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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 14COMMITMENTS AND CONTINGENCIES

 

Contingent Purchase Consideration

 

The Company has recorded a contingent liability of approximately $370,000 related to the acquisition of Multipay because of the contingency of the shares to be issued and debt to be released upon the payment of certain liabilities by the Multipay Shareholders. During the year ended December 31, 2016, the Company issued 260,537 shares of common stock in settlement of approximately $60,000 of the existing obligation, paid certain existing obligations and the remaining balance of approximately $49,000 as of December 31, 2016 is included in accounts payable and accrued expenses.

 

Legal Matters

 

From time to time, claims are made against the Company in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting the Company from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Company’s results of operations for that period or future periods. The Company is not presently a party to any pending or threatened legal proceedings. 

 

Executive Compensation

 

As of December 31, 2016, the Company had employment agreements with certain key members of the management team providing base salary amounts and provisions for stock compensation, cash bonuses and other benefits to be granted at the discretion of the Board of Directors.

 

As of January 31, 2017, the Company made certain changes to the management team and its Board of Directors and entered into Executive Retention Agreements with four members of the management team. The Executive Retention Agreements include provisions for base salary, bonus amounts upon meeting certain performance milestones, severance benefits for involuntary termination from a change in control or other events as defined in their respective agreements. Additionally, the vesting of certain awards could be accelerated upon a change in control (as defined).  

 

Operating Leases

 

On December 19, 2014, the Company entered in a twelve-month lease for office facilities in Florida at a monthly rate of $3,000, with an option to extend the lease for another twelve months for $3,300 per month for 2016. On December 28, 2016, the parties extended the lease for an additional twelve months through December 31, 2017 at a monthly rent of $3,400 per month. The Company provided termination notice to the landlord and will cease paying rent at this location effective August 31, 2017.

 

The Company entered into a new office lease in Plantation, Florida beginning July 1, 2017 for approximately 2,100 square feet. Monthly rent will approximate $2,600 per month for thirty-seven months with a 3% increase on each subsequent annual anniversary. The company will be responsible for their respective share of building expenses.

 

Additionally, the Company leased office space during 2016 in Long Beach, New York at a monthly rent of $2,250. Beginning in February 2017, the monthly rent was increased to $4,500 as additional office space was required. The agreement is on a month to month basis.

 

In addition, the Company is party to operating leases for its office location and warehouse in Colombia. The Company through April 30, 2017, paid $4,400 a month for its office location. In April 2017, MultiPay S.A.S. entered into a new lease beginning April 22, 2017 for two years to replace it current offices. The new lease cost is approximately $8,500 per month with an inflation adjustment after one year. The lease will be extended for one additional year unless written notice to the contrary is provided at least six months in advance The Company also rents a warehouse at a rate of approximately $2,700 a month per a one year lease that expires on August 31, 2017. Furthermore, the Company leases an apartment at approximately $2,100 a month and the current lease term is June 6, 2016 to June 5, 2017. The lease has automatic renewals for successive one year periods.

 

The Company also leases space for its operation in South Africa. The current lease expires on June 30, 2017 and the approximate monthly rent is $6,500 and is currently reviewing lease options. Additionally, Cards Plus entered into an equipment lease for approximately $3,600 per month for five years.

 

Rent expense for the years ended 2016 and 2015 was approximately $230,000 and $72,000 respectively.

 

Other

 

The Company has agreed to issue 1% of ID GLOBAL LATAM to Slabb, Inc. in early 2017.

 

The Company has entered into a software service and license agreement for $400,000 of which $100,000 was paid in 2016 and the balance of $300,000 will be remitted in 2017 upon meeting certain milestones.