10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	QUARTERLY PERIOD ENDED JUNE 30, 2017

OR

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	Commission File Number: 000-55645

IDDRIVEN, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada	46-4724127
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

13355 Moss Rock Dr., Auburn, CA	95602
(Address of Principal Executive Offices)	(Zip Code)

(415) 226-7773

(Registrant’s Telephone Number, Including Area Code)

Not applicable.

(Former Name, former address and former fiscal year, if changed since last report)

Indicate by checkmark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

Indicate by check mark whether the registrant is an “emerging growth company” as defined in Section 2(a) of the Securities Act and Section 3(a) of the Exchange Act. Yes x No ¨

Indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act and Section 13(a) of the Exchange Act. ¨

As of August 17, 2017, there were 144,246,935 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	35
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

2

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report includes forward-looking statements. These forward looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including but not limited to: variability of our future revenues and financial performance; risks associated with product development and technological changes; the acceptance of our products in the marketplace by potential future customers; general economic conditions. Factors that could cause our actual results of operations and financial condition to differ materially are discussed in greater detail in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on March 31, 2017.

You should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual result 

3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

IDdriven Inc.

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2017			2016
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	12,174		$	13,174
Accounts receivable		9,449			12,236
Other receivables and prepaid expenses		14,402			11,514
Total Current Assets		36,025			36,924
Property and equipment, net		2,949			4,769
Other assets		18,075			16,648
TOTAL ASSETS	$	57,049		$	58,341
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable (including related party payables of $20,691 and $17,152, respectively)	$	282,707		$	195,767
Accrued expenses		188,230			98,684
Accrued interest - related parties		35,148			9,172
Deferred revenue and customer deposits		-			7,500
Management fees payable - related parties		457,548			296,816
Other current liabilities		39,255			27,331
Convertible notes payable, net of unamortized debt discount of $273,136 and $414,118, respectively		1,177,180			756,191
Notes payable		61,000			51,000
Notes payable - related parties		42,180			38,850
Derivative liabilities		709,734			2,577,652
Total Current Liabilities		2,992,982			4,058,963
TOTAL LIABILITIES		2,992,982			4,058,963
Commitments and contingencies		-			-
Stockholders' Deficit
Preferred stock: 10,000,000 authorized shares; $0.001 par value
Series A convertible preferred stock, $0.001 par value, $1.00 stated value; 808,000 shares designated; 94,333 and 200,279 shares issued and outstanding, respectively.		95			201
Series B preferred stock, $0.001 par value, $1.00 stated value; 1,500,000 shares designated; 1,500,000 and 0 shares issued and outstanding, respectively.		1,500			-
Common stock: 2,000,000,000 authorized; $0.001 par value 132,392,122 and 97,457,397 shares issued and outstanding, respectively		132,392			97,457
Additional paid in capital		1,495,162			1,171,625
Series B preferred stock subscription receivable		(1,500	)		-
Accumulated deficit		(4,530,844	)		(5,255,277	)
Accumulated other comprehensive loss		(32,738	)		(14,628	)
Total Stockholders' Deficit		(2,935,933	)		(4,000,622	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	57,049		$	58,341

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

4

IDdriven Inc.

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Revenues	$	18,356		$	5,241		$	36,589		$	6,973
Cost of sales		6,000			-			6,000			-
Gross profit		12,356			5,241			30,589			6,973
Operating Expenses
General and administration		191,339			304,650			319,021			464,490
Salaries and wages		46,469			95,841			99,911			190,803
Stock based compensation		11,887			10,842			40,071			61,684
Research and development		30,777			31,698			60,225			62,647
Management fees		125,690			125,968			248,138			250,520
Depreciation		1,065			1,287			2,112			2,673
Total operating expenses		407,227			570,286			769,478			1,032,817
Loss from operations		(394,871	)		(565,045	)		(738,889	)		(1,025,844	)
Other income (expense)
Interest expense		(234,326	)		(98,385	)		(479,535	)		(121,966	)
Change in fair value of derivative liability		(442,463	)		911,901			1,834,843			(264,249	)
Gain on extinguishment of debt		38,625			-			108,014			-
Total other (expense) income		(638,164	)		813,516			1,463,322			(386,215	)
Net (loss) income before taxes		(1,033,035	)		248,471			724,433			(1,412,059	)
Income tax benefit		-			-			-			-
Net (loss) income	$	(1,033,035	)	$	248,471		$	724,433		$	(1,412,059	)
Other comprehensive income (loss)
Foreign currency translation adjustment		(13,429	)		(207	)		(18,110	)		(3,406	)
Comprehensive (loss) income	$	(1,046,464	)	$	248,264		$	706,323		$	(1,415,465	)
Net (loss) income per common share, Basic and Diluted	$	(0.01	)	$	0.00		$	0.01		$	(0.02	)
Weighted average number of common shares outstanding, Basic and Diluted		119,398,887			75,583,779			110,048,996			75,377,692

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

5

IDdriven Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	Six Months Ended
	June 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	724,433		$	(1,412,059	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		2,112			2,673
Stock-based compensation		40,071			61,684
Expenses paid by note payable		-			27,500
Amortization of debt discount and debt issue cost		354,736			87,994
Gain on extinguishment of debt		(108,014	)		-
Change in fair value of derivative		(1,834,843	)		264,249
Changes in operating assets and liabilities:
Accounts receivable		3,181			2,060
Prepaid expenses and other receivables		(2,400	)		(9,121	)
Accounts payable		133,878			246,876
Accrued interest		98,566			33,764
Accrued interest, related parties		25,976			-
Deferred revenue		(7,500	)		-
Management fees, related parties		161,271			-
Other current liabilities		23,125			45,943
Net Cash Used in Operating Activities		(385,408	)		(648,437	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		-			(1,458	)
Net Cash Used in Investing Activities		-			(1,458	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible note payable		413,346			325,000
Payment of financing cost		(52,500	)		(17,500	)
Proceeds from issuance of promissory notes payable		10,000			111,100
Proceeds from issuance of common shares		27,300			-
Proceeds from preferred stock subscription		-			250,000
Net Cash Provided By Financing Activities		398,146			668,600
Foreign currency translation effect on cash and cash equivalents		(13,738	)		744
Net (decrease) increase in cash and cash equivalents		(1,000	)		19,449
Cash and cash equivalents, beginning of period		13,174			48,764
Cash and cash equivalents, end of period	$	12,174		$	68,213
Supplemental cash flow information
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-
Supplemented disclosure of non-cash investing and financing activities
Derivative liability recognized as debt discount	$	161,255		$	330,562
Prepaid expense paid by note payable	$	-		$	17,500
Conversion of Series A Convertible Preferred Stock into common stock	$	3,580		$	1,890
Conversion of notes payable and accrued interest into common stock	$	204,680		$	-
Series B Preferred Stock subscription receivable	$	1,500		$	-
Convertible notes issued to settle accounts payable	$	30,000		$	-
Reclassification of derivative liability from additional paid in capital due to tainted instruments	$	12,459		$	-
Common stock issued for debt discount	$	-		$	100,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

6

IDDRIVEN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2017

(UNAUDITED)

NOTE 1. ORGANIZATION AND BUSINESS

Organization and Operations

IDdriven, Inc., (“IDdriven”, “we”, “us”, or the “Company”) is a Nevada corporation incorporated on January 27, 2014 under the name TiXFi, Inc. Insight Innovators B.V., was incorporated on May 22, 2013 in the Netherlands and has its registered corporate seat in Amersfoort, The Netherlands.

Going Concern Matters

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the Company’s continuation as a going concern. The Company has an accumulated deficit of $4,530,844 as of June 30, 2017. In addition, current liabilities exceed current assets by $2,956,957 as of June 30, 2017.

Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. See Note 12 - Subsequent Events.

There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail or cease its operations.

Due to uncertainties related to these matters, there exists a substantial doubt about the ability of the Company to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation of Interim Financial Statements

The accompanying interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year 2016 have been omitted. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended December 31, 2016 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on March 31, 2017.

Consolidation Policy

For June 30, 2017, the unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Insight Innovators B.V. All significant intercompany balances and transactions have been eliminated in consolidation.

7

Use of Estimates and Assumptions

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions about collection of accounts and notes receivable, the valuation and recognition of stock-based compensation expense, the valuation and recognition of derivative liability, valuation allowance for deferred tax assets and useful life of fixed assets.

Functional currency

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars (“USD”). The Company’s wholly owned subsidiary (Insight’s) functional currency is the Euro. The financial statements are translated into USD in accordance with Codification ASC 830, “Foreign Currency Matters”. All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, shareholders’ equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in the shareholders’ equity in accordance with Codification ASC 220, “Comprehensive Income”.

Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into Euro at the rate on the date of the transaction and included in the results of operations as incurred. There were no material transaction gains or losses in the periods presented.

	June 30, 2017		December 31, 2016		June 30, 2016
Spot Euro: USD exchange rate	$	1.14	$	1.05	$	1.11
Average Euro: USD exchange rate	$	1.06–1.10	$	1.08–1.12	$	1.11–1.12

Cash and cash equivalents

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. As of June 30, 2017, and December 31, 2016, cash primarily consists of cash on hand and in bank. As of June 30, 2017, cash held in a U.S. bank was $8,087 and cash held in foreign bank in the Netherlands was $4,087 (EUR3,585). As of December 31, 2016, cash held in a U.S. bank was $9,971 and cash held in foreign bank in the Netherlands was $3,203 (EUR3,050).

Revenue recognition

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or is determinable; and (iv) collectability is reasonably assured. Determination of criteria (iii) and (iv) are based on management’s judgments regarding the fixed nature of the selling prices of the services delivered and the collectability of those amounts. The Company’s agreements do not include general rights of return and do not provide clients with the right to take possession of the software supporting the services being provided. As such, the agreements are accounted for as service contracts.

Revenues from the services rendered are recognized in proportion to the services delivered.

Any amount receivable or received, but unrecognized for revenue recognition purpose is recorded as deferred revenues.

Sales taxes collected from clients and remitted to governmental authorities where applicable are accounted for on a net basis and therefore are excluded from revenues in the statements of operations.

8

Share-Based Expense

ASC 718,” Compensation - Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50,” Equity - Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Share-based expense totaled $40,071 and $61,684 for the six months ending June 30, 2017 and 2016, respectively.

Fair value measurements

Fair value is defined as the price that the Company would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent counter-party in the principal market or in the absence of a principal market, the most advantageous market for the investment or liability. A three-tier hierarchy is established to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs); and establishes a classification of fair value measurements for disclosure purposes.

The hierarchy is summarized in the three broad levels listed below:

Level 1	-	quoted prices in active markets for identical assets and liabilities
Level 2	-	other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.)
Level 3	-	significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities).

In accordance with Accounting Standards Codification (“ASC”) 815, the Company’s debt derivative liabilities are measured at fair value on a recurring basis, and are level 3 measurements in the three-tier fair value hierarchy.

There were no transfers between the levels of the fair value hierarchy during the three and six months ended June 30, 2017 and 2016.

Fair value of financial instruments

The Company’s financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

9

The following table summarizes fair value measurements by level at June 30, 2017 and December 31, 2016 measured at fair value on a recurring basis:

June 30, 2017	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	709,734	$	709,734

December 31, 2016	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	2,577,652	$	2,577,652

Recently Issued Accounting Standards

In May 2014, the FASB issued an accounting standards update which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

In February 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-06, “Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting.” Among other things, the amendments require a plan’s interest in that master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. The amendments also remove the requirement to disclose the percentage interest in the master trust for plans with divided interests and require that all plans disclose the dollar amount of their interest in each of those general types of investments. The amendments require all plans to disclose: (a) their master trust’s other asset and liability balances; and (b) the dollar amount of the plan’s interest in each of those balances. Lastly, the amendments eliminate redundant investment disclosures (e.g., those required by Topics 815 and 820) relating to 401(h) account assets. Effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The amendments should be applied retrospectively to each period for which financial statements are presented. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its consolidated financial statements.

In February 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The amendments clarify that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments also define the term in substance nonfinancial asset. The amendments clarify that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. A contract that includes the transfer of ownership interests in one or more consolidated subsidiaries is within the scope of Subtopic 610-20 if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. Effective at the same time as the amendments in Update 2014-09, Revenue from Contracts with Customers (Topic 606). Therefore, public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the amendments in this Update to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities should apply the amendments in this Update to annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. All other entities may apply the guidance earlier as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance earlier as of annual reporting periods beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance. An entity is required to apply the amendments in this Update at the same time that it applies the amendments in Update 2014-09. The Company is currently evaluating the potential impact this standard may have on its financial position and results of operations.

10

In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard will be effective for the Company on January 1, 2018, however, early adoption is permitted with prospective application to any business development transaction.

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2017 and December 31, 2016:

	June 30,			December 31,
	2017			2016
Furniture	$	5,915		$	5,915
Computers		18,886			18,886
		24,801			24,801
Accumulated Depreciation		(19,705	)		(17,593	)
Foreign currency translation effect		(2,147	)		(2,439	)
	$	2,949		$	4,769

Depreciation expense for the three and six months ended June 30 2017 amounted to $1,065 and $2,112, respectively. Depreciation expense for the three and six months ended June 30 2016 amounted to $1,287 and $2,673, respectively.

All of the Company’s property and equipment are recorded in Insight (foreign subsidiary) as of June 30, 2017 and December 31, 2016.

NOTE 4. NOTES PAYABLE

Notes Payable

	June 30,		December 31,
	2017		2016
Promissory Notes - December 2016	$	51,000	$	51,000
Promissory Notes - January 2017		10,000		-
Less current portion of notes payable		61,000		51,000
Long-term notes payable	$	-	$	-

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As of June 30, 2017, and December 31, 2016, the accrued interest related to this promissory note was $5,935 and $28, respectively.

Dated December 30, 2016

On December 30, 2016, the Company issued a 20% Promissory Note for $51,000. The note bears interest at a rate of 20% per annum and the maturity date is the twelve months from the issue date.

Dated January 26, 2017

On January 26, 2017, the Company issued a 20% Promissory Note for $10,000. The note bears interest at a rate of 20% per annum and the maturity date is the twelve months from the issue date.

Notes Payable - Related Parties

Notes payable - related party consisted of the following at June 30, 2017 and December 31, 2016:

	June 30,		December 31,
	2017		2016
Promissory Notes	$	42,180	$	38,850
Less current portion of notes payable		42,180		38,850
Long-term notes payable	$	-	$	-

Dated June 29, 2016

On June 29, 2016, the Company issued an 8% Promissory Note for EUR 10,000 ($11,400). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender.

Dated June 30, 2016

On June 30, 2016, the Company issued an 8% Promissory Note for EUR 10,000 ($11,400). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender.

Dated August 29, 2016

On August 29, 2016, the Company issued an 8% Promissory Note for EUR 35,000 ($39,900). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender. EUR18,000 ($18,900) of note was repaid in December 2016.

As of June 30, 2017, and December 31, 2016, the accrued interest related to these promissory notes - related party was $3,895 and $2,046, respectively.

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NOTE 5. CONVERTIBLE NOTES PAYABLE

Convertible notes payable consisted of the following at June 30, 2017 and December 31, 2016:

	June 30,			December 31,
	2017			2016
Convertible Note - December 2015	$	350,000		$	350,000
Convertible Note - February 2016		-			30,000
Convertible Note - March 2016		250,000			250,000
Convertible Notes - May 2016		62,500			75,000
Convertible Note - June 2016		-			15,000
Convertible Notes - September 2016		132,654			201,511
Convertible Notes -October 2016		80,162			148,798
Convertible Notes - November 2016		25,000			25,000
Convertible Notes - December 2016		75,000			75,000
Convertible Notes - March 2017		168,500			-
Convertible Notes - April 2017		223,500			-
Convertible Notes - June 2017		83,000			-
		1,450,316			1,170,309
Less debt discount and debt issuance cost		(273,136	)		(414,118	)
		1,177,180			756,191
Less current portion of convertible notes payable		1,177,180			756,191
Long-term convertible notes payable	$	-		$	-

The Company recognized amortization expense related to the debt discount and deferred financing fees of $354,736 and $87,994 for the six months ended June 30, 2017 and 2016, respectively, which are included in interest expense in the consolidated statements of operations.

10% Convertible Note - December 2015

On December 21, 2015, the Company issued a 10% Convertible Note (the “10% Convertible Note”) in the amount of $500,000, in exchange for a promissory note for $500,000 originally issued by Insight on October 20, 2015 to an unrelated third party investor (the “Investor”). The company assumed accrued interest of $3,838 due from this previous promissory note. The 10% Convertible Note bears interest at the rate of 10% per annum and matures May 1, 2017. The holder is entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. The conversion price (the “Conversion Price”) is 75% of the volume weighted average price of the Common Stock for the ten (10) trading days immediately prior to the applicable conversion date, subject to adjustment herein but in no event: (i) lower than $4,000,000 divided by the total number of shares of Common Stock outstanding immediately prior to the conversion date; or (ii) greater than $12,000,000 divided by the total number of shares of common stock outstanding immediately prior to the conversion date.

On July 22, 2016, $150,000 of the Convertible Note was converted into 941,620 common shares at market trading price $0.27 per share. $160,771 value of derivative liability on the date of conversion was extinguished and the conversion generated $56,534 gain on extinguishment of debt in the consolidated statements of operations.

Additional features of the 10% Convertible Note include:

· Liquidation Preference. Upon a liquidation event, we will first pay to the Investor the principal amount owing, plus all accrued and unpaid interest, and any other fees or liquidated damages then due and owing thereon. After full payment of the liquidation preference amount to Investor, we will then distribute the remaining assets to holders of common stock, other junior securities (if any). The 10% Convertible Note is intended to rank senior to our common stock or any equivalents thereof, or any preferred stock we may designate, including the Series A Preferred, in respect of any dividends or distributions many in respect thereof.

·   Mandatory Conversion. The 10% Convertible Note shall automatically convert into shares of our common stock at the Conversion Price without any action of the holder upon the occurrence of any of the following events after the closing date of the Share Exchange: (i) the completion of a public offering of our securities for gross proceeds of at least $5,000,000 pursuant to an effective registration statement under the Securities Act; or (ii) if we complete one or more financing transactions for gross proceeds of at least $5,000,000.

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·   Ownership Limitations. The 10% Convertible Note is not convertible to the extent that (a) the number of shares of our common stock beneficially owned by the Investor and (b) the number of shares of our common stock issuable upon the conversion of the 10% Convertible Note or otherwise would result in the beneficial ownership by holder of more than 4.99% of our then outstanding common stock. This ownership limitation can be increased or decreased to any percentage not exceeding 9.99% by the Investor upon 61 days’ notice to us.

· Certain Adjustments. The conversion price of the 10% Convertible Note is subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.

· Negative Covenants. As long as the 10% Convertible Note is outstanding, unless the holders of at least 75% of the then outstanding principal amount of the 10% Convertible Note shall have otherwise given prior written consent, we agreed that we will not amend our charter documents and bylaws in any manner that materially and adversely affects any rights of the holder, repurchase our common stock or certain other securities, pay dividends or distributions on any securities junior to the 10% Convertible Note, sell, lease or otherwise dispose of any significant portion of our assets outside the ordinary course of business or enter into any agreement with respect to any of the foregoing.

·    Redemption Upon Triggering Events. If we fail to meet our obligations under the terms of the 10% Convertible Note, it will become immediately due and payable and subject to penalties provided for within the note.

·   Piggy-Back Registration Rights. The holder of the 10% Convertible Note is entitled to Piggy-Back Registration Rights as provided for in the Piggy-Back Registration Rights Agreement provided for in Exhibit B to the Securities Purchase Agreement.

Dated - Issued in Fiscal Year 2016

During the year ended December 31, 2016, the Company issued a total Convertible Notes in the amount of $820,308 and warrants to purchase up to 450,755 shares of our common stock, with the following terms:

· Terms 6 - 18 months

· Annual interest rates ranging from 8% to 20%

· Convertible at the option of the holders either at issuance or 6 months from issuance.

·   Conversion prices are typically based on the discounted (20% - 25% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes are subject to adjustment to not convert in a value band, not lower than $4,000,000 to $6,000,000 or higher than $12,000,000 to $18,000,000, divided by the total number of shares of common stock outstanding immediately prior to the conversion date.

Dated - Issued in Fiscal Year 2017

During the six months ended June 30, 2017, the Company issued a total Convertible Notes in the amount of $475,000 with the following terms:

· Term 9 – 12 months

· Annual interest rate ranging from 1% to 18%

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· Convertible at the option of the holders either at issuance

· Conversion prices are typically based on the discounted (25% to 40% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Conversion price of certain notes are $0.04 per share.

· Original issue discount and Financing cost on note issuance at $52,500

Certain notes allow the Company to redeem the notes at rates ranging from 135% to 150% depending on the redemption date provided that no redemption is allowed after the 180th day.

The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock therefore the embedded conversion option is bifurcated once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature is recorded as a debt discount and amortized to interest expense over the term of the note.

The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes and warrants that became convertible as of June 30, 2017 and December 31, 2016 amounted to $709,734 and $2,577,652, respectively. During the six months ended June 30, 2017 and 2016, $232,045 and $330,562 of the value assigned to the derivative liability was recognized as a debt discount to the notes and warrants, $40,594 and $294,345 was recognized as a “day 1” derivative loss, respectively.

Conversion

During the six months ended June 30, 2017, convertible notes totaled $194,992 and $9,688 accrued interest were converted into 29,990,469 common shares with the recognition of gain on note conversion at $108,014.

Warrants

We accounted for the issuance of the Warrants in accordance with ASC 815 as a derivative (see Note 6).

Fiscal Year 2016

On March 28, 2016, the Company issued a Convertible Note in the amount of $250,000 and warrants to purchase up to 250,000 shares of our common stock. The warrants are exercisable into 250,000 shares of common stock, for a period of five years from issuance, at a price of $0.40 per share.

On September 12, 2016, the Company issued a Convertible Note in the amount of $101,511 and warrants to purchase up to 50,755 shares of our common stock. The warrants are exercisable into 50,775 shares of common stock, for a period of one year from issuance, at 120% of the lowest trading price during 20 trading day prior to the exercise date.

On September 12, 2016, the Company issued a Convertible Note in the amount of $150,000 of which $150,000 was received as of December 31, 2016, and warrants to purchase up to 75,000 shares of our common stock. The warrants are exercisable into 75,000 shares of common stock, for a period of one year from issuance, at 120% of the lowest trading price during 20 trading day prior to the exercise date.

