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 Reported			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. 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.

(2) 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.

(3) 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.

(4) 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.

(5) 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.

(6) 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.

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. 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.

(2) 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.

(3) 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.

(4) 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.

(5) 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.

(6) 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.