956

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (5,225,975)	$ (12,471,672)
Adjustments to reconcile net loss with cash flows from operations:
Depreciation and amortization expense	224,140	246,534
Stock-based compensation	1,292,900	4,266,670
Stock issued for services	196,138	62,805
Inventory reserve	348,308
Amortization of debt discounts and issuance costs	323,114	648,996
Loss on derivative liability		452,146
Gain on settlement of notes payable		(2,802,234)
Loss on modification of derivatives		319,770
Loss on modification of warrants		158,327
Loss on settlement of debt		5,978,643
Changes in operating assets and liabilities:
Accounts receivable	(620,817)	(16,913)
Net investment in direct financing lease	25,692	23,094
Other current assets	(263,165)	(21,763)
Inventory	(41,435)	(705,579)
Accounts payable and accrued expenses	525,977	240,218
Deferred revenue	535,434	(277,992)
Net cash flows from operating activities	(2,679,689)	(3,898,950)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(15,690)	(8,194)
Investment in other assets	(389,767)	(536,184)
Net cash flows from investing activities	(405,457)	(544,378)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable and common stock		3,000,000
Proceeds from the sale of common stock		3,570,100
Payment of debt and equity issuance costs		(375,821)
Principal payments on notes payable		(44,599)
Principal payments on capital lease obligation	(14,988)	(9,904)
Net cash flows from financing activities	(14,988)	6,139,776
Effect of Foreign Currencies	(1,021)	(9,356)
Net Change in Cash	(3,101,155)	1,687,092
Cash, Beginning of the Period	4,413,822	689,105
Cash, End of the Period	1,312,667	2,376,197
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	8,247	6,418
Cash paid for income taxes	14,417	5,770
Non-cash Investing and Financing Activities:
Issuance of common stock for conversion of debt and accrued interest		21,609,673
Issuance of warrants for inventory costs		224,460
Reclassification of derivative liabilities upon removal of price protection in warrants		7,614,974
Acquisition of equipment pursuant to a capital		$ 163,407

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	NOTE 1 – BASIS OF PRESENTATION In the opinion of Management, the accompanying unaudited condensed consolidated financial statements are prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only of normal recurring accruals) which we considered as necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for future periods or the full year. The condensed consolidated financial statements include the accounts of Ipsidy Inc. and its wholly-owned subsidiaries MultiPay S.A.S., ID Global LATAM, IDGS S.A.S., ID Solutions, Inc., FIN Holdings Inc., Ipsidy Enterprises Limited, and Cards Plus Pty Ltd. (collectively the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. Going concern As of June 30, 2018, the Company had an accumulated deficit of approximately $71.6 million. For the six months ended June 30, 2018, the Company’s revenue aggregated approximately $2.4 million and the Company incurred a loss from operations of approximately $4.8 million. The reports of our independent registered public accounting firm on our consolidated financial statements for the years ended December 31, 2017 and 2016 contained an explanatory paragraph regarding our ability to continue as a going concern based upon our net losses. These unaudited condensed 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 Company’s current shareholders, the ability of the Company to obtain additional equity or debt financing to continue operations, the Company’s 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. There is no assurance that the Company will ever be profitable or be able to secure funding or generate sufficient revenues to sustain operations. As such, there is substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed 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. See Note 12 - Subsequent Events regarding the Company’s equity funding round in August 2018 with subscription agreements received for approximately $9.1 million. 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 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. The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the three months ended June 30, 2018 and 2017 because their effect was antidilutive: Security 2018 2017 Stock Options 105,950,000 106,050,000 Warrants 43,731,210 47,538,697 Total 149,681,210 153,588,669 Inventories Inventories of kiosks held by IDGS S.A.S are stated at the lower of cost (using the first-in, first-out method) or net realizable value. The kiosks provide electronic ticketing for transit systems. Inventory of plastic/ID cards, digital printing material, which are held by Cards Plus Pty Ltd., are at the lower of cost (using the average method) or market. The Plastic/ID cards and digital printing material are used to provide plastic loyal ID and other types of cards. Inventories at June 30, 2018 and December 31, 2017 consist of kiosks that were not placed into service which are held for sale at June 30, 2018 and cards inventory. As of June 30, 2018, the Company fully reserved the value of the kiosks down to estimated net realizable value of $0. Leases All leases are classified at the inception as direct finance leases or operating leases based on whether the lease transfers substantially all the risks and rewards of ownership. Leases that transfer to the lessee substantially all the risks and rewards incidental to ownership of the asset are classified as direct finance leases. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). Topic 606 supersedes the revenue recognition requirements in ASU Topic 605, Revenue Recognition (“Topic 605”), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which discusses the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. Collectively, we refer to Topic 606 and Subtopic 340-40 as the “new standard.” The new standard was adopted by the Company in our fiscal year beginning January 1, 2018. The two permitted transition methods under the new standard are the full retrospective method, in which the new standard would be applied to each prior reporting period presented and the cumulative effect of applying the new standard would be recognized at the earliest period shown, or the modified retrospective method, in which the cumulative effect of applying the new standard would be recognized at the date of initial application. Based on our assessment, the impact of the new standard on our operations in prior periods is not significant. The following is the Company’s revenue recognition policy determined by revenue stream for its significant revenue generating activities through June 30, 2018. Cards Plus - The Company recognizes revenue for the design and production of cards when products are shipped or services have been performed due to the short term nature of the contracts. Payment Processing – The Company recognizes revenue for variable fees generated for payment processing solutions that are earned on a usage fee over time based on monthly transaction volumes or on a monthly flat fee rate. Additionally, the Company also sells certain equipment from time to time for which revenue is recognized upon delivery to the customer. Identity Solutions Software – The Company recognizes revenue based on the identified performance obligations over the performance period for fixed consideration and for variable fees generated that are earned on a usage fee based over time based on monthly transaction volumes or on a monthly flat fee rate. The Company had a deferred revenue contract liability of approximately $658,000 and $123,000 as of June 30, 2018 and December 31, 2017 for certain revenue that will be earned in future periods. The $123,000 of deferred revenue contract liability as of December 31, 2017 was earned in the six months ended June 30, 2018. The deferred revenue relates to the service period of support services for two customers. As of June 30, 2018 majority of the deferred revenue contract liability will be recognized over the next three quarters. We have allocated the selling price in the contract to one customer which has multiple performance obligations based on the contract selling price that we believe represents a fair market price for the service rendered. During the six months ended June 30, 2018, the Company had revenues from operations in North American, South America and Africa was $1.5 million, $0.2 million and $0.7 million respectively compared to $0.3 million, $0.2 million, $0.6 million in the six months ended June 30, 2017 respectively. In 2018, the Company introduced its new transaction platform and products as well as its pay for performance plan for both internal and external salesforce, that is based on a percentage of the benefit derived by the Company. For the three and six months ended June 30, 2018, no revenues associated with these new platforms were recognized or required to be recognized as the services have not yet commenced. The requirements under the new standard may impact future revenue and expenses recognition. One impact could be the accounting related to the capitalization and deferral of incremental commission and other costs of obtaining new contracts. We will defer direct and incremental commission as well as costs to obtain a contract and amortize those costs over the term of the related contract. As of June 30, 2018, there was a deferred commission of approximately $37,000 related to future delivery of an identity solutions system and services. We will review each new contract for the related performance obligations and related revenue and expense recognition implications. We expect that the revenues derived from the new product offerings could include multiple performance obligations. A performance obligation under the new revenue standard is defined as a promise to provide a “distinct” good or service to a customer. The Company has determined that one possible treatment under the new standard is that these services will represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Further, the Company has determined that the performance obligation to provide account access and facilitate transactions may meet the criteria for the “as invoiced” practical expedient, in that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. As a result, the Company anticipates it may recognize revenue in the amount to which the Company has a right to invoice, based on completed performance at the relevant date. Additionally, the contracts could include implementation services, or support on an “as needed” basis and we will review each contract and determine whether such performance obligations are separate and distinct and apply the new standard accordingly to the revenue and expense derived from or related to each such service. Additionally, the Company will capitalize the incremental costs of acquiring and fulfilling a contract with a customer if the Company expects to recover those costs. The incremental costs of acquiring and fulfilling a contract are those that the Company incurs to acquire and fulfill a contract with a customer that it would not have incurred if the contract had not been acquired (for example, a sales commission or specific incremental costs associated with the contract). The Company capitalizes the costs incurred to acquire and fulfill a contract only if those costs meet all the following criteria: a. The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. b. The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. c. The costs are expected to be recovered. The Company will capitalize contract acquisition and fulfillment costs related to signing or renewing contracts that meet the above criteria, which will be classified as contract cost assets in the Company’s Consolidated Balance Sheets. Contract cost assets will be amortized using the straight-line method over the expected period of benefit beginning at the time revenue begins to be realized. The amortization of contract fulfillment cost assets associated with facilitating transactions will be recorded as cost of services in the Company’s Consolidated Statements of Operations. The amortization of contract acquisition cost assets associated with sales commissions that qualify for capitalization will be recorded as selling, general and administrative expense in the Company’s Consolidated Statements of Operations. As of June 30, 2018, the Company had deferred contract costs, represented by contract cost assets of approximately $22,000 which are included in other currents assets for certain costs incurred for the future delivery of a biometric identity system and services. The performance obligation was principally met in the second quarter of 2018. Accordingly, the direct costs and the associated revenue were recognized in the second quarter of 2018. Revenue related to direct financing leases is outside the scope of Topic 606 and is recognized over the term of the lease using the effective interest method.