On September 21, 2016, the Company issued Convertible Notes in the amount of $150,000 of which $150,000 was received as of December 31, 2016, and warrants to purchase up to 75,000 shares of our common stock. The warrants are exercisable into 75,000 shares of common stock, for a period of one year from issuance, at 120% of the lowest trading price during 20 trading day prior to the exercise date.

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Fiscal Year 2017

During the six months ended June 30, 2017, the Company issued a total of 3,136,500 stock warrants as follows:

· On January 30, 2017, the Company entered into a public relations agreement with an unaffiliated party with warrants to purchase up to 2,000,000 shares of common stock. The warrants are exercisable into 2,000,000 shares of common stock, for a period of 3 years, at a price of $0.25 per share. The 2,000,000 warrants are considered tainted and the Company has recorded the related derivative liability.

· On February 21, 2017, the Company entered into a consulting agreement with an unaffiliated party with warrants to purchase up to 1,000,000 shares of common stock. The warrants will be vested and can be exercised into 1,000,000 shares of common stock in 3 months from the agreement date by May 21 2017, for a period of three years from issuance, at a price of $0.02 per share. The related derivative liability for the 1,000,000 warrants will be recorded in May 2017 when they become tainted.

· On February 28, 2017, the Company entered into a share subscription agreement with an unaffiliated party with attached warrants to purchase up to 136,500 shares of common stock. The warrants are exercisable into 136,500 shares of common stock, for a period of two years from issuance, at a price of $0.02 per share. The 136,500 warrants are considered tainted and the Company has recorded the related derivative liabilities.

The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2017:

Warrants Outstanding						Warrants Exercisable
Number of		Weighted Average Remaining		Weighted Average		Number of		Weighted Average
Shares		Contractual life (in years)		Exercise Price		Shares		Exercise Price
	250,000		3.75	$	0.4000		250,000	$	0.4000
	75,000		2.18	$	0.0048		75,000	$	0.0048
	50,755		2.18	$	0.0048		50,755	$	0.0048
	75,000		2.20	$	0.0048		75,000	$	0.0048
	2,000,000		2.59	$	0.2500		2,000,000	$	0.2500
	1,000,000		0.65	$	0.0200		1,000,000	$	0.0200
	124,000		1.67	$	0.0200		124,000	$	0.0200
	12,500		1.67	$	0.0200		12,500	$	0.0200
	3,587,255			$	0.1739		3,587,255

A summary of activity during the six months ended June 30, 2017 as follows:

	Warrants Outstanding
			Weighted Average
	Shares		Exercise Price
Balances as of December 31, 2016		450,755	$	0.23
Granted		3,136,500		0.17
Exercised		-		-
Forfeited/canceled		-		-
Balances as of June 30, 2017		3,587,255	$	0.17

NOTE 6. DERIVATIVE LIABILITIES

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, ”Derivatives and Hedging,” and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

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The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2017. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note and warrants is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in June 30, 2017 and December 31, 2016:

	Six Months Ended		Year Ended
	June 30, 2017		December 31, 2016
Expected term	0.07 - 3.99 years		0.10 - 5.00 years
Expected average volatility	100% - 177 %		98% - 169 %
Expected dividend yield		-		-
Risk-free interest rate	0.67%-1.89 %		0.36% - 1.93 %

The following table summarizes the derivative liabilities included in the balance sheet at June 30, 2017:

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2016	$	2,577,652
Addition of new derivative liabilities upon issuance of convertible notes as debt discounts		161,255
Addition of new derivatives liabilities recognized as issuance of warrants as stock based compensation expense		30,196
Reduction of derivatives liabilities from conversion of convertible note to common shares		(224,526	)
Gain on change in fair value of the derivative liabilities		(1,834,843	)
Balance - June 30, 2017	$	709,734

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item. The following table summarizes the loss (gain) on derivative liability included in the income statement for the six months ended June 30, 2017 and 2016, respectively.

	Six Months Ended
	June 30,
	2017			2016
Day one loss due to derivative liabilities on convertible notes and warrants	$	40,594		$	294,345
Gain on change in fair value of the derivative liabilities		(1,875,437	)		(30,096	)
(Gain) loss on change in the fair value of derivative liabilities	$	(1,834,843	)	$	264,249

NOTE 7. RELATED PARTY CONSIDERATIONS

Management Agreements

Insight entered into Management Agreements with Berlisa B.V., Eagle Consulting LLC and Sterling Skies B.V. (entities that are owned by Messrs. Verweij, van Wijk and de Vries, executive officers of our company and related parties) on July 1, 2014 for a period of one year which expired on June 30, 2015 with a monthly fee of €7,500 per month.

The Company charged $248,138 and $250,520 during the six months ended June 30, 2017 and 2016, respectively to operations for the management fees stemming from these Management Agreements.

As of June 30, 2017, and December 31, 2016, the amount due to related parties was $457,548 and $296,816 and accrued interest on the payable amount of $35,148 and $9,172, respectively.

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NOTE 8. CONCENTRATIONS

The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the six months ended June 30, 2017 and 2016. In 2015 Insight Innovators decided to stop with consultancy and move forward as a product company.

	Six Months Ended			Six Months Ended
Customer	June 30, 2017			June 30, 2016
EU   PWN		57	%		100	%
EU   Computer Profile		6	%		-	%
US   NRECA		37	%		-	%

$23,089 of our total sales of $36,589 was generated in foreign countries by Insight during the six months ended June 30, 2017. All of our sales were generated in foreign countries by Insight during the six months ended June 30, 2016.

NOTE 9. STOCKHOLDERS’ DEFICIT

On June 8, 2017, the Company filed a Certificate of Amendment with the state of Nevada, to the Company’s Articles of Incorporation, to increase the number of authorized shares of capital stock to 2,010,000,000 shares. With 2,000,000,000 shares of common stock, par value $0.001 and 10,000,000 shares of preferred stock, par value $0.001

Preferred Stock

The Company has authorized 10,000,000 preferred shares with a par value of $0.001 per share. The Board of Directors is authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.

Series A Convertible Preferred Stock

The Company has designated 808,000 shares of Series A Convertible Preferred Stock.

The designations, rights and preferences of the Series A Preferred include:

· the stated value of the Series A Preferred is $1.00 per share.

·   the shares have no voting rights, provided, however, that for so long as any shares are outstanding, we many not, without the affirmative vote of at least 51% of the then outstanding shares of the Series A Preferred, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred or alter or amend the Certificate of Designation, (b) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a liquidation (as defined) senior to, or otherwise in pari passu with, the Series A Preferred, (c) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders, (d) increase the number of authorized shares of Series A Preferred, or (e) enter into any agreement with respect to any of the foregoing.

· each share is convertible at the option of the holder based upon a conversion price of $0.1778 ($0.0296 per share post forward stock split), into shares of our common stock at any time. The rate of conversion is subject to adjustment as discussed below.

·   Upon our liquidation, dissolution or winding-up, the holders will be entitled to receive out of our assets, whether capital or surplus, an amount equal to the stated value per share, $1.00, plus any accrued and unpaid dividends thereon.

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·   the conversion price of the Series A Preferred is subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events by adjustment of the conversion price by its multiplication by a fraction the numerator of which is the number of shares of common stock outstanding immediately before such event, and the denominator of which is the number of shares outstanding immediately after such event.

·   If, at any time while the Series A Preferred is outstanding, the Company or any subsidiary, as applicable sells or grants any option to purchase or sells or grants any right to re-price, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any common stock or common stock equivalents entitling any person to acquire shares of common stock at an effective price per share that is lower than a conversion price then in effect for any of the Series A Preferred, as adjusted, then the conversion price for shares of Series A Preferred shall be reduced to equal the lower issuance price.

·   As long as any shares of Series A Preferred are outstanding, unless the holders of at least 51% in Stated Value of the then outstanding shares of such Series A Preferred shall have given prior written consent, the Corporation shall not, and shall not permit any Subsidiary to, directly or indirectly:   a) The Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents (or a combination of units thereof) involving a variable rate transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of common stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of common stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the common stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.

During the six months ended June 30, 2017, 105,946 shares of Series A Convertible Preferred Stock were converted into 3,579,256 shares of common stock.

As of June 30, 2017 and December 31, 2016, the Company had 94,333 and 200,279, respectively, shares of Series A Convertible preferred stock issued and outstanding, respectively.

Series B Preferred Stock

On May 11, 2017, the Company filed a certificate of designation, preferences and rights of Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to designate 1,500,000 shares of its previously authorized preferred stock as Series B Preferred Stock. The holders of shares of Series B Preferred Stock that are not entitled to dividends or distributions have the following voting rights:

· Each share of Series B Preferred Stock entitles the holder to 250 votes on all matters submitted to a vote of the Company’s stockholders. In the event that such votes do not total at least 51% of all votes, then the votes cast by the holders of the Series B Preferred Stock shall be equal to 51% of all votes cast at any meeting of the Company’s stockholders or any issue put to the stockholders for voting.

· Except as otherwise provided in the Certificate of Designation, the holders of Series B Preferred Stock, the holders of Company common stock and the holders of shares of any other Company capital stock having general voting rights and shall vote together as one class on all matters submitted to a vote of the Company’s stockholders.

· The holders of the Series B Preferred Stock do not have any conversion rights.

On May 12, 2017, the Company entered into investment agreements (the “Investment Agreements”) with three entities in which Arend D. Verweij, Geurt van Wijk and Remy de Vries, individuals who are either executive officers and directors or both of the Company, have a pecuniary interest in and exercise voting and dispositive control over. Pursuant to the terms of each of the respective Investment Agreements, the Company sold to each of the three entities 500,000 shares of the Series B Preferred Stock at a purchase price of $500 ($0.001 per share).

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Common Stock

The Company has authorized 2,000,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

During the six months ended June 30, 2017, the Company issued 34,934,725 shares of common stock, as follows:

· 1,365,000 shares of common stock issued for net proceeds of $27,300.

· 3,579,256 shares of common stock in a conversion of 105,946 shares of Series A Convertible Preferred Stock.

· 29,990,469 shares of common stock in a conversion of $194,992 of Convertible Notes and accrued interest $9,688 valued at $321,192 and the Company recorded a gain on extinguishment of debt of $108,014 during the six months ended June 30, 2017.

As at June 30, 2017 and December 31, 2016, the Company had 132,392,122 and 97,457,397 shares of common stock issued and outstanding, respectively.

NOTE 10. INCENTIVE STOCK PLANS

2015 Stock Option Grants

We granted stock options, which was adopted by our board of directors on December 21, 2015, provides for equity incentives to be granted to our employees, executive officers or directors.

During the year ended December 31, 2015 we issued options to purchase an aggregate of 8,173,686 shares of our unregistered common stock at a price of $.04893 per share for 1/3 of the shares, $.05873 per share for 1/3 of the shares, and $.06852 per share for 1/3 of the shares. The options had an aggregate value totaling $71,630 were issued to Messrs. Verweij, van Wijk and de Vries, executive officers of our company.

A summary of activity during the six months ended June 30, 2017 follows:

	Options Outstanding
			Weighted-		Fair Value
	Number of		Average		on Grant		Intrinsic
	Shares		Exercise Price		Date		Value
Balances as of December 31, 2016		8,173,686	$	0.0587	$	71,630	$	2,997
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited/canceled		-		-		-		-
Balances as of June 30, 2017		8,173,686	$	0.0587	$	71,630	$	-

The outstanding options have a weighted-average remaining contract term of 3.48 years. As of June 30, 2017, 5,449,124 options remain unvested.

One-third of the options granted vest at the end of the first, second and third year after the date of the award date of December 21, 2015. After vesting, the option generally can be exercised for the period remaining in the 5-year term from issuance date. Total compensation cost expected to be recognized for unvested options at June 30, 2017 amounted to $17,604. During the six months ended June 30, 2017 and 2016, the Company charged to operations stock based compensation expense of $9,875 and $21,684, respectively.

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The following table summarizes information relating to outstanding and exercisable stock options as of June 30, 2017:

Options Outstanding						Options Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
	8,173,686		3.48	$	0.0587		2,724,562	$	0.0489

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the stock options at June 30, 2017 for those stock options for which the quoted market price was in excess of the exercise price (“in-the-money options”). As of June 30, 2017, 2,724,562 options to purchase shares of common stock were exercisable and the intrinsic values of these options are $nil. As of June 30, 2017, the intrinsic value of 5,449,124 outstanding options is $nil, as these options to employees vest in the future periods.

NOTE 11. COMMITMENTS AND CONTINGENCIES

Rent commitment

Insight leases approximately 4,000 square feet of space at Nijverheidsweg Noord 78, 3812PM Amersfoort, The Netherlands. The terms of the lease require that Insight pay €1,500 per month (approximately $1,590 per month) on a month to month basis.

Total rent expenses for the six months ended June 30, 2017 and 2016 were $9,720 and $10,035, respectively. Total rent expenses for the three months ended June 30, 2017 and 2016 were $4,950 and $5,040, respectively.

Rent payable as of June 30, 2017 and December 31, 2016 amounted to $20,691 and $17,152, respectively and included under accounts payable in the consolidated balance sheet.

Employment Agreements

Arend D. Verweij. Under the terms of the December 21, 2015 employment agreement we entered into with Mr. Verweij, he agreed to serve as our Chief Executive Officer and Chairman of the board of directors for a period of two years, that term automatically renewable for one year periods thereafter unless notice by either of Mr. Verweij or us is provided to the other to the contrary within 30 days prior to the expiration of any such period. The employment agreement provides for, among other things, Mr. Verweij’s full time service in our U.S. offices, for a base annual salary in the amount of $180,000, subject to the possible increase at each anniversary thereof to be determined by a majority of the independent members of the board of directors in its discretion; provided, however, that Mr. Verweij’s annual salary will be increased to $252,000 upon our entry into fully executed contracts with at least three customers who are unrelated parties that have a minimum of 500 users of the software system being licensed by our subsidiary, Insight, and each of such three contracts are in full force and effect.

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Additionally, Mr. Verweij is eligible to receive a performance bonus during each year of employment of up to 100% of the base salary. The award of each year’s performance bonus, if any, is to be based upon certain performance criteria specified in the employment agreement and to be further determined by a majority of the independent members of the board of directors or a compensation committee to be made up of at least a majority of independent members appointed by the board or directors. Moreover, Mr. Verweij will receive a stock option grant entitling him to purchase an aggregate of 3,065,130 shares of our common stock which vests one-third on each of the three anniversary dates of his employment, but only if he is still in our employ on the date of vesting. The exercise prices of the option shares as to one third their number on their three respective vesting anniversaries are $0.04893, $0.05873 and $0.06852 per share. The number of unvested option shares available as of a given time during his employ are subject to appropriate adjustment in the event we undertake or undergo, as applicable, a stock split, reverse stock split, merger, recapitalization and similar transactions, and should Mr. Verweij cease to be in our employ, except for under certain specified circumstances, he will have one month to exercise vested options or otherwise they will become void. Those certain specified circumstances are his termination by us without cause, his termination for good reason, or his termination by reason of a change in control.

Further, Mr. Verweij shall be entitled to five weeks’ paid vacation, as well as in respect of all conventional holidays, a $1,500 monthly health insurance allowance, reimbursement of his out of pocket expenses incurred in connection with his employment, and such other perquisites and benefits as are or as may be made available to other of our executive employees. As of the date of this report, the board of directors has not established a complete set of performance benchmarks for purposes of determining bonuses payable to Mr. Verweij or other of our executives.

If Mr. Verweij’s employment is terminated by us, for cause, or by Mr. Verweij without good reason, he shall be entitled to be paid his accrued salary through, and earned but unused compensated absence time as of, the date of termination, but all remaining unvested stock options will be immediately forfeited by him.

Should we terminate Mr. Verweij’s employment without cause, or should he terminate the same for good reason, he shall be entitled to (i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

Finally, during the term of his employment and for a period of (i) one year thereafter if we terminate his employment without cause or he terminates his employment for good reason or (ii) two years otherwise, Mr. Verweij agreed to not engage in any competitive business or activities anywhere in the world, and during and subsequent to his employment, he has agreed to keep certain of our important or sensitive information confidential.

Geurt van Wijk. Under the terms of the December 21, 2015 employment agreement we entered into with Mr. van Wijk, he agreed to serve as our Chief Operating Officer for a period of two years, that term automatically renewable for one year periods thereafter unless notice by either of Mr. van Wijk or us is provided to the other to the contrary within 30 days prior to the expiration of any such period. The employment agreement provides for, among other things, Mr. van Wijk’s full time service from our offices in the Netherlands, for a base annual salary equal to EURO 120,000, subject to the possible increase at each anniversary thereof to be determined by a majority of the independent members of the board of directors in its discretion; provided, however, that Mr. van Wijk’s annual salary will be increased to EURO 150,000 upon our entry into fully executed contracts with at least three customers who are unrelated parties that have a minimum of 500 users of the software system being licensed by our subsidiary, Insight, and each of such three contracts are in full force and effect.

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Additionally, Mr. van Wijk is eligible to receive a performance bonus during each year of employment of up to 75% of the base salary. The award of each year’s performance bonus, if any, is to be based upon certain performance criteria specified in the employment agreement and to be further determined by a majority of the independent members of the board of directors or a compensation committee to be made up of at least a majority of independent members appointed by the board or directors. Moreover, Mr. van Wijk will receive a stock option grant entitling him to purchase an aggregate of 2,554,278 shares of our common stock which vest one-third on each of the three anniversary dates of his employment, but only if he is still in our employ on the vesting dates. The exercise prices of the option shares as to one third their number on their three respective vesting anniversaries are $0.04893, $0.05873 and $0.06852 per share. The number of unvested option shares available as of a given time during his employ are subject to appropriate adjustment in the event we undertake or undergo, as applicable, a stock split, reverse stock split, merger, recapitalization and similar transactions, and should Mr. van Wijk cease to be in our employ, except for under certain specified circumstances, he will have one month to exercise vested options or otherwise they will become void. Those certain specified circumstances are his termination by us without cause, his termination for good reason, or his termination by reason of a change in control.

Further, Mr. van Wijk shall be entitled to five weeks’ paid vacation, as well as in respect of all conventional holidays, a EURO 1,350 monthly vehicle allowance, which will stop when his annual base salary reaches EURO 150,000, reimbursement of his out of pocket expenses incurred in connection with his employment, and such other perquisites and benefits as are or as may be made available to other of our executive employees. As of the date of this report, the board of directors has not established a complete set of performance benchmarks for purposes of determining bonuses payable to Mr. van Wijk or other of our executives.

If Mr. van Wijk’s employment is terminated by us, for cause, or by Mr. van Wijk without good reason, he shall be entitled to be paid his accrued salary through, and earned but unused compensated absence time as of, the date of termination, but all remaining unvested stock options will be immediately forfeited by him.

Should we terminate Mr. van Wijk’s employment without cause, or should he terminate the same for good reason, he shall be entitled to (i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

Finally, during the term of his employment and for a period of (i) one year thereafter if we terminate his employment without cause or he terminates his employment for good reason or (ii) two years otherwise, Mr. van Wijk agreed to not engage in any competitive business or activities anywhere in the world, and during and subsequent to his employment, he has agreed to keep certain of our important or sensitive information confidential.

Remy de Vries. As of December 21, 2015, we entered additionally into an employment agreement with Mr. de Vries to serve as our Chief Technology Officer for a period of two years, that term automatically renewable for one year periods thereafter unless notice by either of Mr. de Vries or us is provided to the other to the contrary within 30 days prior to the expiration of any such period. The employment agreement provides for, among other things, Mr. de Vries’ full time service from our offices in the Netherlands, for a base annual salary equal to EURO 120,000, subject to the possible increase at each anniversary thereof to be determined by a majority of the independent members of the board of directors in its discretion; provided, however, that Mr. de Vries’ annual salary will be increased to EURO 150,000 upon our entry into fully executed contracts with at least three customers who are unrelated parties that have a minimum of 500 users of the software system being licensed by our subsidiary, Insight, and each of such three contracts are in full force and effect.

Additionally, Mr. de Vries is eligible to receive a performance bonus during each year of employment of up to 75% of the base salary. The award of each year’s performance bonus, if any, is to be based upon certain performance criteria specified in the employment agreement and to be further determined by a majority of the independent members of the board of directors or a compensation committee to be made up of at least a majority of independent members appointed by the board or directors. Moreover, Mr. de Vries will receive a stock option grant entitling him to purchase an aggregate of 2,554,278 shares of our common stock which vest one-third on each of the anniversary dates of his employment, but only if he is still in our employ on the vesting date. The exercise prices of the option shares as to one third their number on their three respective vesting anniversaries are $0.04893, $0.05873 and $0.06852 per share. The number of unvested option shares available as of a given time during his employ are subject to appropriate adjustment in the event we undertake or undergo, as applicable, a stock split, reverse stock split, merger, recapitalization and similar transactions, and should Mr. de Vries cease to be in our employ, except for under certain specified circumstances, he will have one month to exercise vested options or otherwise they will become void. Those certain specified circumstances are his termination by us without cause, his termination for good reason, or his termination by reason of a change in control.

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Further, Mr. de Vries shall be entitled to five weeks’ paid vacation, as well as in respect of all conventional holidays, a EURO 1,350 monthly vehicle allowance, which will stop when his annual base salary reaches EURO 150,000, reimbursement of his out of pocket expenses incurred in connection with his employment, and such other perquisites and benefits as are or as may be made available to other of our executive employees. As of the date of this report, the board of directors has not established a complete set of performance benchmarks for purposes of determining bonuses payable to Mr. de Vries or other of our executives.

If Mr. de Vries’ employment is terminated by us, for cause, or by Mr. de Vries without good reason, he shall be entitled to be paid his accrued salary through, and earned but unused compensated absence time as of, the date of termination, but all remaining unvested stock options will be immediately forfeited by him.

Should we terminate Mr. de Vries’ employment without cause, or should he terminate the same for good reason, he shall be entitled to (i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

Finally, during the term of his employment and for a period of (i) one year thereafter if we terminate his employment without cause or he terminates his employment for good reason or (ii) two years otherwise, Mr. de Vries agreed to not engage in any competitive business or activities anywhere in the world, and during and subsequent to his employment, he has agreed to keep certain of our important or sensitive information confidential.

Litigation

From time to time we may be a defendant and/or plaintiff in various other legal proceedings arising in the normal course of our business. We are currently not a party to any material legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, we are not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations. Furthermore, as of the date, our management is not aware of any proceedings to which any of our directors, officers, or affiliates, or any associate of any such director, officer, affiliate, or security holder is a party adverse to our company or has a material interest adverse to us.