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET	6 Months Ended
	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT, NET	NOTE 2 – PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following as of June 30, 2018 and December 31, 2017: 2018 2017 Computers and equipment $ 195,041 $ 179,351 Furniture and fixtures 156,867 156,867 351,908 $ 336,218 Less Accumulated depreciation 161,690 126,499 Property and equipment, net $ 190,218 $ 209,719 Depreciation expense totaled $35,191 and $35,920 for the six months ended June 30, 2018 and 2017, respectively.

OTHER ASSETS

OTHER ASSETS	6 Months Ended
	Jun. 30, 2018
Other Assets [Abstract]
OTHER ASSETS	NOTE 3 – OTHER ASSETS The Company’s other assets consist of software being developed for new product offerings that have not been placed into service. Other assets consisted of the following at June 30, 2018 and December 31, 2017: June 30, December 31, Software and development $ 1,588,868 $ 1,139,409 Other 22,128 104,122 $ 1,610,996 $ 1,243,531

INTANGIBLE ASSETS, NET (OTHER T

INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL)	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL)	NOTE 4 – INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) The Company’s intangible assets consist of intellectual property acquired from MultiPay and FIN and are amortized over their estimated useful lives as indicated below. The following is a summary of activity related to intangible assets for the six months ended June 30, 2018: Customer Intellectual Non-Compete Patents Useful Lives 10 Years 10 Years 10 Years n/a Total Carrying Value at December 31, 2017 $ 1,287,450 $ 1,556,934 $ 5,250 $ 28,446 $ 2,878,080 Additions — — — 22,302 22,302 Amortization (79,358 ) (108,182 ) (1,409 ) — (188,949 ) Carrying Value at June 30, 2018 $ 1,208,092 $ 1,448,752 $ 3,841 $ 50,748 $ 2,711,129 The following is a summary of intangible assets as of June 30, 2018: Customer Intellectual Non-Compete Patent Total Cost $ 1,587,159 $ 2,146,561 $ 14,087 $ 50,444 $ 3,798,251 Accumulated amortization (379,067 ) (697,809 ) (10,246 ) — (1,087,122 ) Carrying Value at June 30, 2018 $ 1,208,092 $ 1,448,752 $ 3,841 $ 50,444 $ 2,711,129 Future expected amortization of intangible assets is as follows: Fiscal Year Ending December 31, Remainder of 2018 $ 188,949 2019 377,512 2020 370,573 2021 368,758 2022 359,268 Thereafter 1,046,069 $ 2,711,129

ACCOUNTS PAYABLE AND ACCRUED EX

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	6 Months Ended
	Jun. 30, 2018
Payables and Accruals [Abstract]
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following as of June 30, 2018 and December 31, 2017: 2018 2017 Trade payables $ 299,524 $ 232,842 Accrued interest 425,000 275,000 Accrued payroll and related obligations 809,613 468,012 Other accrued expenses 410,219 471,331 Total $ 1,944,356 $ 1,447,185

NOTES PAYABLE, NET

NOTES PAYABLE, NET	6 Months Ended
	Jun. 30, 2018
Debt Disclosure [Abstract]
NOTES PAYABLE, NET	NOTE 6 - NOTES PAYABLE, NET The following is a summary of notes payable as of June 30, 2018 and December 31, 2017: June 30, December 31, In January 2017, the Company issued a Senior Unsecured Note (“Note”) a face value of $3,000,000, payable two years from issuance, along with an aggregate of 4,500,000 shares of Common Stock, with a fair value of $1,147,500. The Company allocated the proceeds to the common stock based on their relative fair value and recorded a discount of $830,018 to be amortized into interest expense over the two-year term of the note. The Company also paid debt issuance costs consisting of a cash fee of $120,000 and 1,020,000 shares of common stock of the Company with a fair value of $306,000. On April 30, 2018, the Company and the Noteholder agreed to extend the due date of the note until April 30, 2020 for 1,500,000 shares of the Common Stock issued to the Noteholder. The April 2018 change in the terms of this note payable has been determined to be a debt extinguishment in accordance with ASC 470. The reported amounts under the debt extinguishment are not significantly different than that of the Company's reported amounts. 3,000,000 3,000,000 Total Principal Outstanding $ 3,000,000 $ 3,000,000 Unamortized Deferred Debt Discount (245,519 ) (168,345 ) Unamortized Deferred Debt Issuance Costs (55,647 ) (455,935 ) Notes Payable, Net $ 2,698,834 $ 2,375,720 Principal Balance Debt Debt Discounts Total Balance at December 31, 2017 $ 3,000,000 $ (168,345 ) $ (455,935 ) $ 2,375,720 Amortization — 112,698 210,416 323,114 Balance at June 30, 2018 $ 3,000,000 $ (55,647 ) $ (245,519 ) $ 2,698,834