NOTE 12. SUBSEQUENT EVENTS

Amendments to Convertible Promissory Notes

On July 10, 2017 (the “Effective Date”), the Company entered into amendments (the “Amendments”) with the owners and holders of the following convertible promissory notes issued by the Company (the “Convertible Notes”):

· Secured Convertible Promissory Note in the original principal amount of $75,000 issued by the Company on September 21, 2016 to Summit Trading, Ltd. (“Summit Trading”);

· Convertible Promissory Note in the original principal amount of $250,000 issued by the Company on March 28, 2016 to Susannah Forest;

· Convertible Promissory Note in the original principal amount of $500,000 issued by the Company on December 18, 2015 to Susannah Forest;

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· 10% Convertible Subordinated Promissory Note in the original principal amount of $62,500 issued by the Company on May 16, 2016 to Monbridge, Inc. (“Monbridge”);

· Secured Convertible Promissory Note in the original principal amount of $75,000 issued by the Company on September 21, 2016 to Monbridge;

· Secured Convertible Promissory Note in the original principal amount of $150,000 issued by the Company on September 12, 2016 to Taconic Group, LLC (“Taconic”); and

· Secured Convertible Promissory Note in the original principal amount of $101,511 issued by the Company on September 12, 2016 to R&T Sports Marketing, Inc.

The Amendments extend the maturity date for each of the Convertible Notes to six months from the Effective Date and, so long as the Convertible Note is not in default, the Company has the right to extend its Maturity Date for an additional period of six months. The Amendments also revise the conversion price under the Convertible Note to mean 50% multiplied by the lowest trading price for the Company’s Common Stock during the twenty trading day period prior to the date of conversion. In the event that shares of the Company’s Common Stock are not deliverable via DWAC following the conversion of any amount under the Convertible Note, the holder shall be entitled to an additional 10% discount. The Company agreed to increase the number of authorized shares of its Common Stock covenants that within 30 days from the Effective Date to an amount that will allow it to and keep available out of its authorized and unissued shares a number of shares of Common Stock at least equal to two times the number of shares of common stock issuable upon conversion of the entire principal amount plus accrued interest due under the Convertible Notes.

The $150,000 Convertible Note held by Taconic and the $75,000 principal amount Convertible Note held by Monbridge were each increased by $60,000 to include liquidated damages due to the holders of such convertible notes as a result of the Company’s failure to deliver shares of its Common Stock for more than 30 days as provided for in the Convertible Notes held by such holder.

Termination of Stock Pledge and Security Agreement

The Amendments terminate a stock pledge agreement whereby the Company’s executive officers and directors had pledged their shares of the Company’s common stock as collateral for certain of the Convertible Notes and terminated an intellectual property security agreement whereby the Company had pledged all of its intellectual property as collateral for certain of the Convertible Notes. As a result of these terminations, none of the Convertible Notes are secured. Further, the holders of the Convertible Notes agreed to forbear from exercising any of their respective rights or remedies under the Convertible Notes as a result of any breach by the Company under the Convertible Note.

Summit Note

On July 10, 2017, the Company issued to Summit Trading a Convertible Promissory Note (the “Summit Note”) in the principal amount of $61,000, in exchange for Summit Trading’s cancellation of (i) a Promissory Note in the principal amount of $51,000, plus accrued interest, issued by the Company to Summit Trading on December 30, 2016, plus accrued interest and (ii) a Promissory Note in the principal amount of $10,000, plus accrued interest, issued by the Company to Summit on January 26, 2017. The Summit Note contains terms and conditions substantially similar to the convertible notes held by Monbridge as amended by the Amendment discussed above except that such note bears interest at the rate of 20% per annum and matures twelve (12) months from the date of issuance.

Securities Exchange Agreement

On July 10, 2017, the Company issued to Taconic Group, LLC (“Taconic”) a Convertible Promissory Note in the principal amount of $94,333 (the “Taconic Note”) in exchange for 94,333 shares of the Company’s Series A Preferred Stock held by Taconic. The Taconic Note bears interest at the rate of 20% per annum and matures twelve (12) months from the date of issuance. The conversion price under the Taconic Note to mean 60% multiplied by the lowest trading price for the Company’s Common Stock during the twenty trading day period prior to the date of conversion. In the event that shares of the Company’s Common Stock are not deliverable via DWAC following the conversion of any amount under the Taconic Note, the holder shall be entitled to an additional 10% discount. The Company agreed to increase the number of authorized shares of its Common Stock covenants that within 30 days from the Effective Date to an amount that will allow it to and keep available out of its authorized and unissued shares a number of shares of Common Stock at least equal to two times the number of shares of common stock issuable upon conversion of the entire principal amount plus accrued interest due under the Taconic Notes. The Taconic Note contains terms and conditions substantially similar to other convertible notes issued by the Company on July 10, 2017 except as noted above.

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Power Up Lending Note

On August 2, 2017 (the “Issue Date”), the Company issued a Convertible Promissory Note to an unrelated third party investor in the principal amount of $28,000 (the “August 2017 Note”). The August 2017 Note bears interest at the rate of 12% per annum. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-two (22%) per annum. The principal amount of the August 2017 Note and interest are payable on May 15, 2018 (the “Maturity Date”).

Under the terms of the August 2017 Note, the Investor is entitled to, at any time beginning 180 days following the date of the August 2017 Note, convert the principal balance and any accrued interest (the “Amount Due”) into shares of the Company’s Common Stock, at a conversion price per share equal to 60% of the trading price for its Common Stock during the 20 trading day period prior to conversion, upon the terms and subject to the conditions of the August 2017 Note. The conversion price of the August 2017 Note is subject to adjustment in the event of stock splits, stock dividends and similar corporate events. The August 2017 Note contains representations, warranties, events of default, beneficial ownership limitations, prepayment options, and other provisions that are customary of similar instruments.

The August 2017 Note is not convertible to the extent that (a) the number of shares of our common stock beneficially owned by the Investor and (b) the number of shares of our common stock issuable upon the conversion of the August 2017 Note or otherwise would result in the beneficial ownership by Investor of more than 4.99% of our then outstanding common stock. This ownership limitation can be increased or decreased to any percentage not exceeding 9.99% by the Investor upon 61 days notice to us.

The August 2017 Note may be prepaid upon payment of the following optional prepayment amounts: 110% of the Amount Due during the period beginning on the Issue Date and ending 30 days thereafter, 115% of the total of the Amount Due during the period beginning 31 days after the Issue Date and ending 60 days after the Issue Date, 120% of the total of the Amount Due during the period beginning 61 days after the Issue Date and ending 90 days after the Issue Date, 125% of the total of the Amount Due during the period beginning 91 days after the Issue Date and ending 120 days after the Issue Date, 130% of the Amount Due interest during the period beginning 121 days after the Issue Date and ending 150 days after the Issue Date, or 135% of the Amount Due during the period beginning 151 days after the Issue Date and ending 180 days after the Issue Date. After 180 days after the Issue Date, the August 2017 Note may not be prepaid.

Issuance of Common Stock

Subsequent to June 30, 2017, the Company issued 11,854,813 shares of common stock for the conversion of convertible notes in the principal amount of $21,988.

 

 

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ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and associated notes appearing elsewhere in this Report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by any forward-looking statements as a result of various factors, including the risks and uncertainties described under “Risk Factors.”, as set forth in our Annual Report on Form 10-K filed with the SEC on March 31, 2017.

Accounting Periods. We define our accounting periods as follows:

· “2016”-January 1, 2016 through December 31, 2016,

· “second quarter of 2016”- April 1, 2016 through June 30, 2016,

· “2017”-January 1, 2017 through December 31, 2017,

· “second quarter of 2017”- April 1, 2017 through June 30, 2017.

Company Overview

We are an enterprise software company that has developed and launched implementation and sales in 2016 of a next generation identity and access management (“IAM”) enterprise solution into a demand driven market. IAM is a solution that helps end-users to ensure that access across multiple technological environments is granted only to the right individuals. IAM solutions provide secure, identity-based access to various systems, applications, and information from any location. Thus, IAM solutions minimize the risk of fraudulent activities, thereby preventing the misuse of data. IAM solutions are being widely adopted by large and medium-scale enterprises as well as government departments.

Our flagship product - IDdriven - is designed to manage large volumes of users and access rights over various applications in hybrid environments (cloud and on-premise). IDdriven is a superior, next-gen hybrid cloud-based solution and the new state of the art software delivered as a service (Software as a Service or “SaaS”). It is dynamic, seamless, scalable, and flexible with the widest array of features. Its plug & play functionality enables a new, untapped small and medium-sized enterprises (SME) marketplace.

Marketing Strategy

We use different marketing channels to reach two different categories of customer:

· Small & Medium Enterprises (SME) (<500 subscribers) - via reseller channels and

· Large companies (500+) via channel partners.

We are a cost-effective SaaS solution suitable to companies in all industries of any size. SME’s will be able to download IDdriven and pay with a credit card to capitalize on the program’s simple, plug & play installation. Large companies typically use a channel partner for a more sophisticated implementation to utilize IDdriven’s advanced features not needed by SME’s.

Utilizing the relationships of our senior management with the Microsoft Product Group since 2010, we continue to build our brand within the IAM industry. We also work with our partners and customers for joint news releases and case studies. We will continue our internal marketing activities, including following editorial calendars of various trade and vertical publications, seeking speaking engagements for our CEO, and publishing industry articles.

Business Update

We have been steadily building out our IAM solution and infrastructure. In October 2016 we released upgrades to IDdriven’s original suite of industry leading functions that included role-based and zone-based access control, authorization management, certification and reporting. The new release also included the following new functionality, parts of had been incorporated incrementally since the last summer and are already in active customer use: 1) enhanced account management; 2) ability to configure roles using built-in visual tools; 3) upgraded graphic user interface; and 4) setting role hierarchy.

We continue to build up our distribution channel with our existing marketing and implementation partners as well as our customer enterprise pipeline and customer base. The enterprise sales cycle has been longer than forecasted, but we are starting to see results as we build our pipeline of prospect. We also have recently introduced the small and medium enterprise market which we expect to have a shorter sales cycle. Cybersecurity, data protection and employee access has been getting more and more attention due to increasing threats to data networks. Our IDdriven enterprise solution continues to address these increasing needs.

We continue to see a gradual rise in users on a sequential basis and on a comparative quarterly basis as we see momentum building in our current user base as customer’s complete systems testing and move into the implementation phase of their use of our IAM solution.

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Our History

We were incorporated in Nevada on January 27, 2014 under the name TiXFi, Inc. and engaged in buying and reselling tickets to end users. Insight Innovators B.V., was incorporated on May 22, 2013 in the Netherlands and has its registered corporate seat in Amersfoort, The Netherlands. On December 21, 2015, we completed a reverse merger with Insight Innovators, pursuant to which we issued 55,980,000 shares of our unregistered common stock to the shareholders of Insight Innovators in exchange for 40,074 shares of its common stock, representing 100% of its issued and outstanding common stock (the “Share Exchange”) and assumed $46,000 of Insight’s debts. In conjunction with the Share Exchange, we purchased 12,000,000 shares of our common stock from Paula Martin, our former Chief Executive Officer and sole director, for a price of approximately $0.0125 per share (an aggregate of $150,000) pursuant to the terms of a Stock Redemption Agreement dated December 21, 2015 (the “Stock Redemption Agreement”). In addition, Ms. Martin acquired all assets and liabilities related our online ticket brokerage business in exchange for the cancellation by Ms. Martin of 18,000,000 shares of our common stock she held. Following this transaction, Insight Innovators became a wholly owned subsidiary of our company. Thereafter, we changed our name from TiXFi, Inc. to IDdriven, Inc. After the reverse merger, we continued Insight Innovator’s historical and proposed business.

Recent Events

On June 30, 2017, our board of directors unanimously approved an amendment to our amended and restated articles of incorporation (the “Restated Articles”), to increase our authorized Common Stock, par value $.001 per share, from 2,000,000,000 to 10,000,000,000 shares (the “Share Increase”). The Share Increase is hereinafter referred to as the “Amendment.” Subsequent to our board of directors’ approval of the Amendment, the holders of a majority of the voting power of our voting stock approved, by written consent, the Amendment on July 28, 2017. The consenting stockholders who are comprised of members of our executive officers and directors and their approximate ownership percentage of our voting stock as of June 30, 2017, which total in the aggregate 83.9% of the voting rights under our Restated Articles. On August 2, 2017, we filed a Preliminary Information Statement with the SEC as a result our shareholder consent.

Pursuant to Rule 14c-2 promulgated under the Exchange Act, the Amendment will not be effected until at least 20 calendar days after the mailing of an Information Statement to our stockholders. The Amendment will be effective after the expiration of such 20-day period, at such time as a certificate of amendment to our Restated Articles is filed with the Secretary of State of Nevada.

Results of Operations for the Six Months Ended June 30, 2017 Compared to the Six Months Ended June 30, 2016

The following comparative analysis on results of operations was based primarily on the comparative unaudited condensed consolidated financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report.

Overview

The beginning of 2017 shows the build-up of recurring revenues of our SaaS platform, with our initial customers starting to move to the next phase of their utilization of our IAS solution.

For the six months of 2017, we have generated losses from operations. As of June 30, 2017, our accumulated deficit was $4,530,844. Our loss from operations for the six months ended June 30, 2017 and 2016 was $738,889 and $1,025,844, respectively. Our cash used in operations was $385,408 and $648,437 for the six months ended June 30, 2017 and 2016, respectively. Our Stockholders’ deficit was $2,935,933 and $4,000,622 as of June 30, 2017 and December 31, 2016, respectively.

 

	June 30,		December 31,		Change
	2017		2016		Amount		%
Cash and cash equivalents	$	12,174	$	13,174	$	(1,000)	(8%)
Total Assets	$	57,049	$	58,341	$	(1,292)	(2%)
Total Liabilities	$	2,992,982	$	4,058,963	$	(1,065,981)	(26%)
Stockholders’ Deficit	$	(2,935,933)	$	(4,000,622)	$	(1,064,689)	(27%)

 

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Revenue

	Six Months Ended
	June 30,				Change
	2017		2016		Amount		%
Revenue	$	36,589	$	6,973	$	29,616		425%

We recorded net consolidated revenue of $36,589 for the six months of 2017, compared to $6,973 for the six months of 2016, an increase of $29,616, or 425%. The increase in revenue is directly related to the recurring revenue build-up of customers on our SaaS platform.

Operating Expenses

	Six Months Ended
	June 30,					Change
	2017		2016			Amount	%
General and administration	$	319,021	$	464,490	$	(145,469)	(31%)
Salaries and wages		99,911		190,803		(90,892)	(48%)
Stock based compensation		40,071		61,684		(21,613)	(35%)
Research and development		60,225		62,647		(2,422)	(4%)
Management fees		248,138		250,520		(2,382)	(1%)
Depreciation		2,112		2,673		(561)	(21%)
	$	769,478	$	1,032,817	$	(263,339)	(25%)

Operating expenses were $769,478 for the six months of 2017, compared to $1,032,817 for the six months of 2016, a decrease of $263,339, or 25%. The decrease in operating expenses was largely due to decrease in general and administration expenses primarily attributed to decreased consulting fees, stock based compensation for consulting services, stock option vesting expenses and salary and wages which we implemented in light of our current working capital needs.

Loss from Operations

	Six Months Ended
	June 30,						Change
	2017			2016			Amount		%
Loss from Operations	$	(738,889	)	$	(1,025,844	)	$	286,955		(28%)

Loss from operations decreased to $738,889 for the six months of 2017, compared to a loss of $1,025,844 for the six months of 2016, a decrease of $286,955, or 28%. The change was a result of an increase in revenue and reduction in operating expenses discussed above.

Other Income (Expenses)

	Six Months Ended
	June 30,						Change
	2017			2016			Amount			%
Interest expense	$	(479,535	)	$	(121,966	)	$	(357,569	)		293	%
Change in fair value of derivative liability		1,834,843			(264,249	)		2,099,092			(794	)%
Gain on extinguishment of debt		108,014			-			108,014			-
Total other income (expense)	$	1,463,322		$	(386,215	)	$	1,849,537			(479	)%

Other income was $1,463,322 for the six months of 2017, compared to other expenses of $386,215 for the six months of 2016, an increase in other income of $1,849,537. The increase in other income was primarily from significant reduction in fair value of derivative liability related to our convertible notes and warrants and gain recognized from the conversion of notes to common shares during the six months of 2017.

  

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Net Income (Loss)

Six Months Ended
June 30,					Change
2017		2016			Amount		%
$	724,433	$	(1,412,059	)	$	2,136,492		(151%)

Net income was $724,433 for the six months of 2017, compared to net loss of $1,412,059 for the six months of 2016. The increase in net income of $2,136,492, was a result of other income from the change in fair value of derivative liability, gain on conversion of convertible notes, an increase in revenue and a reduction in operating expenses discussed above.

Our comprehensive income was $706,323 for the six months of 2017 compared to comprehensive loss $1,415,465 for the six months of 2016, as adjusted for unrealized foreign currency translation loss of $18,110 and $3,406, respectively. We recognize foreign currency translation adjustments due to our wholly owned subsidiary (Insight Innovator’s) functional currency being the Euro and our reporting currency being the U.S. Dollar.

For the Three Months Ended June 30, 2017 Compared to the Three Months Ended June 30, 2016

Revenue

	Three Months Ended
	June 30,				Change
	2017		2016		Amount		%
Revenue	$	18,356	$	5,241	$	13,115		250	%

We recorded net consolidated revenue of $18,356 for the three months of 2017, compared to $5,241 for the three months of 2016, an increase of $13,115, or 250%. The increase in revenue is directly related to the recurring revenue build-up of customers on our SaaS platform.

Operating Expenses

	Three Months Ended
	June 30,				Change
	2017		2016		Amount			%
General and administration	$	191,339	$	304,650	$	(113,311	)	(37%)
Salaries and wages		46,469		95,841		(49,372	)	(52%)
Stock based compensation		11,887		10,842		1,045			10	%
Research and development		30,777		31,698		(921	)	(3%)
Management fees		125,690		125,968		(278	)	(0%)
Depreciation		1,065		1,287		(222	)	(17%)
	$	407,227	$	570,286	$	(163,059	)	(29%)

Operating expenses were $407,227 for the three months of 2017, compared to $570,286 for the three months of 2016, a decrease of $163,059, or 29%. The decrease in operating expenses was largely due to decrease in general and administration expenses primarily attributed to decreased consulting fees, stock based compensation for consulting services, stock option vesting expenses and salary and wages which we implemented in light of our current working capital needs.

Loss from Operations

	Three Months Ended
	June 30,						Change
	2017			2016				Amount	%
Loss from Operations	$	(394,871	)	$	(565,045	)	$	170,174	(30%)

Loss from operations decreased to $394,871 for the three months of 2017, compared to a loss of $565,045 for the three months of 2016, a decrease of $170,174, or 30%. The change was a result of an increase in revenue and reduction in operating expenses discussed above.

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Other Income (Expenses)

	Three Months Ended
	June 30,						Change
	2017			2016			Amount			%
Interest expense	$	(234,326	)	$	(98,385	)	$	(135,941	)		138	%
Change in fair value of derivative liability		(442,463	)		911,901			(1,354,364	)	(149%)
Gain on extinguishment of debt		38,625			-			38,625			-
Total other income (expense)	$	(638,164	)	$	813,516		$	(1,451,680	)	(178%)

Other expense was $638,164 for the three months of 2017, compared to other income of $813,516 for the three months of 2016, a decrease in other income of $1,451,680. The decrease in other income was primarily from a significant change in fair value of derivative liability related to our convertible notes and warrants.

Net Income (Loss)

	Three Months Ended
	June 30,					Change
		2017			2016	Amount			%
Net Income (Loss)	$	(1,033,035	)	$	248,471	$	(1,281,506	)	(516%)

Net loss was $1,033,035 for the three months of 2017, compared to net income of $248,471 for the three months of 2016. The decrease in net income of $1,281,506, was primarily a result of other expenses from the change in fair value of derivative liability, partially offset by a gain on conversion of convertible notes, an increase in revenue and a reduction in operating expenses.

Our comprehensive loss was $1,046,464 for the three months of 2017 compared to comprehensive income of $248,264 for the three months of 2016, as adjusted for unrealized foreign currency translation loss of $13,429 and $207, respectively. We recognize foreign currency translation adjustments due to our wholly owned subsidiary (Insight Innovator’s) functional currency being the Euro and our reporting currency being the U.S. Dollar.

Liquidity and Capital Resources

The following tables present selected financial information on our capital and cash flows as of and for the periods ended June 30, 2017, December 31, 2016 and June 30, 2016:

	June 30,		December 31,		Change
	2017		2016		Amount		%
Current Assets	$	36,025	$	36,924	$	(899)	(2%)
Current Liabilities		2,992,982		4,058,963		(1,065,981)	(26%)
Working Capital Deficiency	$	(2,956,957)	$	(4,022,039)	$	(1,065,082)	(26%)

	Six Months Ended
	June 30,						Change
	2017			2016			Amount
Cash Flows used in Operating Activities	$	(385,408	)	$	(648,437	)	$	263,029
Cash Flows used in Investing Activities		-			(1,458	)		1,458
Cash Flows provided by Financing Activities		398,146			668,600			(270,454	)
Foreign currency adjustment		(13,738	)		744			(14,482	)
Net (Decrease) Increase in Cash During Period	$	(1,000	)	$	19,449		$	(20,449	)

 

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As of June 30, 2017 and December 31, 2016 our current assets were $36,025 and $36,924, respectively. The Company does not believe its existing balances of cash and cash equivalents will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations and debt service over the next 12 months.

As of June 30, 2017, our working capital deficiency was $2,956,957, a decrease of $1,065,082 as compared to December 31, 2016 when we had a working capital deficiency of $4,022,039. The change in working capital during the six months of 2017 was primarily from a significant decrease in fair value of derivative liability related to our convertible notes and warrants by $1,867,918, from $2,577,652 as of December 31, 2016 to $709,734 as of June 30, 2017.

Net cash used in operating activities during the six months of 2017 decreased by $263,029 to $385,408, from $648,437 in the six months of 2016. The decrease was primarily due to increase in net income, partially offset by increases in change in fair value of derivative liabilities, amortization of debt discount and increase in accounts payable and accrued expenses.

Net cash used in investing activities for the six months of 2017 was $0 and the six months of 2016 was $1,458 for the purchase of equipment.

Cash flows from financing activities for the six months of 2017 were $398,146 as a result of $423,346 proceeds from issuance of notes payable and $27,300 proceeds from issuance of common stock offset with payment of financing costs of $52,500. During the six months of 2016 we had $668,600 cash flow provided by financing activities attributed to $436,100 proceeds from issuance of notes payable and $250,000 proceeds from preferred stock subscription offset with payment of finance costs of $17,500.

Capital Resources

We currently have limited cash resources on hand and our projected operating expenses and working capital needs exceed our income and cash resources. We do not have sufficient cash to carry out our operations over the next 12 months. As a result, capital raising has been and continues to be essential for our continued operations, ongoing sales and marketing efforts and further development of our IDdriven platform.

Effects of Inflation

For the periods for which financial information is presented, we do not believe that the current levels of inflation in the United States or Europe have had a significant impact on our operations.

Off Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not have any undisclosed borrowings or debt, and we have not entered into any synthetic leases. We are, therefore, not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships.

Application of Critical Accounting Policies

We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact on our business operations and any associated risks related to these policies are discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported or expected financial results.

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”). We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

 

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The material estimates for our company are that of the stock-based compensation recorded for options and warrants issue and the fair of embedded conversion options that are convertible into a variable amount of shares, and the income tax valuation allowance recorded for deferred tax assets. The fair values of options, warrants, and embedded conversion options are determined using the Black-Scholes option pricing model. We have no historical data on the accuracy of these estimates. The estimated sensitivity to change is related to the various variables of the Black-Scholes option pricing model stated below. The specific quantitative variables are included in the notes to the consolidated financial statements. The estimated fair value of options is recognized as expense on the straight-line basis over the options’ vesting periods. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model with the expected life, dividend yield, expected volatility, and risk-free interest rate weighted-average assumptions used for options and warrants granted. Expected volatility for 2017 and 2016 was estimated using the average historical volatility of three public companies offering services similar to ours. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the grant date. The expected life of options is based on the life of the instrument on grant date.

Basis of Accounting and Going Concern

Our unaudited condensed consolidated financial statements have been prepared on the accrual basis of accounting in conformity with GAAP. In addition, the accompanying unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. We generated accumulated losses of approximately $4.5 million through June 30, 2017 and have insufficient working capital and cash flows to support operations. These factors raise substantial doubt about our ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty.

Revenue and Expense Recognition

We recognize revenue when (1) persuasive evidence of an arrangement exists, (2) services have been rendered, (3) the fee is fixed or readily determinable, and (4) collectability is reasonably assured. We recognize revenue in accordance with ASC 605, “Revenue Recognition.” Determination of criteria (iii) and (iv) are based on management’s judgments regarding the fixed nature of the selling prices of the services delivered and the collectability of those amounts. The Company’s agreements do not include general rights of return and do not provide clients with the right to take possession of the software supporting the services being provided. As such, the agreements are accounted for as service contracts.

Revenues from the services rendered are recognized in proportion to the services delivered.

Any amount receivable or received, but unrecognized for revenue recognition purpose is recorded as deferred revenues.

Sales taxes collected from clients and remitted to governmental authorities where applicable are accounted for on a net basis and therefore are excluded from revenues in the statements of operations.

Stock-Based Compensation

ASC 718, “Compensation - Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity - Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Share-based expense totaled $40,071 and $61,684 for the Six Months Ended June 30, 2017 and 2016, respectively.

 

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Convertible Notes

Convertible notes are regarded as compound instruments, consisting of a liability component and an equity component. The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortized cost basis until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized as additional paid-in capital and included in equity, net of income tax effects, and is not subsequently remeasured. After initial measurement, they are carried at amortized cost using the effective interest method.

Derivative Financial Instruments

The fair value of an embedded conversion option that is convertible into a variable amount of shares and warrants that include price protection reset provision features are deemed to be “down-round protection” and, therefore, do not meet the scope exception for treatment as a derivative under ASC 815 “Derivatives and Hedging”, since “down-round protection” is not an input into the calculation of the fair value of the conversion option and warrants and cannot be considered “indexed to the Company’s own stock” which is a requirement for the scope exception as outlined under ASC 815.

The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

The Black-Scholes option valuation model was used to estimate the fair value of the conversion options. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options.

Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument.

Also, refer to Note 2 - Significant Accounting Policies and Note 6 - Derivative Liabilities in the unaudited condensed consolidated financial statements that are included in this Report.

Recent accounting pronouncements

For discussion of recently issued accounting pronouncements, please see Note 2 to the unaudited condensed consolidated financial statements included in this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company”, we are not required to provide the information under Item 3.

 

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ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls as of the end of the period covered by this report, June 30, 2017. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Arend D. Verweij, the certifying officer. Based upon that evaluation, our certifying officer concluded that as of the end of the period covered by this report, June 30, 2017, our disclosure controls and procedures are ineffective in timely alerting management to material information relating to us and required to be included in our periodic filings with the Securities and Exchange Commission (the “Commission”).

Our certifying officers further concluded that our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by the issuer in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and are also ineffective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow time for decisions regarding required disclosure.

Based on the evaluation described above, our certifying officers have concluded that, as of June 30, 2017, our disclosure controls and procedures were not effective because we did not maintain effective controls over certain aspects of the financial reporting process because we lacked a sufficient complement of accounting personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and there was an inadequate segregation of duties.

We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

Changes in Internal Controls Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting identified in connection with the evaluation of our controls performed during the three months ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

As a “smaller reporting company”, we are not required to provide disclosure under this Item 1A.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the three months ended June 30, 2017, the Company issued 25,347,744 shares of its unregistered common stock upon conversion of an aggregate of $109,442 principal amount of Convertible Notes and accrued interest of $3,664.

On July 10, 2017, the Company issued to Taconic Group, LLC (“Taconic”) a Convertible Promissory Note in the principal amount of $94,333 (the “Taconic Note”) in exchange for 94,333 shares of the Company’s Series A Preferred Stock held by Taconic.

These shares of our common stock and Convertible Promissory Note were issued in reliance on the exemption from registration provided by Sections 4(a)(2) and 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act“).

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

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ITEM 5. OTHER INFORMATION.

Securities Exchange Agreement

On July 10, 2017, the Company issued to Taconic Group, LLC (“Taconic”) a Convertible Promissory Note in the principal amount of $94,333 (the “Taconic Note”) in exchange for 94,333 shares of the Company’s Series A Preferred Stock held by Taconic pursuant to the terms of a Securities Exchange Agreement entered into between them on the date of issuance. The Taconic Note bears interest at the rate of 20% per annum and matures twelve (12) months from the date of issuance. The conversion price under the Taconic Note to mean 60% multiplied by the lowest trading price for the Company’s Common Stock during the twenty trading day period prior to the date of conversion. In the event that shares of the Company’s Common Stock are not deliverable via DWAC following the conversion of any amount under the Taconic Note, the holder shall be entitled to an additional 10% discount. The Company agreed to increase the number of authorized shares of its Common Stock covenants that within 30 days from the Effective Date to an amount that will allow it to and keep available out of its authorized and unissued shares a number of shares of Common Stock at least equal to two times the number of shares of common stock issuable upon conversion of the entire principal amount plus accrued interest due under the Taconic Notes. The Taconic Note contains terms and conditions substantially similar to other convertible notes issued by the Company on July 10, 2017 except as noted above.

Issuance of Convertible Note

On August 2, 2017 (the “Issue Date”), the Company issued a Convertible Promissory Note to an unrelated third party investor in the principal amount of $28,000 (the “August 2017 Note”). The August 2017 Note bears interest at the rate of 12% per annum. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-two (22%) per annum. The principal amount of the August 2017 Note and interest are payable on May 15, 2018 (the “Maturity Date”).

Under the terms of the August 2017 Note, the Investor is entitled to, at any time beginning 180 days following the date of the August 2017 Note, convert the principal balance and any accrued interest (the “Amount Due”) into shares of the Company’s Common Stock, at a conversion price per share equal to 60% of the trading price for its Common Stock during the 20 trading day period prior to conversion, upon the terms and subject to the conditions of the August 2017 Note. The conversion price of the August 2017 Note is subject to adjustment in the event of stock splits, stock dividends and similar corporate events. The August 2017 Note contains representations, warranties, events of default, beneficial ownership limitations, prepayment options, and other provisions that are customary of similar instruments.

The August 2017 Note is not convertible to the extent that (a) the number of shares of our common stock beneficially owned by the Investor and (b) the number of shares of our common stock issuable upon the conversion of the August 2017 Note or otherwise would result in the beneficial ownership by Investor of more than 4.99% of our then outstanding common stock. This ownership limitation can be increased or decreased to any percentage not exceeding 9.99% by the Investor upon 61 days notice to us.

The August 2017 Note may be prepaid upon payment of the following optional prepayment amounts: 110% of the Amount Due during the period beginning on the Issue Date and ending 30 days thereafter, 115% of the total of the Amount Due during the period beginning 31 days after the Issue Date and ending 60 days after the Issue Date, 120% of the total of the Amount Due during the period beginning 61 days after the Issue Date and ending 90 days after the Issue Date, 125% of the total of the Amount Due during the period beginning 91 days after the Issue Date and ending 120 days after the Issue Date, 130% of the Amount Due interest during the period beginning 121 days after the Issue Date and ending 150 days after the Issue Date, or 135% of the Amount Due during the period beginning 151 days after the Issue Date and ending 180 days after the Issue Date. After 180 days after the Issue Date, the August 2017 Note may not be prepaid.

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ITEM 6. EXHIBITS.

Exhibit No.	Description
3.3	Certificate of Designation of Series B Preferred Stock filed with the Nevada Secretary of State on May 11, 2017 (incorporated by reference to Exhibit 3.3 to the Company’s Form 10-Q filed on May 15, 2017).
10.1	Securities Purchase Agreement between IDdriven, Inc. and EMA Financial, LLC dated March 27, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on April 12, 2017).
10.2	10% Convertible Note in the principal amount of $168,500 issued by IDdriven, Inc. to EMA Financial, LLC dated March 27, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on April 12, 2017)
10.3	Securities Purchase Agreement between IDdriven, Inc. and Auctus Fund, LLC dated April 10, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on April 18, 2017)
10.4	Convertible Promissory Note in the principal amount of $168,500 issued by IDdriven, Inc. to Acuctus Fund, LLC dated April 10, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on April 18, 2017)
10.5	Securities Purchase Agreement between IDdriven, Inc. and Crown Bridge Partners, LLC dated April 10, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on May 8, 2017).
10.6	Convertible Promissory Note in the principal amount of $55,000 issued by IDdriven, Inc. to Crown Bridge Partners, LLC dated April 10, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on May 8, 2017).
10.7	Amendment #1 to the Securities Purchase Agreement and Convertible Promissory Note between IDdriven, Inc. and Crown Bridge Partners, LLC dated April 10, 2017 (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed on May 8, 2017).
10.8	Form of Investment Agreement between IDdriven, Inc. and purchasers of IDdriven, Inc. Series B Preferred Stock (incorporated by reference to Exhibit 10.8 to the Company’s Form 10-Q filed on May 15, 2017).
10.9	Form of Amendment to Convertible Promissory Note (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on May 15, 2017)
10.10	Convertible Promissory Note dated issued by IDdriven, Inc. to Summit Trading, Ltd. on July 10, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on May 15, 2017).
10.11*	Securities Exchange Agreement between IDdriven, Inc. and Taconic Group, LLC dated July 10, 2017.
31.1*	Section 302 Certificate of Chief Executive Officer and Chief Financial Officer.
32.1*	Section 906 Certificate of Chief Executive Officer and Principal Financial and Accounting Officer.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.INS*	XBRL Taxonomy Extension Calculation Linkbase Document
101.INS*	XBRL Taxonomy Extension Definition Linkbase Document
101.INS*	XBRL Taxonomy Extension Label Linkbase Document
101.INS*	XBRL Taxonomy Extension Presentation Linkbase Document

____________

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IDdriven, Inc.
Date: August 21, 2017	By:	/s/ Arend D. Verweij
		Arend D. Verweij
		Chief Executive Officer and Chief Financial Officer
		(Principal Executive Officer and Principal Financial and Accounting Officer)

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EX-10.11

EXHIBIT 10.11

SECURITIES EXCHANGE AGREEMENT

This SECURITIES EXCHANGE AGREEMENT (the “Agreement”), dated as of July 10, 2017, by and between IDdriven, Inc. (f/k/a TIXFI, INC.), a Nevada corporation, having a mailing address of 13355 Moss Rock Drive, Auburn, Sacramento, California 95602 (the “Company”) and Taconic Group, LLC (including its successors and assigns, the “Purchaser”).

WHEREAS:

A. The Company and the Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) and 3(a)(9) of the Securities Act of 1933, as amended (the “1933 Act”);

B. Purchaser holds 94,333 shares of the Company’s Series A convertible preferred stock, par value $0.001 per share (the “Series A Preferred Stock”);

C. The Company desires to issue and exchange with the Purchaser, upon the terms and conditions set forth in this Agreement, 94,333 shares of the Series A Preferred Stock in exchange for the Convertible Note, a copy of which is attached hereto as Exhibit A (the “Convertible Note”);

NOW THEREFORE, in consideration of the foregoing and of the agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Purchaser hereby agree as follows:

1. Exchange of Series A Preferred for the Convertible Note.

a. Purchase of Series A Preferred. Subject to the conditions therefor contained in this Agreement, as of the Closing Date (as defined below), the Company shall issue and exchange with the Purchaser, and the Purchaser shall exchange and accept delivery thereof from the Company the following:

(i) the Convertible Note, for and in consideration of cancellation of 94,333 shares of the Series A Preferred Stock with a Stated Value of $94,333.00 (the “Note Exchange Consideration”);

b. Form of Payment. As of the Closing Date (as defined below), the Purchaser shall tender for cancellation the Series A Preferred Stock as the Note Exchange Consideration in exchange for the Convertible Note. Upon the delivery by the Purchaser of the Note Exchange Consideration, the Company shall deliver a duly executed Convertible Note on behalf of the Company.

c. Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Sections 4 and 5 below, the date and time of the delivery, issuance and exchange of the Convertible Note pursuant to this Agreement (the “Closing Date”) shall be on the date hereof (the “Closing”).

2. Purchaser's Representations and Warranties. Purchaser represents and warrants to the Company that:

a. Investment Purpose. As of the date hereof, Purchaser is acquiring the Convertible Note, and any shares of Common Stock issuable upon conversion of or otherwise pursuant to the Convertible Note (the “Conversion Shares” or “Securities”), for her, his or its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, Purchaser does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to, a registration statement or an exemption under the 1933 Act.

1

b. Ownership, No Liens, Encumbrances or Hypothecations of Series A Preferred Stock. As of the date hereof there are no, and as of the Closing, there shall be no, liens, encumbrances or hypothecations of any kind whatsoever upon or in respect of the Series A Preferred Stock, which the Purchase owns and holds, and Purchaser acknowledges that upon Purchaser’s receipt of the Convertible Note upon tender of the Note Exchange Consideration, the Company is authorized to cancel the Series A Preferred Stock.

b. Accredited Investor Status. Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

c. Reliance on Exemptions. Purchaser understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and Purchaser's compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Securities.

d. Information. Purchaser and its advisors, if any, have been, and for so long as the Convertible Note remains outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company, and materials relating to the offer and sale of the Securities which have been requested by Purchaser or its advisors. Purchaser and its advisors, if any, have been, and for so long as the Convertible Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company regarding its businesses and affairs. Notwithstanding the foregoing, the Company has not disclosed to Purchaser any material nonpublic information regarding the Company or otherwise and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to Purchaser. Neither such inquiries nor any other due diligence investigation conducted by Purchaser or any of its advisors or representatives shall modify, amend or affect Purchaser' right to rely on the Company’s representations and warranties contained in Section 3 below.

e. Governmental Review. Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

f. Transfer or Re-sale. Purchaser understands that (i) the sale or resale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) Purchaser shall have delivered to the Company, at the cost of the Company, an opinion of counsel (which may be the Legal Counsel Opinion (as defined below)) that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of Purchaser who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, or (d) the Securities are sold pursuant to Rule 144, and Purchaser shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company.

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g. Legends. Purchaser understands that until such time as the Convertible Note, and upon conversion of the Convertible Note in accordance with the internal terms thereof, the Conversion Shares, have been registered under the 1933 Act or may be sold pursuant to Rule 144, Rule 144A under the 1933 Act or Regulation D without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A OR REGULATION S UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

h. Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of Purchaser, and this Agreement constitutes a valid and binding agreement of Purchaser enforceable in accordance with its terms.

i. Residency. Purchaser is a resident of the jurisdiction set forth immediately below Purchaser' name on the signature pages hereto.

3. Representations and Warranties of the Company. The Company represents and warrants to Purchaser that:

a. Issuance of Conversion Shares. The shares of the Company’s common stock into which the Convertible Note is convertible (the “Conversion Shares”), when issued, will be duly authorized and reserved for issuance and, upon conversion of the Convertible Note in accordance with its terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and, except for shareholder preemptive rights which the Company’s shareholders are entitled to under the law of the state of Nevada.

4. Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Convertible Note to Purchaser at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

a. Purchaser shall have executed this Agreement and delivered the same to the Company.

b. Purchaser shall have delivered the Note Exchange Consideration in accordance with Section 1(b) above.

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c. The Purchaser shall have delivered to the Company the Series A Preferred Stock and a duly executed stock power.

5. Conditions to Purchaser' Obligation to Purchase. The obligation of Purchaser hereunder to purchase the Convertible Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for Purchaser' sole benefit and may be waived by Purchaser at any time in her, his or its sole discretion:

a. The Company shall have executed this Agreement and delivered the same to Purchaser.

b. The Company shall have delivered to Purchaser the Convertible Note.

6. Governing Law; Miscellaneous.

a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in the state of Florida and Palm Beach County, Florida. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Agreement, the Convertible Note or any other agreement, certificate, instrument or document contemplated hereby or thereby. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement, the Convertible Note or any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

b. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. A facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or .pdf signature. Delivery of a counterpart signature hereto by facsimile or email/.pdf transmission shall be deemed validly delivery thereof.

c. Construction; Headings. This Agreement shall be deemed to be jointly drafted by the Company and Purchaser and shall not be construed against any person as the drafter hereof. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

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d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e. Entire Agreement; Amendments. This Agreement, the Convertible Note and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of Purchaser.

f. Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

g. Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Purchaser. The Company agrees to indemnify and hold harmless Purchaser and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

h. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

i. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

[This space intentionally blank. Signatures follow.]

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SECURITIES EXCHANGE AGREEMENT SIGNATURE PAGE

IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused this Agreement to be duly executed as of the date first above written.

IDdriven, Inc.		Taconic Group, LLC
By:	/s/ Arend Verweij	By:	/s/ Robert Grinberg
	Arend Verweij	Name:	Robert Grinberg
	Chief Executive Officer	Title:	Manager

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Exhibit A

Form of Convertible Note

Taconic Group, LLC

NEITHER THE ISSUANCE NOR SALE OF THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE (THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE NOTE AND THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE NOTE OR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE NOTE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE NOTE.

Principal Amount: $94,333.00 Issue Date: July10, 2017

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, IDdriven, Inc., a Nevada corporation (hereinafter referred to as “Borrower”), hereby promises to pay to the order of Taconic Group, LLC or its registered assigns (the “Holder”) the principal sum of $94,333.00, or such portion of the foregoing as has been advanced to Borrower as set forth below, together with interest from the date hereof at the rate of twenty percent (20%) per annum, at maturity or upon acceleration or otherwise, as set forth herein (this “Note”). Such interest shall accrue from the date of payment to Borrower as to each payment, and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

The consideration to the Borrower for this Note is the exchange of 94,333 shares of the Borrower’s Series A Preferred Stock with a Stated Value of $94,333.00 (the “Consideration”).

All references in this Note to the principal amount then due hereunder shall refer to the Consideration. The maturity date for the Note shall be twelve (12) months from the Issue Date (the “Maturity Date”), and is the date upon which the principal sum, as well as any accrued and unpaid interest and other fees relating to this Note, shall be due and payable. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein.

Any amount of principal or interest on this Note, which is not paid by the Maturity Date, shall bear interest at the rate of the lesser of (i) twenty-two percent (22%) and (ii) the highest rate allowed by law, per annum from the due date thereof until the same is paid (“Default Interest”). Default Interest shall commence accruing on the date that the applicable payment is not made as required herein and shall be computed on the basis of a 365-day year and the actual number of days elapsed.

All payments due hereunder (to the extent not converted into the Borrower’s common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and the shares of Common Stock issued upon conversion of this Note will, upon payment of the Conversion Price (as defined below) to the Borrower, not impose personal liability upon the holder thereof.

The following additional terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1 Conversion Right. The Holder shall have the right at any time to convert all or any part of the outstanding and unpaid principal amount and accrued and unpaid interest of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso in the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit "A" (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

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1.2 Conversion Price.

(a) Calculation of Conversion Price. The Conversion Price shall equal the Variable Conversion Price (as defined herein) (subject, in each case, to adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events that occur on or after the Issue Date) (also subject to adjustment as further described herein). The "Variable Conversion Price" shall mean 60% multiplied by the Market Price (as defined herein) (representing a discount rate of 40%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the closing bid price on the OTCQB, OTC Pink or applicable tier of the OTC Markets or other trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder in Holder’s sole discretion (i.e. Quote Stream), or if the OTCQB is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets. If the Trading Prices cannot be calculated for such security on such date in the manner provided above, the Trading Prices shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Prices are required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. In the event that shares of the Borrower’s Common Stock are not deliverable via DWAC following the conversion of any amount hereunder, an additional ten percent (10%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 50% assuming no other adjustments are triggered hereunder).

(b) Each time, while this Note is outstanding, the Borrower enters into a transaction structured in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), including but not limited to the issuance of new promissory notes or of a replacement promissory note (a “Section 3(a)(9) Transaction”), or into a transaction structured in accordance with, based upon, or related or pursuant to, in whole or in part, to Section 3(a)(10) of the Securities Act (a “Section 3(a)(10) Transaction”), in which any 3^rd party has the right to convert monies owed to that 3^rd party (or receive shares pursuant to a settlement or otherwise) at a discount to market greater than the Conversion Price in effect at that time (prior to all other applicable adjustments in this Note), then the Conversion Price shall be automatically adjusted to such greater discount percentage (prior to all applicable adjustments in this Note) until this Note is no longer outstanding. Each time, while this Note is outstanding, the Borrower enters into a Section 3(a)(9) Transaction, or Section 3(a)(10) Transaction, in which any 3^rd party has a look back period greater than the look back period in effect under the Note at that time (currently a twenty (20) Trading Day look back period as described in this Section 1.2(a) applies), then the Holder’s look back period shall automatically be adjusted to such greater number of days until this Note is no longer outstanding. The Borrower shall give written notice to the Holder, with the adjusted Conversion Price and/or adjusted look back period (each adjustment that is applicable due to the triggering event), within one (1) business day of an event that requires any adjustment described in the two immediately preceding sentences.