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2018
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 7 – RELATED PARTY TRANSACTIONS Amount Due Officer and Director In November 2016, the Company issued a note payable for $13,609 to one if its Board of Directors and was outstanding at March 31, 2017. The note was repaid in April 2017. Notes Payable In January 2017, the Company issued to the Theodore Stern Revocable Trust (the “Stern Trust”) a Senior Unsecured Note with a face value of $3,000,000, payable over two years from issuance along with an aggregate of 4,500,000 shares of Common Stock with a fair value of $1,147,500 (Note 6). Theodore Stern, a director of the Company, is the trustee of the Stern Trust. During the three and six months ended June 30, 2018, the Company recorded $75,000 and $150,000 of interest expense under the terms and conditions of the Note. Additionally, the Company and the Stern Trust agreed to extend the due date of the note until April 30, 2020 for an extension fee of 1,500,000 shares of Common Stock at a fair market value of $420,000. See Note 12 - Subsequent Events regarding the partial pre-payment of the Senior Unsecured Note in August 2018.

STOCKHOLDER'S EQUITY

STOCKHOLDER'S EQUITY	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
STOCKHOLDER'S EQUITY	NOTE 8 STOCKHOLDER’S EQUITY Common Stock During the six months ended June 30, 2018, the Company granted 720,000 shares of restricted stock to the non-employee Directors in connection with their compensation to serve as Board Members. The shares were valued at the fair value at the date of grant and vest quarterly. Additionally, during the six months ended June 30, 2018, the Company granted 2,750,000 shares of restricted stock to employees of which 2,000,000 will be vested upon achieving certain performance criteria and 750,000 will vest over a three-year period. The Company also issued 170,240 shares of common stock to a service provider in satisfaction of $32,213 due for services. During the six months ended June 30, 2018, investors exercised 4,433,333 warrants at an average price of $0.05 cents per share on a cashless exercise basis in exchange for shares of common stock of the Company. During the six months ended June 30, 2018, the Company cancelled 728,448 shares of common stock in settlement of amounts due from the Multipay acquisition. Warrants The following is a summary of the Company’s warrant activity for the six months ended June 30, 2018: Number of Weighted Weighted Outstanding at December 31,2017 48,164,543 $ 0.08 2.9 Years Exercised (4,433,333 ) $ 0.05 — Outstanding at June 30, 2018 43,731,210 $ 0.08 2.4 Years Stock Options During the six months ended June 30, 2018, the Company granted options to acquire 5,250,000 shares of common stock to five employees and one non-employee of which 3,250,000 options are exercisable at an average price of $0.22 per share and 2,000,000 are exercisable at $0.25 per share. The options have a term of ten years, were granted at fair market value at the date of grant .and vest over three years. The grant date fair value of the options totaled approximately $792,000, which will be charged to expense over the three-year vesting term of which approximately $231,000 was related to non-employees. The Company determined the grant date fair value of the options granted during the three months ended June 30, 2018 using the Black Scholes Method and the following assumptions: Expected Volatility – 77-78% Expected Term – 6.5 Years Risk Free Rate – 2.4-2.7% Dividend Rate – 0.00% Activity related to stock options for the three months ended June 30, 2018 is summarized as follows: Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Outstanding as of December 31, 2017 103,208,331 $ 0.19 8.3 $ 11,457,291 Granted 5,250,000 $ 0.24 10.0 $ — Forfeitures — — — — Exercised (2,508.331) 0.15 — 296,176 Outstanding as of June 30, 2018 105,950,000 0.20 7.96 $ 10,638,500 Exercisable as of June 30, 2018 85,652,778 $ 0.21 7.86 $ 9,432,500 The following table summarizes stock option information as of June 30, 2018: Weighted Contractual Exercise Prices Outstanding Life (Yrs.) Exercisable $0.00 3,500,000 7.25 3,500,000 $0.05 33,450,000 8.11 26,125,000 $0.10 27,200,000 8.55 21,694,444 $0.13 250,000 9.50 — $0.15 2,800,000 7.35 250,000 $0.22 2,750,000 9.55 — $0.25 2,500,000 9.25 2,083,334 $0.26 500,000 9.80 — $0.29 1,000,000 9.00 — $0.40 l,000,000 7.67 l,000,000 $0.45 31,000,000 7.30 31,000,000 Total 105,950,000 7.96 85,652,778 During the six months ended June 30, 2018, the Company recognized approximately $1,293,000 of stock-based compensation expense related to options of which non-employees expense was approximately $279,000. As of June 30, 2018, there was approximately $2,460,000 of unrecognized compensation costs related to stock options outstanding of which approximately $569,000 was related to non-employees and will be expensed through 2021. Restricted Stock During the six months ended June 30, 2018, the Company granted 2,750,000 shares of restricted stock to employees of which 2,000,000 shares will be vested by upon achieving certain performance criteria and 750,000 common shares will vest over a three-year period. The restricted stock that is not subject to performance criteria will be expensed over the three-year vesting period was valued at the fair market value at the date of grant. Additionally, in the six months ended June 30, 2018, the Company granted 720,000 shares of restricted stock to non-employee Directors in connection with their compensation to serve as Board Members. The shares were valued at the fair market value at the date of grant and vest quarterly.

DIRECT FINANCING LEASE

DIRECT FINANCING LEASE	6 Months Ended
	Jun. 30, 2018
Direct Financing Lease
DIRECT FINANCING LEASE	NOTE 9 – DIRECT FINANCING LEASE In September 2015, the Company and an entity in Colombia entered into a rental contract for the rental of 78 kiosks to provide cash collection and fare services at transportation stations. The lease term began in May 2016 when the kiosk was installed and operational and when the lease commenced. The term of the rental contract is ten years at an approximate monthly rental of $11,900. The lease has the option at the end of the lease term to purchase each unit for approximately $40. The term of the lease approximates the expected economic life of the kiosks. The lease was accounted for as a direct financing lease. The Company has recorded the transaction as it net investment in the lease and will receive monthly payments of $11,856 before estimated executory costs, or $142,272, annually, to reduce investment in the lease and record income associated with the related amount due. Executory costs are estimated to be $1,677 month and initial direct costs are not considered significant. The transaction resulted in revenue in the quarter and six months ended June 30, 2018 of approximately $19,000 and $38,000. The equipment is subject to direct lease valued at approximately $748,000. At the inception of the lease term, the aggregate minimum future lease payments to be received is approximately $1,422,000 before executory cost. Unearned income is recorded at the inception of this lease was approximately $474,000 and will be recorded over the term of the lease using the effective income rate method. Future minimum lease payments to be received under the lease for the next five years and thereafter are as follows: Remainder of 2018 $ 61,074 2019 122,148 2020 122,148 2021 122,148 2022 122,148 Thereafter 407,160 Sub-total 956,826 Less deferred revenue (310,965 ) Net investment in lease $ 645,861

LEASE OBLIGATION PAYABLE

LEASE OBLIGATION PAYABLE	6 Months Ended
	Jun. 30, 2018
Lease Obligation Payable
LEASE OBLIGATION PAYABLE	NOTE 10 – LEASE OBLIGATION PAYABLE The Company entered into a lease in March 2017 for the rental of its printer for its secured plastic and credential card products business under an arrangement that is classified as a capital lease. The leased equipment is amortized on a straight-line basis over its lease term including the last payment (61 payments) which would transfer ownership to the Company. Total amortization related to the lease equipment as of June 30, 2018 is $42,861. The following is a schedule showing the future minimum lease payments under capital lease by year and the present value of the minimum lease payments as of June 30, 2018. The interest rate related to the lease obligation is 12% and the maturity date is March 31, 2022. Year Ending Remainder of 2018 $ 21,548 2019 43,096 2020 43,096 2021 43,096 Thereafter 10,775 Total minimum lease payments 161,611 Less: Amount representing interest (31,983 ) Present value of minimum lease payments $ 129,628

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 11 – COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company is a party to various legal or administrative proceedings arising in the ordinary course of our business. While any litigation contains an element of uncertainty, we have no reason to believe the outcome of such proceedings will have a material adverse effect on the financial condition or results of operations of the Company.

SUBSEQUENT EVENT

SUBSEQUENT EVENT	6 Months Ended
	Jun. 30, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 12 – SUBSEQUENT EVENTS On August 6, 2018, the Company has received subscription agreements for approximately $9.6 million, by the issuance of approximately 63.9 million shares of Common Stock at $0.15 per share. The Theodore Stern Revocable Trust (the “Stern Trust”) has agreed to invest $1 million in this round. Mr. Theodore Stern, one of the directors of our Company is the trustee of the Stern Trust. On August 6, 2018, the Company provided the Stern Trust Notice that it will partially prepay principal of $1,000,000, plus accrued interest of approximately $158,000 (accrued interest through August 9, 2018), out of the $3,000,000 Senior Unsecured Note dated February 1, 2017 held by the Stern Trust.

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Going concern	Going concern As of June 30, 2018, the Company had an accumulated deficit of approximately $71.6 million. For the six months ended June 30, 2018, the Company’s revenue aggregated approximately $2.4 million and the Company incurred a loss from operations of approximately $4.8 million. The reports of our independent registered public accounting firm on our consolidated financial statements for the years ended December 31, 2017 and 2016 contained an explanatory paragraph regarding our ability to continue as a going concern based upon our net losses. These unaudited condensed 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 Company’s current shareholders, the ability of the Company to obtain additional equity or debt financing to continue operations, the Company’s 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. There is no assurance that the Company will ever be profitable or be able to secure funding or generate sufficient revenues to sustain operations. As such, there is substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed 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. See Note 12 - Subsequent Events regarding the Company’s equity funding round in August 2018 with subscription agreements received for approximately $9.1 million.
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 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. The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the three months ended June 30, 2018 and 2017 because their effect was antidilutive: Security 2018 2017 Stock Options 105,950,000 106,050,000 Warrants 43,731,210 47,538,697 Total 149,681,210 153,588,669
Inventories	Inventories Inventories of kiosks held by IDGS S.A.S are stated at the lower of cost (using the first-in, first-out method) or net realizable value. The kiosks provide electronic ticketing for transit systems. Inventory of plastic/ID cards, digital printing material, which are held by Cards Plus Pty Ltd., are at the lower of cost (using the average method) or market. The Plastic/ID cards and digital printing material are used to provide plastic loyal ID and other types of cards. Inventories at June 30, 2018 and December 31, 2017 consist of kiosks that were not placed into service which are held for sale at June 30, 2018 and cards inventory. As of June 30, 2018, the Company fully reserved the value of the kiosks down to estimated net realizable value of $0.
Leases	Leases All leases are classified at the inception as direct finance leases or operating leases based on whether the lease transfers substantially all the risks and rewards of ownership. Leases that transfer to the lessee substantially all the risks and rewards incidental to ownership of the asset are classified as direct finance leases.
Revenue Recognition	Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). Topic 606 supersedes the revenue recognition requirements in ASU Topic 605, Revenue Recognition (“Topic 605”), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which discusses the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. Collectively, we refer to Topic 606 and Subtopic 340-40 as the “new standard.” The new standard was adopted by the Company in our fiscal year beginning January 1, 2018. The two permitted transition methods under the new standard are the full retrospective method, in which the new standard would be applied to each prior reporting period presented and the cumulative effect of applying the new standard would be recognized at the earliest period shown, or the modified retrospective method, in which the cumulative effect of applying the new standard would be recognized at the date of initial application. Based on our assessment, the impact of the new standard on our operations in prior periods is not significant. The following is the Company’s revenue recognition policy determined by revenue stream for its significant revenue generating activities through June 30, 2018. Cards Plus - The Company recognizes revenue for the design and production of cards when products are shipped or services have been performed due to the short term nature of the contracts. Payment Processing – The Company recognizes revenue for variable fees generated for payment processing solutions that are earned on a usage fee over time based on monthly transaction volumes or on a monthly flat fee rate. Additionally, the Company also sells certain equipment from time to time for which revenue is recognized upon delivery to the customer. Identity Solutions Software – The Company recognizes revenue based on the identified performance obligations over the performance period for fixed consideration and for variable fees generated that are earned on a usage fee based over time based on monthly transaction volumes or on a monthly flat fee rate. The Company had a deferred revenue contract liability of approximately $658,000 and $123,000 as of June 30, 2018 and December 31, 2017 for certain revenue that will be earned in future periods. The $123,000 of deferred revenue contract liability as of December 31, 2017 was earned in the six months ended June 30, 2018. The deferred revenue relates to the service period of support services for two customers. As of June 30, 2018 majority of the deferred revenue contract liability will be recognized over the next three quarters. We have allocated the selling price in the contract to one customer which has multiple performance obligations based on the contract selling price that we believe represents a fair market price for the service rendered. During the six months ended June 30, 2018, the Company had revenue’s from operations in North American, South America and Africa was $1.5 million, $ 0.2 million and $0.7 million respectively compared to $0.3 million, $0.2 million, $0.6 million in the six months ended June 30, 2017 respectively. In 2018, the Company introduced its new transaction platform and products as well as its pay for performance plan for both internal and external salesforce, that is based on a percentage of the benefit derived by the Company. For the three and six months ended June 30, 2018, no revenues associated with these new platforms were recognized or required to be recognized as the services have not yet commenced. The requirements under the new standard may impact future revenue and expenses recognition. One impact could be the accounting related to the capitalization and deferral of incremental commission and other costs of obtaining new contracts. We will defer direct and incremental commission as well as costs to obtain a contract and amortize those costs over the term of the related contract. As of June 30, 2018, there was a deferred commission of approximately $37,000 related to future delivery of an identity solutions system and services. We will review each new contract for the related performance obligations and related revenue and expense recognition implications. We expect that the revenues derived from the new product offerings could include multiple performance obligations. A performance obligation under the new revenue standard is defined as a promise to provide a “distinct” good or service to a customer. The Company has determined that one possible treatment under the new standard is that these services will represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Further, the Company has determined that the performance obligation to provide account access and facilitate transactions may meet the criteria for the “as invoiced” practical expedient, in that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. As a result, the Company anticipates it may recognize revenue in the amount to which the Company has a right to invoice, based on completed performance at the relevant date. Additionally, the contracts could include implementation services, or support on an “as needed” basis and we will review each contract and determine whether such performance obligations are separate and distinct and apply the new standard accordingly to the revenue and expense derived from or related to each such service. Additionally, the Company will capitalize the incremental costs of acquiring and fulfilling a contract with a customer if the Company expects to recover those costs. The incremental costs of acquiring and fulfilling a contract are those that the Company incurs to acquire and fulfill a contract with a customer that it would not have incurred if the contract had not been acquired (for example, a sales commission or specific incremental costs associated with the contract). The Company capitalizes the costs incurred to acquire and fulfill a contract only if those costs meet all the following criteria: a. The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. b. The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. c. The costs are expected to be recovered. The Company will capitalize contract acquisition and fulfillment costs related to signing or renewing contracts that meet the above criteria, which will be classified as contract cost assets in the Company’s Consolidated Balance Sheets. Contract cost assets will be amortized using the straight-line method over the expected period of benefit beginning at the time revenue begins to be realized. The amortization of contract fulfillment cost assets associated with facilitating transactions will be recorded as cost of services in the Company’s Consolidated Statements of Operations. The amortization of contract acquisition cost assets associated with sales commissions that qualify for capitalization will be recorded as selling, general and administrative expense in the Company’s Consolidated Statements of Operations. As of June 30, 2018, the Company had deferred contract costs, represented by contract cost assets of approximately $22,000 which are included in other currents assets for certain costs incurred for the future delivery of a biometric identity system and services. The performance obligation was principally met in the second quarter of 2018. Accordingly, the direct costs and the associated revenue were recognized in the second quarter of 2018. Revenue related to direct financing leases is outside the scope of Topic 606 and is recognized over the term of the lease using the effective interest method.