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1.3 Authorized Shares. The Borrower covenants that within 30 days from the Issue Date it will increase the number of authorized shares of its Common Stock to an amount that will allow it to keep available, during the period the conversion right exists under this Note, out of its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note (without regard to any limitations on conversion). The Borrower is required at all times to have authorized and reserved two times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”). For purposes of computing the Reserved Amount as of the Issue Date, the Market Price on the Trading Day prior to the Issue Date shall be used. The Reserved Amount shall be increased from time to time, but no less frequently than the end of each calendar quarter or within 10 days of demand by Holder, in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note. Within 30 days from the Issue Date and from time to time upon the Borrower’s making a determination of the Reserved Amount as provided for herein, the Borrower shall deliver to the Holder a share reservation agreement signed by the Borrower and its transfer agent in a form satisfactory to the Holder reflecting a Reserved Amount as provided for in this Section 1.3. If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2.

1.4 Method of Conversion.

(a) Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

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(c) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof.

(e) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

(f) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.

(g) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3, which failure shall be an Event of Default) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(g) are justified.

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1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Securities Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Securities Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an “accredited investor” (as defined in Rule 501(a) of the Securities Act). Except as otherwise provided (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Securities Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate or electronic book entry for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

“NEITHER THE OFFER, ISSUANCE OR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Securities Act, which opinion shall be accepted by the Borrower so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the Borrower does not accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S under the Securities Act, at the Deadline, and such opinion has, in the opinion of the Borrower’s counsel, been properly rendered, it will be considered an Event of Default pursuant to Section 3.2.

6

1.6 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10^th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower’s failure to convert this Note.

ARTICLE II. CERTAIN COVENANTS

2.1 Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.

2.2 Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default as set forth in Sections 3.1 through 3.13, inclusive, occur, then an “Event of Default” hereunder shall occur:

3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise, and such breach continues for a period of five (5) days after written notice thereof to the Borrower from the Holder.

3.2 Conversion and the Shares. The Borrower fails to reserve a sufficient amount of shares of common stock as required under the terms of this Note (including Section 1.3)(and such breach continues for a period of five (5) days after written notice thereof to the Borrower from the Holder, fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within five (5) business days of a demand from the Holder, either in cash or as an addition to the balance of the Note, and such choice of payment method is at the discretion of the Borrower.

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3.3 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.

3.4 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith, shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note.

3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

3.6 Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $25,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

3.8 Delisting of Common Stock. The Borrower shall fail to maintain the listing or quotation of the Common Stock on the OTC PINK or an equivalent replacement exchange, the Nasdaq Global Market, the Nasdaq Capital Market, the New York Stock Exchange, or the NYSE MKT.

3.9 Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act, and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

3.10 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.11 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

3.12 Financial Statement Restatement. The Borrower restates any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note.

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3.13 Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

3.15 Replacement of Transfer Agent. In the event that the Borrower replaces its transfer agent, and the Borrower fails to provide prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

3.16 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any other financial instrument, including but not limited to all convertible promissory notes, currently issued, or hereafter issued, by the Borrower, to the Holder (the “Other Agreements”), after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note, in which event the Holder shall be entitled to apply all rights and remedies of the Holder under the terms of this Note by reason of a default under said Other Agreement or hereunder.

3.17 No bid. At any time while this Note is outstanding, the lowest Trading Prices on the OTC PINK or other applicable principal trading market for the Common Stock is equal to or less than $0.0001.

In the event of an Event of Default, the Borrower shall pay to the Holder, in full satisfaction of Borrower’s obligations hereunder, an amount equal to 150% of the then outstanding principal amount due hereunder (including the principal amount advanced to Borrower hereunder and not subsequently converted under Article I or repaid by Borrower and accrued and unpaid interest thereon) plus Default Interest, if any, plus any amounts owed to the Holder pursuant to Section 1.4(g) (collectively, in the aggregate of all of the above, the “Default Sum”), and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

If the Borrower fails to pay the Default Sum within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Sum, the number of shares of Common Stock of the Borrower equal to the Default Sum divided by the Conversion Price then in effect, subject to issuance in tranches due to the beneficial ownership limitations contained in this Note.

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ARTICLE IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, facsimile, or electronic mail addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery, upon electronic mail delivery, or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower:

IDdriven, Inc.

13355 Moss Rock Drive

Auburn, California 95602

Attention: Arend Verweij, President

email: averweij@iddriven.com

With a copy, which shall not constitute notice, to:

Legal & Compliance, LLC

330 Clematis Street, Suite 217

West Palm Beach, FL 33401

E-mail: LAnthony@legalandcompliance.com

Attention: Laura Anthony, Esq.

If to the Holder:

Taconic Group, LLC

____________________________

E-mail:_______________________

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

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4.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws and shall be subject to the exclusive jurisdiction and venue of the state and/or federal courts located in Palm County, Florida; provided, however, Holder may, at the Holder’s sole option, elect to bring any action in any other jurisdiction. This provision is intended to be a “mandatory” forum selection clause and governed by and interpreted consistent with Florida law. The Company and Holder each hereby consents to the exclusive jurisdiction and venue of any state or federal court having its situs in said county, and each waives any objection based on forum non conveniens. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state and/or federal courts of Florida. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

4.8 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

4.9 Section 3(a)(10) Transactions. If at any time while this Note is outstanding, the Borrower enters into a Section 3(a)(10) Transaction, then a liquidated damages charge of 25% of the outstanding principal balance of this Note at that time, will be assessed and will become immediately due and payable to the Holder, either in the form of cash payment or as an addition to the balance of the Note, as determined by mutual agreement of the Borrower and Holder.

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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer as of the Issue Date.

IDdriven, Inc.
By:
	Arend Verweij, Chief Executive Officer

12

EXHIBIT A -- NOTICE OF CONVERSION

The undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of IDdriven, Inc., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of June ___, 2017 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

¨	The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	Name of DTC Prime Broker: __________________
	Account Number: _________________________
¨	The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:
	[___]
	e-mail: [___]
	Date of Conversion:                                                                ______________
	Applicable Conversion Price:                                                $_____________
	Number of Shares of Common Stock to be Issued
	Pursuant to Conversion of the Notes:                            ______________
	Amount of Principal Balance Due remaining
	Under the Note after this conversion:                            ______________
	By:_____________________________
	Name: [___]
	Date: ___________________________

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EX-31.1

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Arend D. Verweij, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 of IDdriven, Inc. (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition and results of operations of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 21, 2017

/s/ Arend D. Verweij

Arend D. Verweij

Chief Executive Officer

(Principal Executive Officer and Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

Certification of the Chief Executive Officer and Chief Financial Officer of IDdriven, Inc. pursuant to Section 906 of the Sarbanes Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of IDdriven, Inc. (the “Company”) for the quarterly period ended June 30, 2017 as filed with the Securities and Exchange Commission (the “Report”), I, Arend D. Verweij, Chief Executive Officer and Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 21, 2017	By:	/s/ Arend D. Verweij
		Arend D. Verweij
		Chief Executive Officer
		(Principal Executive Officer and Principal Financial and Accounting Officer)

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 17, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	IDdriven, Inc.
Entity Central Index Key	0001605024
Trading Symbol	iddr
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		144,246,935
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2

XML

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 12,174	$ 13,174
Accounts receivable	9,449	12,236
Other receivables and prepaid expenses	14,402	11,514
Total Current Assets	36,025	36,924
Property and equipment, net	2,949	4,769
Other assets	18,075	16,648
TOTAL ASSETS	57,049	58,341
Current Liabilities
Accounts payable (including related party payables of $20,691 and $17,152, respectively)	282,707	195,767
Accrued expenses	188,230	98,684
Accrued interest - related parties	35,148	9,172
Deferred revenue and customer deposits		7,500
Management fees payable - related parties	457,548	296,816
Other current liabilities	39,255	27,331
Convertible notes payable, net of unamortized debt discount of $273,136 and $414,118, respectively	1,177,180	756,191
Notes payable	61,000	51,000
Notes payable - related parties	42,180	38,850
Derivative liabilities	709,734	2,577,652
Total Current Liabilities	2,992,982	4,058,963
TOTAL LIABILITIES	2,992,982	4,058,963
Commitments and contingencies
Stockholders' Deficit
Common stock: 2,000,000,000 authorized; $0.001 par value 132,392,122 and 97,457,397 shares issued and outstanding, respectively	132,392	97,457
Additional paid in capital	1,495,162	1,171,625
Series B preferred stock subscription receivable	(1,500)
Accumulated deficit	(4,530,844)	(5,255,277)
Accumulated other comprehensive loss	(32,738)	(14,628)
Total Stockholders' Deficit	(2,935,933)	(4,000,622)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	57,049	58,341
Series A convertible preferred stock
Stockholders' Deficit
Preferred stock	95	$ 201
Series B Preferred Stock
Stockholders' Deficit
Preferred stock	$ 1,500

XML

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Related party payables (in dollars)	$ 20,691	$ 17,152
Unamortized debt discount (in dollars)	$ 273,136	$ 414,118
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares issued	132,392,122	97,457,397
Common stock, shares outstanding	132,392,122	97,457,397
Series A convertible preferred stock
Preferred stock, shares authorized	808,000	808,000
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, stated value per share (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, shares issued	94,333	200,279
Preferred stock, shares outstanding	94,333	200,279
Series B Preferred Stock
Preferred stock, shares authorized	1,500,000	1,500,000
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, stated value per share (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, shares issued	1,500,000	0
Preferred stock, shares outstanding	1,500,000	0

XML

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Revenues	$ 18,356	$ 5,241	$ 36,589	$ 6,973
Cost of sales	6,000		6,000
Gross profit	12,356	5,241	30,589	6,973
Operating Expenses
General and administration	191,339	304,650	319,021	464,490
Salaries and wages	46,469	95,841	99,911	190,803
Stock based compensation	11,887	10,842	40,071	61,684
Research and development	30,777	31,698	60,225	62,647
Management fees	125,690	125,968	248,138	250,520
Depreciation	1,065	1,287	2,112	2,673
Total operating expenses	407,227	570,286	769,478	1,032,817
Loss from operations	(394,871)	(565,045)	(738,889)	(1,025,844)
Other income (expense)
Interest expense	(234,326)	(98,385)	(479,535)	(121,966)
Change in fair value of derivative liability	(442,463)	911,901	1,834,843	(264,249)
Gain on extinguishment of debt	38,625		108,014
Total other (expense) income	(638,164)	813,516	1,463,322	(386,215)
Net (loss) income before taxes	(1,033,035)	248,471	724,433	(1,412,059)
Income tax benefit
Net (loss) income	(1,033,035)	248,471	724,433	(1,412,059)
Other comprehensive income (loss)
Foreign currency translation adjustment	(13,429)	(207)	(18,110)	(3,406)
Comprehensive (loss) income	$ (1,046,464)	$ 248,264	$ 706,323	$ (1,415,465)
Net (loss) income per common share, Basic and Diluted (in dollars per share)	$ (0.01)	$ 0.00	$ 0.01	$ (0.02)
Weighted average number of common shares outstanding, Basic and Diluted (in shares)	119,398,887	75,583,779	110,048,996	75,377,692

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Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 724,433	$ (1,412,059)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation	2,112	2,673
Stock-based compensation	40,071	61,684
Expenses paid by note payable		27,500
Amortization of debt discount and debt issue cost	354,736	87,994
Gain on extinguishment of debt	(108,014)
Change in fair value of derivative	(1,834,843)	264,249
Changes in operating assets and liabilities:
Accounts receivable	3,181	2,060
Prepaid expenses and other receivables	(2,400)	(9,121)
Accounts payable	133,878	246,876
Accrued interest	98,566	33,764
Accrued interest, related parties	25,976
Deferred revenue	(7,500)
Management fees, related parties	161,271
Other current liabilities	23,125	45,943
Net Cash Used in Operating Activities	(385,408)	(648,437)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(1,458)
Net Cash Used in Investing Activities		(1,458)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible note payable	413,346	325,000
Payment of financing cost	(52,500)	(17,500)
Proceeds from issuance of promissory notes payable	10,000	111,100
Proceeds from issuance of common shares	27,300
Proceeds from preferred stock subscription		250,000
Net Cash Provided By Financing Activities	398,146	668,600
Foreign currency translation effect on cash and cash equivalents	(13,738)	744
Net (decrease) increase in cash and cash equivalents	(1,000)	19,449
Cash and cash equivalents, beginning of period	13,174	48,764
Cash and cash equivalents, end of period	12,174	68,213
Supplemental cash flow information
Cash paid for interest
Cash paid for taxes
Supplemented disclosure of non-cash investing and financing activities
Derivative liability recognized as debt discount	161,255	330,562
Prepaid expense paid by note payable		17,500
Conversion of Series A Convertible Preferred Stock into common stock	3,580	1,890
Conversion of notes payable and accrued interest into common stock	204,680
Series B Preferred Stock subscription receivable	1,500
Convertible notes issued to settle accounts payable	30,000
Reclassification of derivative liability from additional paid in capital due to tainted instruments	$ 12,459
Common stock issued for debt discount		$ 100,000

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ORGANIZATION AND BUSINESS

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BUSINESS

NOTE 1. ORGANIZATION AND BUSINESS

Organization and Operations

IDdriven, Inc., (“IDdriven”, “we”, “us”, or the “Company”) is a Nevada corporation incorporated on January 27, 2014 under the name TiXFi, Inc. Insight Innovators B.V., was incorporated on May 22, 2013 in the Netherlands and has its registered corporate seat in Amersfoort, The Netherlands.

Going Concern Matters

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the Company’s continuation as a going concern. The Company has an accumulated deficit of $4,530,844 as of June 30, 2017. In addition, current liabilities exceed current assets by $2,956,957 as of June 30, 2017.

Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. See Note 12 - Subsequent Events.

There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail or cease its operations.

Due to uncertainties related to these matters, there exists a substantial doubt about the ability of the Company to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation of Interim Financial Statements

The accompanying interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year 2016 have been omitted. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended December 31, 2016 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on March 31, 2017.

Consolidation Policy

For June 30, 2017, the unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Insight Innovators B.V. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates and Assumptions

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions about collection of accounts and notes receivable, the valuation and recognition of stock-based compensation expense, the valuation and recognition of derivative liability, valuation allowance for deferred tax assets and useful life of fixed assets.

Functional currency

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars (“USD”). The Company’s wholly owned subsidiary (Insight’s) functional currency is the Euro. The financial statements are translated into USD in accordance with Codification ASC 830, “Foreign Currency Matters”. All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, shareholders’ equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in the shareholders’ equity in accordance with Codification ASC 220, “Comprehensive Income”.

Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into Euro at the rate on the date of the transaction and included in the results of operations as incurred. There were no material transaction gains or losses in the periods presented.

	June 30, 2017		December 31, 2016		June 30, 2016
Spot Euro: USD exchange rate	$	1.14	$	1.05	$	1.11
Average Euro: USD exchange rate	$	1.06–1.10	$	1.08–1.12	$	1.11–1.12

Cash and cash equivalents

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. As of June 30, 2017, and December 31, 2016, cash primarily consists of cash on hand and in bank. As of June 30, 2017, cash held in a U.S. bank was $8,087 and cash held in foreign bank in the Netherlands was $4,087 (EUR3,585). As of December 31, 2016, cash held in a U.S. bank was $9,971 and cash held in foreign bank in the Netherlands was $3,203 (EUR3,050).

Revenue recognition

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or is determinable; and (iv) collectability is reasonably assured. Determination of criteria (iii) and (iv) are based on management’s judgments regarding the fixed nature of the selling prices of the services delivered and the collectability of those amounts. The Company’s agreements do not include general rights of return and do not provide clients with the right to take possession of the software supporting the services being provided. As such, the agreements are accounted for as service contracts.

Revenues from the services rendered are recognized in proportion to the services delivered.

Any amount receivable or received, but unrecognized for revenue recognition purpose is recorded as deferred revenues.

Sales taxes collected from clients and remitted to governmental authorities where applicable are accounted for on a net basis and therefore are excluded from revenues in the statements of operations.

Share-Based Expense

ASC 718,” Compensation - Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50,” Equity - Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Share-based expense totaled $40,071 and $61,684 for the six months ending June 30, 2017 and 2016, respectively.

Fair value measurements

Fair value is defined as the price that the Company would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent counter-party in the principal market or in the absence of a principal market, the most advantageous market for the investment or liability. A three-tier hierarchy is established to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs); and establishes a classification of fair value measurements for disclosure purposes.

The hierarchy is summarized in the three broad levels listed below:

Level 1	-	quoted prices in active markets for identical assets and liabilities
Level 2	-	other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.)
Level 3	-	significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities).

In accordance with Accounting Standards Codification (“ASC”) 815, the Company’s debt derivative liabilities are measured at fair value on a recurring basis, and are level 3 measurements in the three-tier fair value hierarchy.

There were no transfers between the levels of the fair value hierarchy during the three and six months ended June 30, 2017 and 2016.

Fair value of financial instruments

The Company’s financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

The following table summarizes fair value measurements by level at June 30, 2017 and December 31, 2016 measured at fair value on a recurring basis:

June 30, 2017	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	709,734	$	709,734

December 31, 2016	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	2,577,652	$	2,577,652

Recently Issued Accounting Standards

In May 2014, the FASB issued an accounting standards update which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

In February 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-06, “Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting.” Among other things, the amendments require a plan’s interest in that master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. The amendments also remove the requirement to disclose the percentage interest in the master trust for plans with divided interests and require that all plans disclose the dollar amount of their interest in each of those general types of investments. The amendments require all plans to disclose: (a) their master trust’s other asset and liability balances; and (b) the dollar amount of the plan’s interest in each of those balances. Lastly, the amendments eliminate redundant investment disclosures (e.g., those required by Topics 815 and 820) relating to 401(h) account assets. Effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The amendments should be applied retrospectively to each period for which financial statements are presented. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its consolidated financial statements.

In February 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The amendments clarify that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments also define the term in substance nonfinancial asset. The amendments clarify that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. A contract that includes the transfer of ownership interests in one or more consolidated subsidiaries is within the scope of Subtopic 610-20 if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. Effective at the same time as the amendments in Update 2014-09, Revenue from Contracts with Customers (Topic 606). Therefore, public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the amendments in this Update to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities should apply the amendments in this Update to annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. All other entities may apply the guidance earlier as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance earlier as of annual reporting periods beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance. An entity is required to apply the amendments in this Update at the same time that it applies the amendments in Update 2014-09. The Company is currently evaluating the potential impact this standard may have on its financial position and results of operations.

In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard will be effective for the Company on January 1, 2018, however, early adoption is permitted with prospective application to any business development transaction.

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

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PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2017

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2017 and December 31, 2016:

	June 30,			December 31,
	2017			2016
Furniture	$	5,915		$	5,915
Computers		18,886			18,886
		24,801			24,801
Accumulated Depreciation		(19,705	)		(17,593	)
Foreign currency translation effect		(2,147	)		(2,439	)
	$	2,949		$	4,769

Depreciation expense for the three and six months ended June 30 2017 amounted to $1,065 and $2,112, respectively. Depreciation expense for the three and six months ended June 30 2016 amounted to $1,287 and $2,673, respectively.

All of the Company’s property and equipment are recorded in Insight (foreign subsidiary) as of June 30, 2017 and December 31, 2016.

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NOTES PAYABLE

6 Months Ended

Jun. 30, 2017

Notes Payable [Abstract]

NOTES PAYABLE

NOTE 4. NOTES PAYABLE

Notes Payable

	June 30,		December 31,
	2017		2016
Promissory Notes - December 2016	$	51,000	$	51,000
Promissory Notes - January 2017		10,000		-
Less current portion of notes payable		61,000		51,000
Long-term notes payable	$	-	$	-

As of June 30, 2017, and December 31, 2016, the accrued interest related to this promissory note was $5,935 and $28, respectively.

Dated December 30, 2016

On December 30, 2016, the Company issued a 20% Promissory Note for $51,000. The note bears interest at a rate of 20% per annum and the maturity date is the twelve months from the issue date.

Dated January 26, 2017

On January 26, 2017, the Company issued a 20% Promissory Note for $10,000. The note bears interest at a rate of 20% per annum and the maturity date is the twelve months from the issue date.

Notes Payable - Related Parties

Notes payable - related party consisted of the following at June 30, 2017 and December 31, 2016:

	June 30,		December 31,
	2017		2016
Promissory Notes	$	42,180	$	38,850
Less current portion of notes payable		42,180		38,850
Long-term notes payable	$	-	$	-

Dated June 29, 2016

On June 29, 2016, the Company issued an 8% Promissory Note for EUR 10,000 ($11,400). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender.

Dated June 30, 2016

On June 30, 2016, the Company issued an 8% Promissory Note for EUR 10,000 ($11,400). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender.

Dated August 29, 2016

On August 29, 2016, the Company issued an 8% Promissory Note for EUR 35,000 ($39,900). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender. EUR18,000 ($18,900) of note was repaid in December 2016.

As of June 30, 2017, and December 31, 2016, the accrued interest related to these promissory notes - related party was $3,895 and $2,046, respectively.

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CONVERTIBLE NOTES PAYABLE

6 Months Ended

Jun. 30, 2017

Convertible Notes Payable [Abstract]

CONVERTIBLE NOTES PAYABLE

NOTE 5. CONVERTIBLE NOTES PAYABLE

Convertible notes payable consisted of the following at June 30, 2017 and December 31, 2016:

	June 30,			December 31,
	2017			2016
Convertible Note - December 2015	$	350,000		$	350,000
Convertible Note - February 2016		-			30,000
Convertible Note - March 2016		250,000			250,000
Convertible Notes - May 2016		62,500			75,000
Convertible Note - June 2016		-			15,000
Convertible Notes - September 2016		132,654			201,511
Convertible Notes -October 2016		80,162			148,798
Convertible Notes - November 2016		25,000			25,000
Convertible Notes - December 2016		75,000			75,000
Convertible Notes - March 2017		168,500			-
Convertible Notes - April 2017		223,500			-
Convertible Notes - June 2017		83,000			-
		1,450,316			1,170,309
Less debt discount and debt issuance cost		(273,136	)		(414,118	)
		1,177,180			756,191
Less current portion of convertible notes payable		1,177,180			756,191
Long-term convertible notes payable	$	-		$	-

The Company recognized amortization expense related to the debt discount and deferred financing fees of $354,736 and $87,994 for the six months ended June 30, 2017 and 2016, respectively, which are included in interest expense in the consolidated statements of operations.