BASIS OF PRESENTATION (Tables)

BASIS OF PRESENTATION (Tables)	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of potentially dilutive securities	The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the three months ended June 30, 2018 and 2017 because their effect was antidilutive: Security 2018 2017 Stock Options 105,950,000 106,050,000 Warrants 43,731,210 47,538,697 Total 149,681,210 153,588,669

PROPERTY AND EQUIPMENT, NET (Ta

PROPERTY AND EQUIPMENT, NET (Tables)	6 Months Ended
	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	Property and equipment consisted of the following as of June 30, 2018 and December 31, 2017: 2018 2017 Computers and equipment $ 195,041 $ 179,351 Furniture and fixtures 156,867 156,867 351,908 $ 336,218 Less Accumulated depreciation 161,690 126,499 Property and equipment, net $ 190,218 $ 209,719

OTHER ASSETS (Tables)

OTHER ASSETS (Tables)	6 Months Ended
	Jun. 30, 2018
Other Assets [Abstract]
Schedule of other assets	Other assets consisted of the following at June 30, 2018 and December 31, 2017: June 30, December 31, Software and development $ 1,588,868 $ 1,139,409 Other 22,128 104,122 $ 1,610,996 $ 1,243,531

INTANGIBLE ASSETS, NET (OTHER24

INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) (Tables)	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of intangible assets	The following is a summary of activity related to intangible assets for the six months ended June 30, 2018: Customer Intellectual Non-Compete Patents Useful Lives 10 Years 10 Years 10 Years n/a Total Carrying Value at December 31, 2017 $ 1,287,450 $ 1,556,934 $ 5,250 $ 28,446 $ 2,878,080 Additions — — — 22,302 22,302 Amortization (79,358 ) (108,182 ) (1,409 ) — (188,949 ) Carrying Value at June 30, 2018 $ 1,208,092 $ 1,448,752 $ 3,841 $ 50,748 $ 2,711,129 The following is a summary of intangible assets as of June 30, 2018: Customer Intellectual Non-Compete Patent Total Cost $ 1,587,159 $ 2,146,561 $ 14,087 $ 50,444 $ 3,798,251 Accumulated amortization (379,067 ) (697,809 ) (10,246 ) — (1,087,122 ) Carrying Value at June 30, 2018 $ 1,208,092 $ 1,448,752 $ 3,841 $ 50,444 $ 2,711,129
Schedule of future amortization expense of intangible assets	Future expected amortization of intangible assets is as follows: Fiscal Year Ending December 31, Remainder of 2018 $ 188,949 2019 377,512 2020 370,573 2021 368,758 2022 359,268 Thereafter 1,046,069 $ 2,711,129

ACCOUNTS PAYABLE AND ACCRUED 25

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	6 Months Ended
	Jun. 30, 2018
Payables and Accruals [Abstract]
Schedule of accounts payable and accrued expenses	Accounts payable and accrued expenses consisted of the following as of June 30, 2018 and December 31, 2017: 2018 2017 Trade payables $ 299,524 $ 232,842 Accrued interest 425,000 275,000 Accrued payroll and related obligations 809,613 468,012 Other accrued expenses 410,219 471,331 Total $ 1,944,356 $ 1,447,185

NOTES PAYABLE, NET (Tables)