10% Convertible Note - December 2015

On December 21, 2015, the Company issued a 10% Convertible Note (the “10% Convertible Note”) in the amount of $500,000, in exchange for a promissory note for $500,000 originally issued by Insight on October 20, 2015 to an unrelated third party investor (the “Investor”). The company assumed accrued interest of $3,838 due from this previous promissory note. The 10% Convertible Note bears interest at the rate of 10% per annum and matures May 1, 2017. The holder is entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. The conversion price (the “Conversion Price”) is 75% of the volume weighted average price of the Common Stock for the ten (10) trading days immediately prior to the applicable conversion date, subject to adjustment herein but in no event: (i) lower than $4,000,000 divided by the total number of shares of Common Stock outstanding immediately prior to the conversion date; or (ii) greater than $12,000,000 divided by the total number of shares of common stock outstanding immediately prior to the conversion date.

On July 22, 2016, $150,000 of the Convertible Note was converted into 941,620 common shares at market trading price $0.27 per share. $160,771 value of derivative liability on the date of conversion was extinguished and the conversion generated $56,534 gain on extinguishment of debt in the consolidated statements of operations.

Additional features of the 10% Convertible Note include:

· Liquidation Preference. Upon a liquidation event, we will first pay to the Investor the principal amount owing, plus all accrued and unpaid interest, and any other fees or liquidated damages then due and owing thereon. After full payment of the liquidation preference amount to Investor, we will then distribute the remaining assets to holders of common stock, other junior securities (if any). The 10% Convertible Note is intended to rank senior to our common stock or any equivalents thereof, or any preferred stock we may designate, including the Series A Preferred, in respect of any dividends or distributions many in respect thereof.

·   Mandatory Conversion. The 10% Convertible Note shall automatically convert into shares of our common stock at the Conversion Price without any action of the holder upon the occurrence of any of the following events after the closing date of the Share Exchange: (i) the completion of a public offering of our securities for gross proceeds of at least $5,000,000 pursuant to an effective registration statement under the Securities Act; or (ii) if we complete one or more financing transactions for gross proceeds of at least $5,000,000.

·   Ownership Limitations. The 10% Convertible Note is not convertible to the extent that (a) the number of shares of our common stock beneficially owned by the Investor and (b) the number of shares of our common stock issuable upon the conversion of the 10% Convertible Note or otherwise would result in the beneficial ownership by holder of more than 4.99% of our then outstanding common stock. This ownership limitation can be increased or decreased to any percentage not exceeding 9.99% by the Investor upon 61 days’ notice to us.

· Certain Adjustments. The conversion price of the 10% Convertible Note is subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.

· Negative Covenants. As long as the 10% Convertible Note is outstanding, unless the holders of at least 75% of the then outstanding principal amount of the 10% Convertible Note shall have otherwise given prior written consent, we agreed that we will not amend our charter documents and bylaws in any manner that materially and adversely affects any rights of the holder, repurchase our common stock or certain other securities, pay dividends or distributions on any securities junior to the 10% Convertible Note, sell, lease or otherwise dispose of any significant portion of our assets outside the ordinary course of business or enter into any agreement with respect to any of the foregoing.

·    Redemption Upon Triggering Events. If we fail to meet our obligations under the terms of the 10% Convertible Note, it will become immediately due and payable and subject to penalties provided for within the note.

·   Piggy-Back Registration Rights. The holder of the 10% Convertible Note is entitled to Piggy-Back Registration Rights as provided for in the Piggy-Back Registration Rights Agreement provided for in Exhibit B to the Securities Purchase Agreement.

Dated - Issued in Fiscal Year 2016

During the year ended December 31, 2016, the Company issued a total Convertible Notes in the amount of $820,308 and warrants to purchase up to 450,755 shares of our common stock, with the following terms:

· Terms 6 - 18 months

· Annual interest rates ranging from 8% to 20%

· Convertible at the option of the holders either at issuance or 6 months from issuance.

·   Conversion prices are typically based on the discounted (20% - 25% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes are subject to adjustment to not convert in a value band, not lower than $4,000,000 to $6,000,000 or higher than $12,000,000 to $18,000,000, divided by the total number of shares of common stock outstanding immediately prior to the conversion date.

Dated - Issued in Fiscal Year 2017

During the six months ended June 30, 2017, the Company issued a total Convertible Notes in the amount of $475,000 with the following terms:

· Term 9 – 12 months

· Annual interest rate ranging from 1% to 18%

· Convertible at the option of the holders either at issuance

· Conversion prices are typically based on the discounted (25% to 40% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Conversion price of certain notes are $0.04 per share.

· Original issue discount and Financing cost on note issuance at $52,500

Certain notes allow the Company to redeem the notes at rates ranging from 135% to 150% depending on the redemption date provided that no redemption is allowed after the 180th day.

The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock therefore the embedded conversion option is bifurcated once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature is recorded as a debt discount and amortized to interest expense over the term of the note.

The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes and warrants that became convertible as of June 30, 2017 and December 31, 2016 amounted to $709,734 and $2,577,652, respectively. During the six months ended June 30, 2017 and 2016, $232,045 and $330,562 of the value assigned to the derivative liability was recognized as a debt discount to the notes and warrants, $40,594 and $294,345 was recognized as a “day 1” derivative loss, respectively.

Conversion

During the six months ended June 30, 2017, convertible notes totaled $194,992 and $9,688 accrued interest were converted into 29,990,469 common shares with the recognition of gain on note conversion at $108,014.

Warrants

We accounted for the issuance of the Warrants in accordance with ASC 815 as a derivative (see Note 6).

Fiscal Year 2016

On March 28, 2016, the Company issued a Convertible Note in the amount of $250,000 and warrants to purchase up to 250,000 shares of our common stock. The warrants are exercisable into 250,000 shares of common stock, for a period of five years from issuance, at a price of $0.40 per share.

On September 12, 2016, the Company issued a Convertible Note in the amount of $101,511 and warrants to purchase up to 50,755 shares of our common stock. The warrants are exercisable into 50,775 shares of common stock, for a period of one year from issuance, at 120% of the lowest trading price during 20 trading day prior to the exercise date.

On September 12, 2016, the Company issued a Convertible Note in the amount of $150,000 of which $150,000 was received as of December 31, 2016, and warrants to purchase up to 75,000 shares of our common stock. The warrants are exercisable into 75,000 shares of common stock, for a period of one year from issuance, at 120% of the lowest trading price during 20 trading day prior to the exercise date.

On September 21, 2016, the Company issued Convertible Notes in the amount of $150,000 of which $150,000 was received as of December 31, 2016, and warrants to purchase up to 75,000 shares of our common stock. The warrants are exercisable into 75,000 shares of common stock, for a period of one year from issuance, at 120% of the lowest trading price during 20 trading day prior to the exercise date.

Fiscal Year 2017

During the six months ended June 30, 2017, the Company issued a total of 3,136,500 stock warrants as follows:

· On January 30, 2017, the Company entered into a public relations agreement with an unaffiliated party with warrants to purchase up to 2,000,000 shares of common stock. The warrants are exercisable into 2,000,000 shares of common stock, for a period of 3 years, at a price of $0.25 per share. The 2,000,000 warrants are considered tainted and the Company has recorded the related derivative liability.

· On February 21, 2017, the Company entered into a consulting agreement with an unaffiliated party with warrants to purchase up to 1,000,000 shares of common stock. The warrants will be vested and can be exercised into 1,000,000 shares of common stock in 3 months from the agreement date by May 21 2017, for a period of three years from issuance, at a price of $0.02 per share. The related derivative liability for the 1,000,000 warrants will be recorded in May 2017 when they become tainted.

· On February 28, 2017, the Company entered into a share subscription agreement with an unaffiliated party with attached warrants to purchase up to 136,500 shares of common stock. The warrants are exercisable into 136,500 shares of common stock, for a period of two years from issuance, at a price of $0.02 per share. The 136,500 warrants are considered tainted and the Company has recorded the related derivative liabilities.

The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2017:

Warrants Outstanding						Warrants Exercisable
Number of		Weighted Average Remaining		Weighted Average		Number of		Weighted Average
Shares		Contractual life (in years)		Exercise Price		Shares		Exercise Price
	250,000		3.75	$	0.4000		250,000	$	0.4000
	75,000		2.18	$	0.0048		75,000	$	0.0048
	50,755		2.18	$	0.0048		50,755	$	0.0048
	75,000		2.20	$	0.0048		75,000	$	0.0048
	2,000,000		2.59	$	0.2500		2,000,000	$	0.2500
	1,000,000		0.65	$	0.0200		1,000,000	$	0.0200
	124,000		1.67	$	0.0200		124,000	$	0.0200
	12,500		1.67	$	0.0200		12,500	$	0.0200
	3,587,255			$	0.1739		3,587,255

A summary of activity during the six months ended June 30, 2017 as follows:

	Warrants Outstanding
			Weighted Average
	Shares		Exercise Price
Balances as of December 31, 2016		450,755	$	0.23
Granted		3,136,500		0.17
Exercised		-		-
Forfeited/canceled		-		-
Balances as of June 30, 2017		3,587,255	$	0.17

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DERIVATIVE LIABILITIES

6 Months Ended

Jun. 30, 2017

Derivative Liability [Abstract]

DERIVATIVE LIABILITIES

NOTE 6. DERIVATIVE LIABILITIES

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, ”Derivatives and Hedging,” and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2017. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note and warrants is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in June 30, 2017 and December 31, 2016:

	Six Months Ended		Year Ended
	June 30, 2017		December 31, 2016
Expected term	0.07 - 3.99 years		0.10 - 5.00 years
Expected average volatility	100% - 177 %		98% - 169 %
Expected dividend yield		-		-
Risk-free interest rate	0.67%-1.89 %		0.36% - 1.93 %

The following table summarizes the derivative liabilities included in the balance sheet at June 30, 2017:

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2016	$	2,577,652
Addition of new derivative liabilities upon issuance of convertible notes as debt discounts		161,255
Addition of new derivatives liabilities recognized as issuance of warrants as stock based compensation expense		30,196
Reduction of derivatives liabilities from conversion of convertible note to common shares		(224,526	)
Gain on change in fair value of the derivative liabilities		(1,834,843	)
Balance - June 30, 2017	$	709,734

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item. The following table summarizes the loss (gain) on derivative liability included in the income statement for the six months ended June 30, 2017 and 2016, respectively.

	Six Months Ended
	June 30,
	2017			2016
Day one loss due to derivative liabilities on convertible notes and warrants	$	40,594		$	294,345
Gain on change in fair value of the derivative liabilities		(1,875,437	)		(30,096	)
(Gain) loss on change in the fair value of derivative liabilities	$	(1,834,843	)	$	264,249

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RELATED PARTY CONSIDERATIONS

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

RELATED PARTY CONSIDERATIONS

NOTE 7. RELATED PARTY CONSIDERATIONS

Management Agreements

Insight entered into Management Agreements with Berlisa B.V., Eagle Consulting LLC and Sterling Skies B.V. (entities that are owned by Messrs. Verweij, van Wijk and de Vries, executive officers of our company and related parties) on July 1, 2014 for a period of one year which expired on June 30, 2015 with a monthly fee of €7,500 per month.

The Company charged $248,138 and $250,520 during the six months ended June 30, 2017 and 2016, respectively to operations for the management fees stemming from these Management Agreements.

As of June 30, 2017, and December 31, 2016, the amount due to related parties was $457,548 and $296,816 and accrued interest on the payable amount of $35,148 and $9,172, respectively.

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CONCENTRATIONS

6 Months Ended

Jun. 30, 2017

Risks and Uncertainties [Abstract]

CONCENTRATIONS

NOTE 8. CONCENTRATIONS

The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the six months ended June 30, 2017 and 2016. In 2015 Insight Innovators decided to stop with consultancy and move forward as a product company.

	Six Months Ended			Six Months Ended
Customer	June 30, 2017			June 30, 2016
EU   PWN		57	%		100	%
EU   Computer Profile		6	%		-	%
US   NRECA		37	%		-	%

$23,089 of our total sales of $36,589 was generated in foreign countries by Insight during the six months ended June 30, 2017. All of our sales were generated in foreign countries by Insight during the six months ended June 30, 2016.

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STOCKHOLDERS' DEFICIT

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Attributable to Parent [Abstract]

STOCKHOLDERS' DEFICIT

NOTE 9. STOCKHOLDERS’ DEFICIT

On June 8, 2017, the Company filed a Certificate of Amendment with the state of Nevada, to the Company’s Articles of Incorporation, to increase the number of authorized shares of capital stock to 2,010,000,000 shares. With 2,000,000,000 shares of common stock, par value $0.001 and 10,000,000 shares of preferred stock, par value $0.001

Preferred Stock

The Company has authorized 10,000,000 preferred shares with a par value of $0.001 per share. The Board of Directors is authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.

Series A Convertible Preferred Stock

The Company has designated 808,000 shares of Series A Convertible Preferred Stock.

The designations, rights and preferences of the Series A Preferred include:

· the stated value of the Series A Preferred is $1.00 per share.

·   the shares have no voting rights, provided, however, that for so long as any shares are outstanding, we many not, without the affirmative vote of at least 51% of the then outstanding shares of the Series A Preferred, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred or alter or amend the Certificate of Designation, (b) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a liquidation (as defined) senior to, or otherwise in pari passu with, the Series A Preferred, (c) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders, (d) increase the number of authorized shares of Series A Preferred, or (e) enter into any agreement with respect to any of the foregoing.

· each share is convertible at the option of the holder based upon a conversion price of $0.1778 ($0.0296 per share post forward stock split), into shares of our common stock at any time. The rate of conversion is subject to adjustment as discussed below.

·   Upon our liquidation, dissolution or winding-up, the holders will be entitled to receive out of our assets, whether capital or surplus, an amount equal to the stated value per share, $1.00, plus any accrued and unpaid dividends thereon.

·   the conversion price of the Series A Preferred is subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events by adjustment of the conversion price by its multiplication by a fraction the numerator of which is the number of shares of common stock outstanding immediately before such event, and the denominator of which is the number of shares outstanding immediately after such event.

·   If, at any time while the Series A Preferred is outstanding, the Company or any subsidiary, as applicable sells or grants any option to purchase or sells or grants any right to re-price, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any common stock or common stock equivalents entitling any person to acquire shares of common stock at an effective price per share that is lower than a conversion price then in effect for any of the Series A Preferred, as adjusted, then the conversion price for shares of Series A Preferred shall be reduced to equal the lower issuance price.

·   As long as any shares of Series A Preferred are outstanding, unless the holders of at least 51% in Stated Value of the then outstanding shares of such Series A Preferred shall have given prior written consent, the Corporation shall not, and shall not permit any Subsidiary to, directly or indirectly:   a) The Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents (or a combination of units thereof) involving a variable rate transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of common stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of common stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the common stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.

During the six months ended June 30, 2017, 105,946 shares of Series A Convertible Preferred Stock were converted into 3,579,256 shares of common stock.

As of June 30, 2017 and December 31, 2016, the Company had 94,333 and 200,279, respectively, shares of Series A Convertible preferred stock issued and outstanding, respectively.

Series B Preferred Stock

On May 11, 2017, the Company filed a certificate of designation, preferences and rights of Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to designate 1,500,000 shares of its previously authorized preferred stock as Series B Preferred Stock. The holders of shares of Series B Preferred Stock that are not entitled to dividends or distributions have the following voting rights:

· Each share of Series B Preferred Stock entitles the holder to 250 votes on all matters submitted to a vote of the Company’s stockholders. In the event that such votes do not total at least 51% of all votes, then the votes cast by the holders of the Series B Preferred Stock shall be equal to 51% of all votes cast at any meeting of the Company’s stockholders or any issue put to the stockholders for voting.

· Except as otherwise provided in the Certificate of Designation, the holders of Series B Preferred Stock, the holders of Company common stock and the holders of shares of any other Company capital stock having general voting rights and shall vote together as one class on all matters submitted to a vote of the Company’s stockholders.

· The holders of the Series B Preferred Stock do not have any conversion rights.

On May 12, 2017, the Company entered into investment agreements (the “Investment Agreements”) with three entities in which Arend D. Verweij, Geurt van Wijk and Remy de Vries, individuals who are either executive officers and directors or both of the Company, have a pecuniary interest in and exercise voting and dispositive control over. Pursuant to the terms of each of the respective Investment Agreements, the Company sold to each of the three entities 500,000 shares of the Series B Preferred Stock at a purchase price of $500 ($0.001 per share).

Common Stock

The Company has authorized 2,000,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

During the six months ended June 30, 2017, the Company issued 34,934,725 shares of common stock, as follows:

· 1,365,000 shares of common stock issued for net proceeds of $27,300.

· 3,579,256 shares of common stock in a conversion of 105,946 shares of Series A Convertible Preferred Stock.

· 29,990,469 shares of common stock in a conversion of $194,992 of Convertible Notes and accrued interest $9,688 valued at $321,192 and the Company recorded a gain on extinguishment of debt of $108,014 during the six months ended June 30, 2017.

As at June 30, 2017 and December 31, 2016, the Company had 132,392,122 and 97,457,397 shares of common stock issued and outstanding, respectively.

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INCENTIVE STOCK PLANS

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

INCENTIVE STOCK PLANS

NOTE 10. INCENTIVE STOCK PLANS

2015 Stock Option Grants

We granted stock options, which was adopted by our board of directors on December 21, 2015, provides for equity incentives to be granted to our employees, executive officers or directors.

During the year ended December 31, 2015 we issued options to purchase an aggregate of 8,173,686 shares of our unregistered common stock at a price of $.04893 per share for 1/3 of the shares, $.05873 per share for 1/3 of the shares, and $.06852 per share for 1/3 of the shares. The options had an aggregate value totaling $71,630 were issued to Messrs. Verweij, van Wijk and de Vries, executive officers of our company.

A summary of activity during the six months ended June 30, 2017 follows:

	Options Outstanding
			Weighted-		Fair Value
	Number of		Average		on Grant		Intrinsic
	Shares		Exercise Price		Date		Value
Balances as of December 31, 2016		8,173,686	$	0.0587	$	71,630	$	2,997
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited/canceled		-		-		-		-
Balances as of June 30, 2017		8,173,686	$	0.0587	$	71,630	$	-

The outstanding options have a weighted-average remaining contract term of 3.48 years. As of June 30, 2017, 5,449,124 options remain unvested.

One-third of the options granted vest at the end of the first, second and third year after the date of the award date of December 21, 2015. After vesting, the option generally can be exercised for the period remaining in the 5-year term from issuance date. Total compensation cost expected to be recognized for unvested options at June 30, 2017 amounted to $17,604. During the six months ended June 30, 2017 and 2016, the Company charged to operations stock based compensation expense of $9,875 and $21,684, respectively.

The following table summarizes information relating to outstanding and exercisable stock options as of June 30, 2017:

Options Outstanding						Options Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
	8,173,686		3.48	$	0.0587		2,724,562	$	0.0489

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the stock options at June 30, 2017 for those stock options for which the quoted market price was in excess of the exercise price (“in-the-money options”). As of June 30, 2017, 2,724,562 options to purchase shares of common stock were exercisable and the intrinsic values of these options are $nil. As of June 30, 2017, the intrinsic value of 5,449,124 outstanding options is $nil, as these options to employees vest in the future periods.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 11. COMMITMENTS AND CONTINGENCIES

Rent commitment

Insight leases approximately 4,000 square feet of space at Nijverheidsweg Noord 78, 3812PM Amersfoort, The Netherlands. The terms of the lease require that Insight pay €1,500 per month (approximately $1,590 per month) on a month to month basis.

Total rent expenses for the six months ended June 30, 2017 and 2016 were $9,720 and $10,035, respectively. Total rent expenses for the three months ended June 30, 2017 and 2016 were $4,950 and $5,040, respectively.

Rent payable as of June 30, 2017 and December 31, 2016 amounted to $20,691 and $17,152, respectively and included under accounts payable in the consolidated balance sheet.

Employment Agreements

Arend D. Verweij. Under the terms of the December 21, 2015 employment agreement we entered into with Mr. Verweij, he agreed to serve as our Chief Executive Officer and Chairman of the board of directors for a period of two years, that term automatically renewable for one year periods thereafter unless notice by either of Mr. Verweij or us is provided to the other to the contrary within 30 days prior to the expiration of any such period. The employment agreement provides for, among other things, Mr. Verweij’s full time service in our U.S. offices, for a base annual salary in the amount of $180,000, subject to the possible increase at each anniversary thereof to be determined by a majority of the independent members of the board of directors in its discretion; provided, however, that Mr. Verweij’s annual salary will be increased to $252,000 upon our entry into fully executed contracts with at least three customers who are unrelated parties that have a minimum of 500 users of the software system being licensed by our subsidiary, Insight, and each of such three contracts are in full force and effect.

Additionally, Mr. Verweij is eligible to receive a performance bonus during each year of employment of up to 100% of the base salary. The award of each year’s performance bonus, if any, is to be based upon certain performance criteria specified in the employment agreement and to be further determined by a majority of the independent members of the board of directors or a compensation committee to be made up of at least a majority of independent members appointed by the board or directors. Moreover, Mr. Verweij will receive a stock option grant entitling him to purchase an aggregate of 3,065,130 shares of our common stock which vests one-third on each of the three anniversary dates of his employment, but only if he is still in our employ on the date of vesting. The exercise prices of the option shares as to one third their number on their three respective vesting anniversaries are $0.04893, $0.05873 and $0.06852 per share. The number of unvested option shares available as of a given time during his employ are subject to appropriate adjustment in the event we undertake or undergo, as applicable, a stock split, reverse stock split, merger, recapitalization and similar transactions, and should Mr. Verweij cease to be in our employ, except for under certain specified circumstances, he will have one month to exercise vested options or otherwise they will become void. Those certain specified circumstances are his termination by us without cause, his termination for good reason, or his termination by reason of a change in control.

Further, Mr. Verweij shall be entitled to five weeks’ paid vacation, as well as in respect of all conventional holidays, a $1,500 monthly health insurance allowance, reimbursement of his out of pocket expenses incurred in connection with his employment, and such other perquisites and benefits as are or as may be made available to other of our executive employees. As of the date of this report, the board of directors has not established a complete set of performance benchmarks for purposes of determining bonuses payable to Mr. Verweij or other of our executives.