NOTES PAYABLE, NET (Tables)	6 Months Ended
	Jun. 30, 2018
Debt Disclosure [Abstract]
Schedule of notes payable	The following is a summary of notes payable as of June 30, 2018 and December 31, 2017: June 30, December 31, In January 2017, the Company issued a Senior Unsecured Note (“Note”) a face value of $3,000,000, payable two years from issuance, along with an aggregate of 4,500,000 shares of Common Stock, with a fair value of $1,147,500. The Company allocated the proceeds to the common stock based on their relative fair value and recorded a discount of $830,018 to be amortized into interest expense over the two-year term of the note. The Company also paid debt issuance costs consisting of a cash fee of $120,000 and 1,020,000 shares of common stock of the Company with a fair value of $306,000. On April 30, 2018, the Company and the Noteholder agreed to extend the due date of the note until April 30, 2020 for 1,500,000 shares of the Common Stock issued to the Noteholder. The April 2018 change in the terms of this note payable has been determined to be a debt extinguishment in accordance with ASC 470. The reported amounts under the debt extinguishment are not significantly different than that of the Company's reported amounts. 3,000,000 3,000,000 Total Principal Outstanding $ 3,000,000 $ 3,000,000 Unamortized Deferred Debt Discount (245,519 ) (168,345 ) Unamortized Deferred Debt Issuance Costs (55,647 ) (455,935 ) Notes Payable, Net $ 2,698,834 $ 2,375,720
Schedule of notes payable and related discounts	The following is a roll-forward of the Company’s notes payable and related discounts for the six months ended June 30, 2018: Principal Debt Debt Total Balance at December 31, 2017 $ 3,000,000 $ (168,345 ) $ (455,935 ) $ 2,375,720 Amortization — 112,698 210,416 323,114 Balance at June 30, 2018 $ 3,000,000 $ (55,647 ) $ (245,519 ) $ 2,698,834

STOCKHOLDER'S EQUITY (Tables)

STOCKHOLDER'S EQUITY (Tables)	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Schedule of warrant activity	The following is a summary of the Company’s warrant activity for the six months ended June 30, 2018: Number of Weighted Weighted Outstanding at December 31,2017 48,164,543 $ 0.08 2.9 Years Exercised (4,433,333 ) $ 0.05 — Outstanding at June 30, 2018 43,731,210 $ 0.08 2.4 Years
Schedule of black - scholes option-pricing model valuation assumption	The Company determined the grant date fair value of the options granted during the three months ended June 30, 2018 using the Black Scholes Method and the following assumptions: Expected Volatility – 77-78% Expected Term – 6.5 Years Risk Free Rate – 2.4-2.7% Dividend Rate – 0.00%
Schedule of outstanding stock options	Activity related to stock options for the three months ended June 30, 2018 is summarized as follows: Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Outstanding as of December 31, 2017 103,208,331 $ 0.19 8.3 $ 11,457,291 Granted 5,250,000 $ 0.24 10.0 $ — Forfeitures — — — — Exercised (2,508.331) 0.15 — 296,176 Outstanding as of June 30, 2018 105,950,000 0.20 7.96 $ 10,638,500 Exercisable as of June 30, 2018 85,652,778 $ 0.21 7.86 $ 9,432,500
Schedule of stock option	The following table summarizes stock option information as of June 30, 2018: Weighted Contractual Exercise Prices Outstanding Life (Yrs.) Exercisable $0.00 3,500,000 7.25 3,500,000 $0.05 33,450,000 8.11 26,125,000 $0.10 27,200,000 8.55 21,694,444 $0.13 250,000 9.50 — $0.15 2,800,000 7.35 250,000 $0.22 2,750,000 9.55 — $0.25 2,500,000 9.25 2,083,334 $0.26 500,000 9.80 — $0.29 1,000,000 9.00 — $0.40 l,000,000 7.67 l,000,000 $0.45 31,000,000 7.30 31,000,000 Total 105,950,000 7.96 85,652,778

DIRECT FINANCING LEASE (Tables)

DIRECT FINANCING LEASE (Tables)	6 Months Ended
	Jun. 30, 2018
Direct Financing Lease
Schedule of future minimum lease payments to be received	Future minimum lease payments to be received under the lease for the next five years and thereafter are as follows: Remainder of 2018 $ 61,074 2019 122,148 2020 122,148 2021 122,148 2022 122,148 Thereafter 407,160 Sub-total 956,826 Less deferred revenue (310,965 ) Net investment in lease $ 645,861

LEASE OBLIGATION PAYABLE (Table

LEASE OBLIGATION PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2018
Lease Obligation Payable
Schedule of lease obligation payable	The interest rate related to the lease obligation is 12% and the maturity date is March 31, 2022. Year Ending Remainder of 2018 $ 21,548 2019 43,096 2020 43,096 2021 43,096 Thereafter 10,775 Total minimum lease payments 161,611 Less: Amount representing interest (31,983 ) Present value of minimum lease payments $ 129,628

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details) - shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Antidilutive securities, Shares	149,681,210	153,588,669
Employee Stock Option [Member]
Antidilutive securities, Shares	105,950,000	106,050,000
Warrant [Member]
Antidilutive securities, Shares	43,731,210	47,538,697

BASIS OF PRESENTATION (Details

BASIS OF PRESENTATION (Details Narrative) - USD ($)	Aug. 06, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Accumulated deficit		$ (71,633,597)		$ (71,633,597)		$ (66,407,622)
Revenue		1,839,327	$ 559,452	2,365,116	$ 1,144,141
Loss from operations		(2,294,630)	(2,509,810)	(4,803,825)	(7,464,068)
Deferred contract costs		22,000		22,000
Deferred revenue contract liability		658,000		658,000		$ 123,000
Deferred commission		37,000		37,000
Revenue from operations		$ 1,839,327	$ 559,452	2,365,116	1,144,141
Subsequent Event [Member] | Mr. Theodore Stern. [Member] | Theodore Stern Revocable Trust [Member]
Trust funding	$ 91,000,000
North America [Member]
Revenue				1,500,000	300,000
Revenue from operations				1,500,000	300,000
South America [Member]
Revenue				200,000	200,000
Revenue from operations				200,000	200,000
Africa [Member]
Revenue				700,000	600,000
Revenue from operations				$ 700,000	$ 600,000

PROPERTY AND EQUIPMENT, NET (De

PROPERTY AND EQUIPMENT, NET (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 351,908	$ 336,218
Less Accumulated depreciation	(161,690)	(126,499)
Property and equipment, net	190,218	209,719
Computer and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	195,041	179,351
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 156,867	$ 156,867

PROPERTY AND EQUIPMENT, NET (33

PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 35,191	$ 35,920

OTHER ASSETS (Details)

OTHER ASSETS (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Other Assets [Abstract]
Software and development	$ 1,588,868	$ 1,139,409
Other	22,128	104,122
Other assets	$ 1,610,996	$ 1,243,531