If Mr. Verweij’s employment is terminated by us, for cause, or by Mr. Verweij without good reason, he shall be entitled to be paid his accrued salary through, and earned but unused compensated absence time as of, the date of termination, but all remaining unvested stock options will be immediately forfeited by him.

Should we terminate Mr. Verweij’s employment without cause, or should he terminate the same for good reason, he shall be entitled to (i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

Finally, during the term of his employment and for a period of (i) one year thereafter if we terminate his employment without cause or he terminates his employment for good reason or (ii) two years otherwise, Mr. Verweij agreed to not engage in any competitive business or activities anywhere in the world, and during and subsequent to his employment, he has agreed to keep certain of our important or sensitive information confidential.

Geurt van Wijk. Under the terms of the December 21, 2015 employment agreement we entered into with Mr. van Wijk, he agreed to serve as our Chief Operating Officer for a period of two years, that term automatically renewable for one year periods thereafter unless notice by either of Mr. van Wijk or us is provided to the other to the contrary within 30 days prior to the expiration of any such period. The employment agreement provides for, among other things, Mr. van Wijk’s full time service from our offices in the Netherlands, for a base annual salary equal to EURO 120,000, subject to the possible increase at each anniversary thereof to be determined by a majority of the independent members of the board of directors in its discretion; provided, however, that Mr. van Wijk’s annual salary will be increased to EURO 150,000 upon our entry into fully executed contracts with at least three customers who are unrelated parties that have a minimum of 500 users of the software system being licensed by our subsidiary, Insight, and each of such three contracts are in full force and effect.

Additionally, Mr. van Wijk is eligible to receive a performance bonus during each year of employment of up to 75% of the base salary. The award of each year’s performance bonus, if any, is to be based upon certain performance criteria specified in the employment agreement and to be further determined by a majority of the independent members of the board of directors or a compensation committee to be made up of at least a majority of independent members appointed by the board or directors. Moreover, Mr. van Wijk will receive a stock option grant entitling him to purchase an aggregate of 2,554,278 shares of our common stock which vest one-third on each of the three anniversary dates of his employment, but only if he is still in our employ on the vesting dates. The exercise prices of the option shares as to one third their number on their three respective vesting anniversaries are $0.04893, $0.05873 and $0.06852 per share. The number of unvested option shares available as of a given time during his employ are subject to appropriate adjustment in the event we undertake or undergo, as applicable, a stock split, reverse stock split, merger, recapitalization and similar transactions, and should Mr. van Wijk cease to be in our employ, except for under certain specified circumstances, he will have one month to exercise vested options or otherwise they will become void. Those certain specified circumstances are his termination by us without cause, his termination for good reason, or his termination by reason of a change in control.

Further, Mr. van Wijk shall be entitled to five weeks’ paid vacation, as well as in respect of all conventional holidays, a EURO 1,350 monthly vehicle allowance, which will stop when his annual base salary reaches EURO 150,000, reimbursement of his out of pocket expenses incurred in connection with his employment, and such other perquisites and benefits as are or as may be made available to other of our executive employees. As of the date of this report, the board of directors has not established a complete set of performance benchmarks for purposes of determining bonuses payable to Mr. van Wijk or other of our executives.

If Mr. van Wijk’s employment is terminated by us, for cause, or by Mr. van Wijk without good reason, he shall be entitled to be paid his accrued salary through, and earned but unused compensated absence time as of, the date of termination, but all remaining unvested stock options will be immediately forfeited by him.

Should we terminate Mr. van Wijk’s employment without cause, or should he terminate the same for good reason, he shall be entitled to (i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

Finally, during the term of his employment and for a period of (i) one year thereafter if we terminate his employment without cause or he terminates his employment for good reason or (ii) two years otherwise, Mr. van Wijk agreed to not engage in any competitive business or activities anywhere in the world, and during and subsequent to his employment, he has agreed to keep certain of our important or sensitive information confidential.

Remy de Vries. As of December 21, 2015, we entered additionally into an employment agreement with Mr. de Vries to serve as our Chief Technology Officer for a period of two years, that term automatically renewable for one year periods thereafter unless notice by either of Mr. de Vries or us is provided to the other to the contrary within 30 days prior to the expiration of any such period. The employment agreement provides for, among other things, Mr. de Vries’ full time service from our offices in the Netherlands, for a base annual salary equal to EURO 120,000, subject to the possible increase at each anniversary thereof to be determined by a majority of the independent members of the board of directors in its discretion; provided, however, that Mr. de Vries’ annual salary will be increased to EURO 150,000 upon our entry into fully executed contracts with at least three customers who are unrelated parties that have a minimum of 500 users of the software system being licensed by our subsidiary, Insight, and each of such three contracts are in full force and effect.

Additionally, Mr. de Vries is eligible to receive a performance bonus during each year of employment of up to 75% of the base salary. The award of each year’s performance bonus, if any, is to be based upon certain performance criteria specified in the employment agreement and to be further determined by a majority of the independent members of the board of directors or a compensation committee to be made up of at least a majority of independent members appointed by the board or directors. Moreover, Mr. de Vries will receive a stock option grant entitling him to purchase an aggregate of 2,554,278 shares of our common stock which vest one-third on each of the anniversary dates of his employment, but only if he is still in our employ on the vesting date. The exercise prices of the option shares as to one third their number on their three respective vesting anniversaries are $0.04893, $0.05873 and $0.06852 per share. The number of unvested option shares available as of a given time during his employ are subject to appropriate adjustment in the event we undertake or undergo, as applicable, a stock split, reverse stock split, merger, recapitalization and similar transactions, and should Mr. de Vries cease to be in our employ, except for under certain specified circumstances, he will have one month to exercise vested options or otherwise they will become void. Those certain specified circumstances are his termination by us without cause, his termination for good reason, or his termination by reason of a change in control.

Further, Mr. de Vries shall be entitled to five weeks’ paid vacation, as well as in respect of all conventional holidays, a EURO 1,350 monthly vehicle allowance, which will stop when his annual base salary reaches EURO 150,000, reimbursement of his out of pocket expenses incurred in connection with his employment, and such other perquisites and benefits as are or as may be made available to other of our executive employees. As of the date of this report, the board of directors has not established a complete set of performance benchmarks for purposes of determining bonuses payable to Mr. de Vries or other of our executives.

If Mr. de Vries’ employment is terminated by us, for cause, or by Mr. de Vries without good reason, he shall be entitled to be paid his accrued salary through, and earned but unused compensated absence time as of, the date of termination, but all remaining unvested stock options will be immediately forfeited by him.

Should we terminate Mr. de Vries’ employment without cause, or should he terminate the same for good reason, he shall be entitled to (i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

Finally, during the term of his employment and for a period of (i) one year thereafter if we terminate his employment without cause or he terminates his employment for good reason or (ii) two years otherwise, Mr. de Vries agreed to not engage in any competitive business or activities anywhere in the world, and during and subsequent to his employment, he has agreed to keep certain of our important or sensitive information confidential.

Litigation

From time to time we may be a defendant and/or plaintiff in various other legal proceedings arising in the normal course of our business. We are currently not a party to any material legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, we are not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations. Furthermore, as of the date, our management is not aware of any proceedings to which any of our directors, officers, or affiliates, or any associate of any such director, officer, affiliate, or security holder is a party adverse to our company or has a material interest adverse to us.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12. SUBSEQUENT EVENTS

Amendments to Convertible Promissory Notes

On July 10, 2017 (the “Effective Date”), the Company entered into amendments (the “Amendments”) with the owners and holders of the following convertible promissory notes issued by the Company (the “Convertible Notes”):

· Secured Convertible Promissory Note in the original principal amount of $75,000 issued by the Company on September 21, 2016 to Summit Trading, Ltd. (“Summit Trading”);

· Convertible Promissory Note in the original principal amount of $250,000 issued by the Company on March 28, 2016 to Susannah Forest;

· Convertible Promissory Note in the original principal amount of $500,000 issued by the Company on December 18, 2015 to Susannah Forest;

· 10% Convertible Subordinated Promissory Note in the original principal amount of $62,500 issued by the Company on May 16, 2016 to Monbridge, Inc. (“Monbridge”);

· Secured Convertible Promissory Note in the original principal amount of $75,000 issued by the Company on September 21, 2016 to Monbridge;

· Secured Convertible Promissory Note in the original principal amount of $150,000 issued by the Company on September 12, 2016 to Taconic Group, LLC (“Taconic”); and

· Secured Convertible Promissory Note in the original principal amount of $101,511 issued by the Company on September 12, 2016 to R&T Sports Marketing, Inc.

The Amendments extend the maturity date for each of the Convertible Notes to six months from the Effective Date and, so long as the Convertible Note is not in default, the Company has the right to extend its Maturity Date for an additional period of six months. The Amendments also revise the conversion price under the Convertible Note to mean 50% multiplied by the lowest trading price for the Company’s Common Stock during the twenty trading day period prior to the date of conversion. In the event that shares of the Company’s Common Stock are not deliverable via DWAC following the conversion of any amount under the Convertible Note, the holder shall be entitled to an additional 10% discount. The Company agreed to increase the number of authorized shares of its Common Stock covenants that within 30 days from the Effective Date to an amount that will allow it to and keep available out of its authorized and unissued shares a number of shares of Common Stock at least equal to two times the number of shares of common stock issuable upon conversion of the entire principal amount plus accrued interest due under the Convertible Notes.

The $150,000 Convertible Note held by Taconic and the $75,000 principal amount Convertible Note held by Monbridge were each increased by $60,000 to include liquidated damages due to the holders of such convertible notes as a result of the Company’s failure to deliver shares of its Common Stock for more than 30 days as provided for in the Convertible Notes held by such holder.

Termination of Stock Pledge and Security Agreement

The Amendments terminate a stock pledge agreement whereby the Company’s executive officers and directors had pledged their shares of the Company’s common stock as collateral for certain of the Convertible Notes and terminated an intellectual property security agreement whereby the Company had pledged all of its intellectual property as collateral for certain of the Convertible Notes. As a result of these terminations, none of the Convertible Notes are secured. Further, the holders of the Convertible Notes agreed to forbear from exercising any of their respective rights or remedies under the Convertible Notes as a result of any breach by the Company under the Convertible Note.

Summit Note

On July 10, 2017, the Company issued to Summit Trading a Convertible Promissory Note (the “Summit Note”) in the principal amount of $61,000, in exchange for Summit Trading’s cancellation of (i) a Promissory Note in the principal amount of $51,000, plus accrued interest, issued by the Company to Summit Trading on December 30, 2016, plus accrued interest and (ii) a Promissory Note in the principal amount of $10,000, plus accrued interest, issued by the Company to Summit on January 26, 2017. The Summit Note contains terms and conditions substantially similar to the convertible notes held by Monbridge as amended by the Amendment discussed above except that such note bears interest at the rate of 20% per annum and matures twelve (12) months from the date of issuance.

Securities Exchange Agreement

On July 10, 2017, the Company issued to Taconic Group, LLC (“Taconic”) a Convertible Promissory Note in the principal amount of $94,333 (the “Taconic Note”) in exchange for 94,333 shares of the Company’s Series A Preferred Stock held by Taconic. The Taconic Note bears interest at the rate of 20% per annum and matures twelve (12) months from the date of issuance. The conversion price under the Taconic Note to mean 60% multiplied by the lowest trading price for the Company’s Common Stock during the twenty trading day period prior to the date of conversion. In the event that shares of the Company’s Common Stock are not deliverable via DWAC following the conversion of any amount under the Taconic Note, the holder shall be entitled to an additional 10% discount. The Company agreed to increase the number of authorized shares of its Common Stock covenants that within 30 days from the Effective Date to an amount that will allow it to and keep available out of its authorized and unissued shares a number of shares of Common Stock at least equal to two times the number of shares of common stock issuable upon conversion of the entire principal amount plus accrued interest due under the Taconic Notes. The Taconic Note contains terms and conditions substantially similar to other convertible notes issued by the Company on July 10, 2017 except as noted above.

Power Up Lending Note

On August 2, 2017 (the “Issue Date”), the Company issued a Convertible Promissory Note to an unrelated third party investor in the principal amount of $28,000 (the “August 2017 Note”). The August 2017 Note bears interest at the rate of 12% per annum. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-two (22%) per annum. The principal amount of the August 2017 Note and interest are payable on May 15, 2018 (the “Maturity Date”).

Under the terms of the August 2017 Note, the Investor is entitled to, at any time beginning 180 days following the date of the August 2017 Note, convert the principal balance and any accrued interest (the “Amount Due”) into shares of the Company’s Common Stock, at a conversion price per share equal to 60% of the trading price for its Common Stock during the 20 trading day period prior to conversion, upon the terms and subject to the conditions of the August 2017 Note. The conversion price of the August 2017 Note is subject to adjustment in the event of stock splits, stock dividends and similar corporate events. The August 2017 Note contains representations, warranties, events of default, beneficial ownership limitations, prepayment options, and other provisions that are customary of similar instruments.

The August 2017 Note is not convertible to the extent that (a) the number of shares of our common stock beneficially owned by the Investor and (b) the number of shares of our common stock issuable upon the conversion of the August 2017 Note or otherwise would result in the beneficial ownership by Investor of more than 4.99% of our then outstanding common stock. This ownership limitation can be increased or decreased to any percentage not exceeding 9.99% by the Investor upon 61 days notice to us.

The August 2017 Note may be prepaid upon payment of the following optional prepayment amounts: 110% of the Amount Due during the period beginning on the Issue Date and ending 30 days thereafter, 115% of the total of the Amount Due during the period beginning 31 days after the Issue Date and ending 60 days after the Issue Date, 120% of the total of the Amount Due during the period beginning 61 days after the Issue Date and ending 90 days after the Issue Date, 125% of the total of the Amount Due during the period beginning 91 days after the Issue Date and ending 120 days after the Issue Date, 130% of the Amount Due interest during the period beginning 121 days after the Issue Date and ending 150 days after the Issue Date, or 135% of the Amount Due during the period beginning 151 days after the Issue Date and ending 180 days after the Issue Date. After 180 days after the Issue Date, the August 2017 Note may not be prepaid.

Issuance of Common Stock

Subsequent to June 30, 2017, the Company issued 11,854,813 shares of common stock for the conversion of convertible notes in the principal amount of $21,988.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation of Interim Financial Statements

Basis of Presentation of Interim Financial Statements

The accompanying interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year 2016 have been omitted. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended December 31, 2016 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on March 31, 2017.

Consolidation Policy

Consolidation Policy

For June 30, 2017, the unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Insight Innovators B.V. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates and Assumptions

Use of Estimates and Assumptions

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions about collection of accounts and notes receivable, the valuation and recognition of stock-based compensation expense, the valuation and recognition of derivative liability, valuation allowance for deferred tax assets and useful life of fixed assets.

Functional currency

Functional currency

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars (“USD”). The Company’s wholly owned subsidiary (Insight’s) functional currency is the Euro. The financial statements are translated into USD in accordance with Codification ASC 830, “Foreign Currency Matters”. All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, shareholders’ equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in the shareholders’ equity in accordance with Codification ASC 220, “Comprehensive Income”.

Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into Euro at the rate on the date of the transaction and included in the results of operations as incurred. There were no material transaction gains or losses in the periods presented.

	June 30, 2017		December 31, 2016		June 30, 2016
Spot Euro: USD exchange rate	$	1.14	$	1.05	$	1.11
Average Euro: USD exchange rate	$	1.06–1.10	$	1.08–1.12	$	1.11–1.12

Cash and cash equivalents

Cash and cash equivalents

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. As of June 30, 2017, and December 31, 2016, cash primarily consists of cash on hand and in bank. As of June 30, 2017, cash held in a U.S. bank was $8,087 and cash held in foreign bank in the Netherlands was $4,087 (EUR3,585). As of December 31, 2016, cash held in a U.S. bank was $9,971 and cash held in foreign bank in the Netherlands was $3,203 (EUR3,050).

Revenue recognition

Revenue recognition

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or is determinable; and (iv) collectability is reasonably assured. Determination of criteria (iii) and (iv) are based on management’s judgments regarding the fixed nature of the selling prices of the services delivered and the collectability of those amounts. The Company’s agreements do not include general rights of return and do not provide clients with the right to take possession of the software supporting the services being provided. As such, the agreements are accounted for as service contracts.

Revenues from the services rendered are recognized in proportion to the services delivered.

Any amount receivable or received, but unrecognized for revenue recognition purpose is recorded as deferred revenues.

Sales taxes collected from clients and remitted to governmental authorities where applicable are accounted for on a net basis and therefore are excluded from revenues in the statements of operations.

Share-Based Expense

Share-Based Expense

ASC 718,” Compensation - Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50,” Equity - Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Share-based expense totaled $40,071 and $61,684 for the six months ending June 30, 2017 and 2016, respectively.

Fair value measurements

Fair value measurements

Fair value is defined as the price that the Company would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent counter-party in the principal market or in the absence of a principal market, the most advantageous market for the investment or liability. A three-tier hierarchy is established to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs); and establishes a classification of fair value measurements for disclosure purposes.

The hierarchy is summarized in the three broad levels listed below:

Level 1	-	quoted prices in active markets for identical assets and liabilities
Level 2	-	other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.)
Level 3	-	significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities).

In accordance with Accounting Standards Codification (“ASC”) 815, the Company’s debt derivative liabilities are measured at fair value on a recurring basis, and are level 3 measurements in the three-tier fair value hierarchy.

There were no transfers between the levels of the fair value hierarchy during the three and six months ended June 30, 2017 and 2016.

Fair value of financial instruments

 Fair value of financial instruments

The Company’s financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

The following table summarizes fair value measurements by level at June 30, 2017 and December 31, 2016 measured at fair value on a recurring basis:

June 30, 2017	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	709,734	$	709,734

December 31, 2016	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	2,577,652	$	2,577,652

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In May 2014, the FASB issued an accounting standards update which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

In February 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-06, “Plan Accounting: Defined Benefit Pension Plans (Topic 960); Defined Contribution Pension Plans (Topic 962); Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting.” Among other things, the amendments require a plan’s interest in that master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. The amendments also remove the requirement to disclose the percentage interest in the master trust for plans with divided interests and require that all plans disclose the dollar amount of their interest in each of those general types of investments. The amendments require all plans to disclose: (a) their master trust’s other asset and liability balances; and (b) the dollar amount of the plan’s interest in each of those balances. Lastly, the amendments eliminate redundant investment disclosures (e.g., those required by Topics 815 and 820) relating to 401(h) account assets. Effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The amendments should be applied retrospectively to each period for which financial statements are presented. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its consolidated financial statements.

In February 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The amendments clarify that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments also define the term in substance nonfinancial asset. The amendments clarify that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. A contract that includes the transfer of ownership interests in one or more consolidated subsidiaries is within the scope of Subtopic 610-20 if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. Effective at the same time as the amendments in Update 2014-09, Revenue from Contracts with Customers (Topic 606). Therefore, public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the amendments in this Update to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities should apply the amendments in this Update to annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. All other entities may apply the guidance earlier as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance earlier as of annual reporting periods beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance. An entity is required to apply the amendments in this Update at the same time that it applies the amendments in Update 2014-09. The Company is currently evaluating the potential impact this standard may have on its financial position and results of operations.

In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” These amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard will be effective for the Company on January 1, 2018, however, early adoption is permitted with prospective application to any business development transaction.