INTANGIBLE ASSETS, NET (OTHER35

INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) (Details)	6 Months Ended
	Jun. 30, 2018USD ($)
Finite-Lived Intangible Assets [Line Items]
Carrying Value	$ 2,878,080
Additions	22,302
Amortization	(188,949)
Carrying Value	$ 2,711,129
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Lives	10 years
Carrying Value	$ 1,287,450
Additions
Amortization	(79,358)
Carrying Value	$ 1,208,092
Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Lives	10 years
Carrying Value	$ 1,556,934
Additions
Amortization	(108,182)
Carrying Value	$ 1,448,752
Non-Compete [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Lives	10 years
Carrying Value	$ 5,250
Additions
Amortization	(1,409)
Carrying Value	3,841
Patents Pending [Member]
Finite-Lived Intangible Assets [Line Items]
Carrying Value	28,446
Additions	22,302
Amortization
Carrying Value	$ 50,444

INTANGIBLE ASSETS, NET (OTHER36

INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) (Details 1) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Cost	$ 3,798,251
Accumulated amortization	(1,087,122)
Carrying Value	2,711,129	$ 2,878,080
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	1,587,159
Accumulated amortization	(379,067)
Carrying Value	1,208,092	1,287,450
Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	2,146,561
Accumulated amortization	(697,809)
Carrying Value	1,448,752	1,556,934
Non-Compete [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	14,087
Accumulated amortization	(10,246)
Carrying Value	3,841	5,250
Patents Pending [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	50,444
Accumulated amortization
Carrying Value	$ 50,444	$ 28,446

INTANGIBLE ASSETS, NET (OTHER37

INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) (Details 2) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2018	$ 188,949
2,019	377,512
2,020	370,573
2,021	368,758
2,022	359,268
Thereafter	1,046,069
Total	$ 2,711,129	$ 2,878,080

ACCOUNTS PAYABLE AND ACCRUED 38

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Trade payables	$ 299,524	$ 232,842
Accrued interest	425,000	275,000
Accrued payroll and related obligations	809,613	468,012
Other accrued expenses	410,219	471,331
Total	$ 1,944,356	$ 1,447,185

NOTES PAYABLE, NET (Details)

NOTES PAYABLE, NET (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Jan. 31, 2017
Short-term Debt [Line Items]
Total Principal Outstanding	$ 3,000,000	$ 3,000,000
Unamortized Deferred Debt Discount	(55,647)	(168,345)
Unamortized Deferred Debt Issuance Costs	(245,519)	(455,935)
Notes Payable, net of current maturities	2,698,834	2,375,720
Senior Unsecured Note [Member]
Short-term Debt [Line Items]
Total Principal Outstanding	$ 3,000,000	$ 3,000,000
Unamortized Deferred Debt Issuance Costs			$ (830,018)

NOTES PAYABLE, NET (Details 1)

NOTES PAYABLE, NET (Details 1)	6 Months Ended
	Jun. 30, 2018USD ($)
Principal Balance
Begining Balance	$ 3,000,000
Amortization
Ending Balance	3,000,000
Debt Issuance Costs
Begining Balance	(168,345)
Amortization	112,698
Ending Balance	(55,647)
Debt Discounts
Begining Balance	(455,935)
Amortization	210,416
Ending Balance	(245,519)
Total
Begining Balance	2,375,720
Amortization	323,114
Ending Balance	$ 2,698,834

NOTES PAYABLE, NET (Details Nar

NOTES PAYABLE, NET (Details Narrative) - USD ($)	Apr. 30, 2018	Jan. 31, 2017	Jun. 30, 2017	Jun. 30, 2018	Dec. 31, 2017
Short-term Debt [Line Items]
Debt discount				$ 245,519	$ 455,935
Senior Unsecured Note [Member]
Short-term Debt [Line Items]
Face amount		$ 3,000,000
Debt discount		830,018
Debt issuance costs		306,000
Debt issuance costs consisting shares value		$ 120,000
Debt issuance costs consisting shares		1,020,000
Warrant term		2 years
Common stock issues value		$ 1,147,500	$ 420,000
Common stock issues shares		4,500,000	1,500,000
Common stock issued to the noteholder	$ 1,500,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended
	Jan. 31, 2017	Jun. 30, 2017	Nov. 30, 2016
12% Promissory Notes Due in January 2017 [Member]
Face amount			$ 13,609
Senior Unsecured Note [Member]
Face amount	$ 3,000,000
Warrant term	2 years
Common stock issues value	$ 1,147,500	$ 420,000
Common stock issues shares	4,500,000	1,500,000

STOCKHOLDER'S EQUITY (DEFICIT)

STOCKHOLDER'S EQUITY (DEFICIT) (Details)	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning Balance Outstanding | shares	48,164,543
Exercised | shares	(4,433,333)
Ending Balance Outstanding | shares	43,731,210
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Exercise Price [Roll Forward]
Beginning Balance Outstanding | $ / shares	$ 0.08
Exercised | $ / shares	0.05
Ending Balance Outstanding | $ / shares	$ 0.08
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Remaining Life [Roll Forward]
Beginning Balance Outstanding	2 years 10 months 24 days
Ending Balance Outstanding	2 years 4 months 24 days

STOCKHOLDER'S EQUITY (DEFICIT44

STOCKHOLDER'S EQUITY (DEFICIT) (Details 1)	6 Months Ended
	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Term	6 years 6 months
Dividend Rate	0.00%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Volatility	77.00%
Risk Free Rate	2.40%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Volatility	78.00%
Risk Free Rate	2.70%

STOCKHOLDER'S EQUITY (DEFICIT45

STOCKHOLDER'S EQUITY (DEFICIT) (Details 2)	6 Months Ended
	Jun. 30, 2018USD ($)$ / sharesshares
Number of Shares [Roll Forward]
Outstanding at beginning | shares	103,208,331
Granted | shares	5,250,000
Forfeitures | shares
Exercised | shares	(2,508.331)
Outstanding at end | shares	105,950,000
Exercisable at end | shares	85,652,778
Weighted Average Exercise Price [Roll Forward]
Outstanding at beginning | $ / shares	$ 0.19
Granted | $ / shares	0.24
Forfeitures | $ / shares
Exercised | $ / shares	0.15
Outstanding at end | $ / shares	0.20
Exercisable at end | $ / shares	$ 0.21
Weighted Average Contractual Term [Roll Forward]
Outstanding at beginning	8 years 3 months 18 days
Granted	10 years
Outstanding at end	7 years 11 months 15 days
Exercisable at end	7 years 10 months 9 days
Aggregate Intrinsic Value [Roll Forward]
Outstanding at beginning | $	$ 11,457,291
Granted | $
Forfeitures | $
Exercised | $	296,176
Outstanding at end | $	10,638,500
Exercisable at end | $	$ 9,432,500

STOCKHOLDER'S EQUITY (DEFICIT46

STOCKHOLDER'S EQUITY (DEFICIT) (Details 3) - shares	3 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Exercise Price $0.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	3,500,000	3,500,000
Weighted Average Contractual Life		7 years 3 months
Exercisable	3,500,000	3,500,000
Exercise Price $0.05 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	33,450,000	33,450,000
Weighted Average Contractual Life	8 years 1 month 9 days
Exercisable	26,125,000	26,125,000
Exercise Price $0.10 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	27,200,000	27,200,000
Weighted Average Contractual Life	8 years 6 months 18 days
Exercisable	21,694,444	21,694,444
Exercise Price $0.13 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	250,000	250,000
Weighted Average Contractual Life	9 years 6 months
Exercisable
Exercise Price $0.15 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	2,800,000	2,800,000
Weighted Average Contractual Life	7 years 4 months 6 days
Exercisable	250,000	250,000
Exercise Price $0.22 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	2,750,000	2,750,000
Weighted Average Contractual Life	9 years 6 months 18 days
Exercisable
Exercise Price $0.25 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	2,500,000	2,500,000
Weighted Average Contractual Life	9 years 3 months
Exercisable	2,083,334	2,083,334
Exercise Price $0.26 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	500,000	500,000
Weighted Average Contractual Life	9 years 9 months 18 days
Exercisable
Exercise Price $0.29 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	1,000,000	1,000,000
Weighted Average Contractual Life	9 years
Exercisable
Exercise Price $0.40 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	1,000,000	1,000,000
Weighted Average Contractual Life	7 years 8 months 1 day
Exercisable	1,000,000	1,000,000
Exercise Price $0.45 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding	31,000,000	31,000,000
Weighted Average Contractual Life	7 years 3 months 18 days
Exercisable	31,000,000	31,000,000

STOCKHOLDER'S EQUITY (DEFICIT47

STOCKHOLDER'S EQUITY (DEFICIT) (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Number of options granted	5,250,000
Number of options exercisable	85,652,778
Exercise price of option (in dollars per share)	$ 0.21
Expected Term	6 years 6 months
Dividend Rate	0.00%
Stock based compensation	$ 1,292,900	$ 4,266,670
Unrecognized compensation costs	2,460,000
Value of stock issued for services	$ 47,667
Number of shares cancelled due to settlement	728,448
Restricted Stock [Member]
Number of restricted stock issued for services	720,000
Number of stock granted	2,750,000
Expected Term	3 years
Restricted Stock [Member] | Tranche Two[Member]
Number of stock vested	750,000
Vesting term	3 years
Restricted Stock [Member] | Tranche One [Member]
Number of stock vested	2,000,000
Service Provider [Member]
Number of stock issued for services	170,240
Value of stock issued for services	$ 32,213
Investor [Member] | Warrant [Member]
Number of restricted stock issued for services	750,000
Exercise price (in dollars per share)	$ 0.05
Common stock issued upon exercise of warrants (in shares)	4,433,333
Employees and One Non Employee [Member]
Number of restricted stock issued for services	2,000,000
Number of options granted	5,250,000
Vesting term	3 years
Value of options granted	$ 792,000
Employees and One Non Employee Member [Member] | Tranche One [Member]
Number of options exercisable	3,250,000
Exercise price of option (in dollars per share)	$ 0.22
Employees and Service Provider [Member] | Tranche Two[Member]
Number of restricted stock issued for services	32,213
Number of options exercisable	2,000,000
Exercise price of option (in dollars per share)	$ 0.25
Employees and Service Provider [Member] | Tranche One [Member]
Number of restricted stock issued for services	170,240
Vesting term	3 years
Expected Term	10 years
Non - Employees [Member]
Stock based compensation	$ 279,000
Unrecognized compensation costs	$ 569,000

DIRECT FINANCING LEASE (Details

DIRECT FINANCING LEASE (Details)	Jun. 30, 2018USD ($)
Direct Financing Lease
Remainder of 2018	$ 61,074
2,019	122,148
2,020	122,148
2,021	122,148
2,022	122,148
Thereafter	407,160
Sub-total	956,826
Less deferred revenue	(310,965)
Net investment in lease	$ 645,861

DIRECT FINANCING LEASE (Detai49

DIRECT FINANCING LEASE (Details Narrative)	1 Months Ended	6 Months Ended
	Sep. 30, 2015USD ($)Kiosks$ / Units	Jun. 30, 2018USD ($)
Equipment under capital lease		$ 748,000
Aggregate minimum future lease payments		1,422,000
Unearned income		474,000
Cash Collection Services (the "Contract") [Member] | Recaudo Bogota S.A.S. [Member]
Number of kiosks | Kiosks	78
Lease contract term	10 years
Lease monthly rental	$ 11,900
Lease rent expense	142,272
Estimated executory costs	$ 1,677
Purchase price at the end of lease term (in dollars per unit) | $ / Units	40
Revenues		$ 38,000

LEASE OBLIGATION PAYABLE (Detai

LEASE OBLIGATION PAYABLE (Details)	Jun. 30, 2018USD ($)
Lease Obligation Payable
Remainder of 2018	$ 21,548
2,019	43,096
2,020	43,096
2,021	43,096
Thereafter	10,775
Total minimum lease payments	161,611
Less: Amount representing interest	(31,983)
Present value of minimum lease payments	$ 129,628

LEASE OBLIGATION PAYABLE (Det51

LEASE OBLIGATION PAYABLE (Details Narrative)	6 Months Ended
	Jun. 30, 2018USD ($)
Lease Obligation Payable
Amortization of lease equipment	$ 42,861
Lease obligation interest rate	12.00%
Lease obligation maturity date	Mar. 31, 2022

SUBSEQUENT EVENT (Details Narra

SUBSEQUENT EVENT (Details Narrative) - USD ($)	Aug. 06, 2018	Jan. 31, 2017	Jun. 30, 2018	Jun. 30, 2017
Subsequent Event [Line Items]
Aggregate gross proceeds				$ 3,570,100
Senior Unsecured Note [Member]
Subsequent Event [Line Items]
Number of shares issued		4,500,000		1,500,000
Face amount		$ 3,000,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Aggregate gross proceeds
Number of shares issued	60,400,000
Share price (in dollars per share)	$ 0.15
Additional commitments
Subsequent Event [Member] | Senior Unsecured Note [Member]
Subsequent Event [Line Items]
Face amount	3,000,000
Repayment of partially principal amount	1,000,000
Repayment of partially accrued interest	158,000
Subsequent Event [Member] | Mr. Theodore Stern. [Member] | Theodore Stern Revocable Trust [Member]
Subsequent Event [Line Items]
Trust funding	$ 91,000,000