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Schedule of differences between reported amount and reporting currency denominated amount

	June 30, 2017		December 31, 2016		June 30, 2016
Spot Euro: USD exchange rate	$	1.14	$	1.05	$	1.11
Average Euro: USD exchange rate	$	1.06–1.10	$	1.08–1.12	$	1.11–1.12

Schedule of fair value measurements recurring and nonrecurring

June 30, 2017	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	709,734	$	709,734

December 31, 2016	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	2,577,652	$	2,577,652

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PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2017

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	June 30,			December 31,
	2017			2016
Furniture	$	5,915		$	5,915
Computers		18,886			18,886
		24,801			24,801
Accumulated Depreciation		(19,705	)		(17,593	)
Foreign currency translation effect		(2,147	)		(2,439	)
	$	2,949		$	4,769

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NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2017

Debt Instrument [Line Items]

Schedule of note payable

	June 30,		December 31,
	2017		2016
Promissory Notes - December 2016	$	51,000	$	51,000
Promissory Notes - January 2017		10,000		-
Less current portion of notes payable		61,000		51,000
Long-term notes payable	$	-	$	-

Notes Payable - Related Parties

Debt Instrument [Line Items]

Schedule of note payable

	June 30,		December 31,
	2017		2016
Promissory Notes	$	42,180	$	38,850
Less current portion of notes payable		42,180		38,850
Long-term notes payable	$	-	$	-

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CONVERTIBLE NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2017

Convertible Notes Payable [Abstract]

Schedule of convertible note payable

	June 30,			December 31,
	2017			2016
Convertible Note - December 2015	$	350,000		$	350,000
Convertible Note - February 2016		-			30,000
Convertible Note - March 2016		250,000			250,000
Convertible Notes - May 2016		62,500			75,000
Convertible Note - June 2016		-			15,000
Convertible Notes - September 2016		132,654			201,511
Convertible Notes -October 2016		80,162			148,798
Convertible Notes - November 2016		25,000			25,000
Convertible Notes - December 2016		75,000			75,000
Convertible Notes - March 2017		168,500			-
Convertible Notes - April 2017		223,500			-
Convertible Notes - June 2017		83,000			-
		1,450,316			1,170,309
Less debt discount and debt issuance cost		(273,136	)		(414,118	)
		1,177,180			756,191
Less current portion of convertible notes payable		1,177,180			756,191
Long-term convertible notes payable	$	-		$	-

Schedule of outstanding and exercisable warrants

Warrants Outstanding						Warrants Exercisable
Number of		Weighted Average Remaining		Weighted Average		Number of		Weighted Average
Shares		Contractual life (in years)		Exercise Price		Shares		Exercise Price
	250,000		3.75	$	0.4000		250,000	$	0.4000
	75,000		2.18	$	0.0048		75,000	$	0.0048
	50,755		2.18	$	0.0048		50,755	$	0.0048
	75,000		2.20	$	0.0048		75,000	$	0.0048
	2,000,000		2.59	$	0.2500		2,000,000	$	0.2500
	1,000,000		0.65	$	0.0200		1,000,000	$	0.0200
	124,000		1.67	$	0.0200		124,000	$	0.0200
	12,500		1.67	$	0.0200		12,500	$	0.0200
	3,587,255			$	0.1739		3,587,255

Schedule of warrants activity

	Warrants Outstanding
			Weighted Average
	Shares		Exercise Price
Balances as of December 31, 2016		450,755	$	0.23
Granted		3,136,500		0.17
Exercised		-		-
Forfeited/canceled		-		-
Balances as of June 30, 2017		3,587,255	$	0.17

XML

DERIVATIVE LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2017

Derivative Liability [Abstract]

Schedule of derivative liabilities

	Six Months Ended		Year Ended
	June 30, 2017		December 31, 2016
Expected term	0.07 - 3.99 years		0.10 - 5.00 years
Expected average volatility	100% - 177 %		98% - 169 %
Expected dividend yield		-		-
Risk-free interest rate	0.67%-1.89 %		0.36% - 1.93 %

Schedule of loss on derivative liability

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2016	$	2,577,652
Addition of new derivative liabilities upon issuance of convertible notes as debt discounts		161,255
Addition of new derivatives liabilities recognized as issuance of warrants as stock based compensation expense		30,196
Reduction of derivatives liabilities from conversion of convertible note to common shares		(224,526	)
Gain on change in fair value of the derivative liabilities		(1,834,843	)
Balance - June 30, 2017	$	709,734

Schedule of fair value of the option liability at each measurement date

	Six Months Ended
	June 30,
	2017			2016
Day one loss due to derivative liabilities on convertible notes and warrants	$	40,594		$	294,345
Gain on change in fair value of the derivative liabilities		(1,875,437	)		(30,096	)
(Gain) loss on change in the fair value of derivative liabilities	$	(1,834,843	)	$	264,249

XML

CONCENTRATIONS (Tables)

6 Months Ended

Jun. 30, 2017

Risks and Uncertainties [Abstract]

Schedule of information as customer that accounted to the Company's revenues

	Six Months Ended			Six Months Ended
Customer	June 30, 2017			June 30, 2016
EU   PWN		57	%		100	%
EU   Computer Profile		6	%		-	%
US   NRECA		37	%		-	%

XML

INCENTIVE STOCK PLANS (Tables)

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of stock options outstanding

	Options Outstanding
			Weighted-		Fair Value
	Number of		Average		on Grant		Intrinsic
	Shares		Exercise Price		Date		Value
Balances as of December 31, 2016		8,173,686	$	0.0587	$	71,630	$	2,997
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited/canceled		-		-		-		-
Balances as of June 30, 2017		8,173,686	$	0.0587	$	71,630	$	-

Schedule of outstanding and exercisable stock options

Options Outstanding						Options Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
	8,173,686		3.48	$	0.0587		2,724,562	$	0.0489

XML

ORGANIZATION AND BUSINESS (Detail Textuals) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ (4,530,844)	$ (5,255,277)
Working capital deficit	$ 2,956,957

XML

SIGNIFICANT ACCOUNTING POLICIES (Details)	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items]
Spot Euro: USD exchange rate	1.14	1.05	1.11
Minimum
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items]
Average Euro: USD exchange rate	1.06	1.08	1.11
Maximum
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items]
Average Euro: USD exchange rate	1.10	1.12	1.12

XML

SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Assets
Assets
Liabilities
Derivative liabilities	709,734	2,577,652
Level 1
Assets
Assets
Liabilities
Derivative liabilities
Level 2
Assets
Assets
Liabilities
Derivative liabilities
Level 3
Assets
Assets
Liabilities
Derivative liabilities	$ 709,734	$ 2,577,652

XML

SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals)	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 EUR (€)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 EUR (€)
Accounting Polices [Line Items]
Share-based Compensation	$ 11,887	$ 10,842	$ 40,071	$ 61,684
U.S. bank
Accounting Polices [Line Items]
Cash held in accounts	8,087		8,087			$ 9,971
Netherlands
Accounting Polices [Line Items]
Cash held in accounts	$ 4,087		$ 4,087		€ 3,585	$ 3,203	€ 3,050

XML

PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	$ 24,801	$ 24,801
Accumulated Depreciation	(19,705)	(17,593)
Foreign currency translation effect	(2,147)	(2,439)
Property and equipment, net	2,949	4,769
Furniture
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	5,915	5,915
Computers
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	$ 18,886	$ 18,886

XML

PROPERTY AND EQUIPMENT (Detail Textuals) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 1,065	$ 1,287	$ 2,112	$ 2,673

XML

NOTES PAYABLE (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Less current portion of notes payable	$ 61,000	$ 51,000
Long-term notes payable
Promissory Notes - December 2016
Debt Instrument [Line Items]
Promissory Notes	51,000	51,000
Promissory Notes - January 2017
Debt Instrument [Line Items]
Promissory Notes	10,000
Notes Payable - Related Parties
Debt Instrument [Line Items]
Promissory Notes	42,180	38,850
Less current portion of notes payable	42,180	38,850
Long-term notes payable

XML

NOTES PAYABLE (Detail Textuals)	1 Months Ended		3 Months Ended	6 Months Ended
	Dec. 31, 2016 USD ($)	Dec. 31, 2016 EUR (€)	Jun. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jan. 26, 2017 USD ($)	Dec. 30, 2016 USD ($)	Aug. 29, 2016 USD ($)	Aug. 29, 2016 EUR (€)	Jun. 30, 2016 EUR (€)	Jun. 29, 2016 USD ($)	Jun. 29, 2016 EUR (€)
Debt Instrument [Line Items]
Accrued interest	$ 28		$ 5,935	$ 5,935
Unamortized debt discount	414,118		273,136	273,136
Amortization of debt discount and debt issue cost				354,736	$ 87,994
Convertible note	756,191		1,177,180	1,177,180
Loss on extinguishment of debt			38,625	108,014
Promissory Note
Debt Instrument [Line Items]
Convertible debt, interest rate						20.00%	20.00%
Principle amount of debt						$ 10,000	$ 51,000
Promissory Note | Notes Payable - Related Parties
Debt Instrument [Line Items]
Accrued interest	2,046		$ 3,895	$ 3,895
Convertible debt, interest rate					8.00%			8.00%	8.00%	8.00%	8.00%	8.00%
Principle amount of debt					$ 11,400			$ 39,900	€ 35,000	€ 10,000	$ 11,400	€ 10,000
Amount of note payable repaid	$ 18,900	€ 18,000

XML

CONVERTIBLE NOTES PAYABLE (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Convertible notes payable	$ 1,450,316	$ 1,170,309
Less debt discount and debt issuance cost	(273,136)	(414,118)
Total	1,177,180	756,191
Convertible notes payable, net of unamortized debt discount of $273,136 and $414,118, respectively	1,177,180	756,191
Long-term convertible notes payable
Convertible Note | December 2015
Debt Instrument [Line Items]
Convertible notes payable	350,000	350,000
Convertible Note | February 2016
Debt Instrument [Line Items]
Convertible notes payable		30,000
Convertible Note | March 2016
Debt Instrument [Line Items]
Convertible notes payable	250,000	250,000
Convertible Note | May 2016
Debt Instrument [Line Items]
Convertible notes payable	62,500	75,000
Convertible Note | June 2016
Debt Instrument [Line Items]
Convertible notes payable		15,000
Convertible Note | September 2016
Debt Instrument [Line Items]
Convertible notes payable	132,654	201,511
Convertible Note | October 2016
Debt Instrument [Line Items]
Convertible notes payable	80,162	148,798
Convertible Note | November 2016
Debt Instrument [Line Items]
Convertible notes payable	25,000	25,000
Convertible Note | December 2016
Debt Instrument [Line Items]
Convertible notes payable	75,000	75,000
Convertible Note | March 2017
Debt Instrument [Line Items]
Convertible notes payable	168,500
Convertible Note | April 2017
Debt Instrument [Line Items]
Convertible notes payable	223,500
Convertible Note | June 2017
Debt Instrument [Line Items]
Convertible notes payable	$ 83,000

XML

CONVERTIBLE NOTES PAYABLE (Details 1) - $ / shares	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Class of Warrant or Right [Line Items]
Warrants Outstanding, Number Of Shares	3,587,255	450,755
Warrants Outstanding, Weighted Average Exercise Price	$ 0.17	$ 0.23
Warrants Exercisable, Number of Shares	3,587,255
Weighted Average Exercise Price $ 0.4000
Class of Warrant or Right [Line Items]
Warrants Outstanding, Number Of Shares	250,000
Warrants Outstanding, Weighted Average Remaining Contractual life (in years)	3 years 9 months
Warrants Outstanding, Weighted Average Exercise Price	$ 0.4000
Warrants Exercisable, Number of Shares	250,000
Warrants Exercisable, Weighted Average Exercise Price	$ 0.4000
Weighted Average Exercise Price $ 0.0048
Class of Warrant or Right [Line Items]
Warrants Outstanding, Number Of Shares	75,000
Warrants Outstanding, Weighted Average Remaining Contractual life (in years)	2 years 2 months 5 days
Warrants Outstanding, Weighted Average Exercise Price	$ 0.0048
Warrants Exercisable, Number of Shares	75,000
Warrants Exercisable, Weighted Average Exercise Price	$ 0.0048
Weighted Average Exercise Price $ 0.0048
Class of Warrant or Right [Line Items]
Warrants Outstanding, Number Of Shares	50,755
Warrants Outstanding, Weighted Average Remaining Contractual life (in years)	2 years 2 months 5 days
Warrants Outstanding, Weighted Average Exercise Price	$ 0.0048
Warrants Exercisable, Number of Shares	50,755
Warrants Exercisable, Weighted Average Exercise Price	$ 0.0048
Weighted Average Exercise Price $ 0.0048
Class of Warrant or Right [Line Items]
Warrants Outstanding, Number Of Shares	75,000
Warrants Outstanding, Weighted Average Remaining Contractual life (in years)	2 years 2 months 12 days
Warrants Outstanding, Weighted Average Exercise Price	$ 0.0048
Warrants Exercisable, Number of Shares	75,000
Warrants Exercisable, Weighted Average Exercise Price	$ 0.0048
Weighted Average Exercise Price $ 0.2500
Class of Warrant or Right [Line Items]
Warrants Outstanding, Number Of Shares	2,000,000
Warrants Outstanding, Weighted Average Remaining Contractual life (in years)	2 years 7 months 2 days
Warrants Outstanding, Weighted Average Exercise Price	$ 0.2500
Warrants Exercisable, Number of Shares	2,000,000
Warrants Exercisable, Weighted Average Exercise Price	$ 0.2500
Weighted Average Exercise Price $ 0.0200
Class of Warrant or Right [Line Items]
Warrants Outstanding, Number Of Shares	1,000,000
Warrants Outstanding, Weighted Average Remaining Contractual life (in years)	7 months 24 days
Warrants Outstanding, Weighted Average Exercise Price	$ 0.0200
Warrants Exercisable, Number of Shares	1,000,000
Warrants Exercisable, Weighted Average Exercise Price	$ 0.0200
Weighted Average Exercise Price $ 0.0200
Class of Warrant or Right [Line Items]
Warrants Outstanding, Number Of Shares	124,000
Warrants Outstanding, Weighted Average Remaining Contractual life (in years)	1 year 8 months 1 day
Warrants Outstanding, Weighted Average Exercise Price	$ 0.0200
Warrants Exercisable, Number of Shares	124,000
Warrants Exercisable, Weighted Average Exercise Price	$ 0.0200
Weighted Average Exercise Price $ 0.0200
Class of Warrant or Right [Line Items]
Warrants Outstanding, Number Of Shares	12,500
Warrants Outstanding, Weighted Average Remaining Contractual life (in years)	1 year 8 months 1 day
Warrants Outstanding, Weighted Average Exercise Price	$ 0.0200
Warrants Exercisable, Number of Shares	12,500
Warrants Exercisable, Weighted Average Exercise Price	$ 0.0200

XML

CONVERTIBLE NOTES PAYABLE (Details 2)	6 Months Ended
	Jun. 30, 2017 $ / shares shares
Warrants Outstanding Shares
Balances as of December 31, 2016 | shares	450,755
Granted | shares	3,136,500
Exercised | shares
Forfeited/canceled | shares
Balances as of June 30, 2017 | shares	3,587,255
Weighted- Average Exercise Price
Balances as of December 31, 2016 | $ / shares	$ 0.23
Granted | $ / shares	0.17
Exercised | $ / shares
Forfeited/canceled | $ / shares
Balances as of June 30, 2017 | $ / shares	$ 0.17

XML

CONVERTIBLE NOTES PAYABLE (Detail Textuals)

1 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

Jul. 22, 2016

USD ($)

$ / shares

shares

Dec. 21, 2015

USD ($)

Day

Jun. 30, 2017

USD ($)

$ / shares

Jun. 30, 2017

USD ($)

$ / shares

shares

Jun. 30, 2016

USD ($)

Dec. 31, 2016

USD ($)

shares

Jan. 26, 2017

USD ($)

Dec. 30, 2016

USD ($)

Debt Instrument [Line Items]

Amortization of debt discount and debt issue cost

$ 354,736

$ 87,994

Gain on extinguishment of debt

$ 38,625

108,014

Derivative liabilities

709,734

709,734

$ 2,577,652

Derivative liability recognized as debt discount

161,255

330,562

Day one loss due to derivative on convertible note

(40,594)

(294,345)

Change in fair value of derivative liability

1,875,437

30,096

Promissory Note

Debt Instrument [Line Items]

Principle amount of debt

$ 10,000

$ 51,000

Percentage of promissory note

20.00%

20.00%

Convertible promissory notes

Debt Instrument [Line Items]

Principle amount of debt

475,000

$ 475,000

$ 820,308

Number of shares called by warrants | shares

450,755

Debt conversion, description

Conversion prices are typically based on the discounted (25% to 40% discount) lowest trading prices of the Company's shares during various periods prior to conversion. Conversion price of certain notes are $0.04 per share.

Conversion prices are typically based on the discounted (20% - 25% discount) lowest trading prices of the Company's shares during various periods prior to conversion. Certain notes are subject to adjustment to not convert in a value band, not lower than $4,000,000 to $6,000,000 or higher than $12,000,000 to $18,000,000, divided by the total number of shares of common stock outstanding immediately prior to the conversion date.

Discount and Financing cost

$ 52,500

$ 52,500

Gain on extinguishment of debt

$ 56,534

Amount of convertible note converted

$ 150,000

$ 194,992

Market trading price per share | shares

941,620

Conversion price | $ / shares

$ 0.27

$ 0.04

$ 0.04

Derivative liabilities

$ 160,771

$ 709,734

$ 709,734

$ 2,577,652

Derivative liability recognized as debt discount

232,045

330,562

Day one loss due to derivative on convertible note

40,594

$ 294,345

Amount of accrued interest

$ 9,688

Number of shares issued upon conversion of debt | shares

29,990,469

Description of convertible note ownership limitations

Ownership Limitations. The 10% Convertible Note is not convertible to the extent that (a) the number of shares of our common stock beneficially owned by the Investor and (b) the number of shares of our common stock issuable upon the conversion of the 10% Convertible Note or otherwise would result in the beneficial ownership by holder of more than 4.99% of our then outstanding common stock. This ownership limitation can be increased or decreased to any percentage not exceeding 9.99% by the Investor upon 61 days’ notice to us.

Convertible notes payable, redemption days

180 days

Convertible promissory notes | Minimum

Debt Instrument [Line Items]

Percentage of promissory note

1.00%

1.00%

8.00%

Term of debt instrument

9 months

6 months

Conversion price percentage

25.00%

Convertible notes payable redemption percentage

135.00%

Convertible promissory notes | Maximum

Debt Instrument [Line Items]

Percentage of promissory note

18.00%

18.00%

20.00%

Term of debt instrument

12 months

18 months

Conversion price percentage

40.00%

Convertible notes payable redemption percentage

150.00%

Convertible promissory notes | Share Exchange Agreement | Promissory Note | Insight Innovators, B.V. | Investor

Debt Instrument [Line Items]

Principle amount of debt

$ 500,000

Percentage of promissory note

10.00%

Assumed accrued interest

$ 3,838

Conversion price percentage

75.00%

Trading days | Day

10

Convertible notes conversion, description

(i) lower than $4,000,000 divided by the total number of shares of Common Stock outstanding immediately prior to the conversion date; or (ii) greater than $12,000,000 divided by the total number of shares of common stock outstanding immediately prior to the conversion date.

XML

CONVERTIBLE NOTES PAYABLE (Detail Textuals 1)	6 Months Ended		12 Months Ended
	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) Day $ / shares shares
Debt Instrument [Line Items]
Proceeds from issuance of convertible note payable | $	$ 413,346	$ 325,000
Exercise price of warrants | $ / shares	$ 0.17		$ 0.23
Accrued interest | $	$ 5,935		$ 28
Convertible notes, current | $	1,177,180		756,191
Convertible Note
Debt Instrument [Line Items]
Principle amount of debt | $	$ 475,000		$ 820,308
Number of shares called by warrants			450,755
Number of warrants issued	3,136,500
Convertible Note | March 2016
Debt Instrument [Line Items]
Principle amount of debt | $			$ 250,000
Number of shares called by warrants			250,000
Number of warrants exercisable into common stock			250,000
Term of warrants (in years)			5 years
Exercise price of warrants | $ / shares			$ 0.40
Convertible Note | Convertible Note - September 12, 2016
Debt Instrument [Line Items]
Principle amount of debt | $			$ 101,511
Number of shares called by warrants			50,775
Number of warrants exercisable into common stock			50,775
Term of warrants (in years)			1 year
Percentage of lowest trading price			120.00%
Number of trading day prior to exercise date | Day			20
Convertible Note | Convertible Note - September 12, 2016
Debt Instrument [Line Items]
Principle amount of debt | $			$ 150,000
Proceeds from issuance of convertible note payable | $			$ 150,000
Number of shares called by warrants			75,000
Number of warrants exercisable into common stock			75,000
Term of warrants (in years)			1 year
Percentage of lowest trading price			120.00%
Number of trading day prior to exercise date | Day			20
Convertible Note | Convertible Note - September 21, 2016
Debt Instrument [Line Items]
Principle amount of debt | $			$ 150,000
Proceeds from issuance of convertible note payable | $			$ 150,000
Number of shares called by warrants			75,000
Number of warrants exercisable into common stock			75,000
Percentage of lowest trading price			120.00%
Number of trading day prior to exercise date | Day			20
Convertible Note | Convertible Note - January 30, 2017
Debt Instrument [Line Items]
Number of shares called by warrants	2,000,000
Number of warrants exercisable into common stock	2,000,000
Term of warrants (in years)	3 years
Exercise price of warrants | $ / shares	$ 0.25
Convertible Note | Convertible Note - February 21, 2017
Debt Instrument [Line Items]
Number of shares called by warrants	1,000,000
Number of warrants exercisable into common stock	1,000,000
Term of warrants (in years)	3 years
Exercise price of warrants | $ / shares	$ 0.02
Convertible Note | Convertible Note - February 28, 2017
Debt Instrument [Line Items]
Number of shares called by warrants	136,500
Number of warrants exercisable into common stock	136,500
Term of warrants (in years)	2 years
Exercise price of warrants | $ / shares	$ 0.02

XML

DERIVATIVE LIABILITIES (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Derivative Liabilities [Line Items]
Expected dividend yield
Minimum
Derivative Liabilities [Line Items]
Expected term	26 days	1 month 6 days
Expected average volatility	100.00%	98.00%
Risk-free interest rate	0.67%	0.36%
Maximum
Derivative Liabilities [Line Items]
Expected term	3 years 11 months 27 days	5 years
Expected average volatility	177.00%	169.00%
Risk-free interest rate	1.89%	1.93%

XML

DERIVATIVE LIABILITIES (Details 1)	6 Months Ended
	Jun. 30, 2017 USD ($)
Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2016	$ 2,577,652
Addition of new derivative liabilities upon issuance of convertible notes as debt discounts	161,255
Addition of new derivatives liabilities recognized as issuance of warrants as stock based compensation expense	30,196
Reduction of derivatives liabilities from conversion of convertible note to common shares	(224,526)
Gain on change in fair value of the derivative liabilities	(1,834,843)
Balance - June 30, 2017	$ 709,734

XML

DERIVATIVE LIABILITIES (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Derivative Liability [Abstract]
Day one loss due to derivative liabilities on convertible notes and warrants			$ 40,594	$ 294,345
Gain on change in fair value of the derivative liabilities			(1,875,437)	(30,096)
(Gain) loss on change in the fair value of derivative liabilities	$ 442,463	$ (911,901)	$ (1,834,843)	$ 264,249

XML

RELATED PARTY CONSIDERATIONS (Detail Textuals)		3 Months Ended		6 Months Ended
	Jul. 01, 2014 EUR (€)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2017 EUR (€)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Related Party Transaction [Line Items]
Management fees		$ 125,690	$ 125,968	$ 248,138		$ 250,520
Management fees payable - related parties		457,548		457,548			$ 296,816
Accrued interest - related parties		$ 35,148		35,148			$ 9,172
Insight
Related Party Transaction [Line Items]
Payments for rent per month	€ 7,500			$ 1,590	€ 1,500

XML

CONCENTRATIONS (Details) - Revenue - Customer concentration risk	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
EU | PWN
Concentration Risk [Line Items]
Concentration risk percentage	57.00%	100.00%
EU | Computer Profile
Concentration Risk [Line Items]
Concentration risk percentage	6.00%
US | NRECA
Concentration Risk [Line Items]
Concentration risk percentage	37.00%

XML

CONCENTRATIONS (Detail Textuals) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Concentration Risk [Line Items]
Revenues	$ 18,356	$ 5,241	$ 36,589	$ 6,973
Insight Innovators, B.V.
Concentration Risk [Line Items]
Revenues			$ 23,089

XML

STOCKHOLDERS' DEFICIT (Detail Textuals) - $ / shares	6 Months Ended
	Jun. 30, 2017	Jun. 08, 2017	Dec. 31, 2016
Stockholders Equity Note [Line Items]
Capital stock		2,010,000,000
Common stock, shares authorized	2,000,000,000		2,000,000,000
Common stock, par value (in dollars per share)	$ 0.001		$ 0.001
Preferred stock, shares authorized	10,000,000		10,000,000
Preferred stock, par value (in dollars per share)	$ 0.001		$ 0.001
Number of common stock shares issued upon conversion	3,579,256
Series A convertible preferred stock
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized	808,000		808,000
Preferred stock, par value (in dollars per share)	$ 0.001		$ 0.001
Preferred stock, stated value per share (in dollars per share)	$ 1.00		$ 1.00
Preferred stock, voting rights description	the shares have no voting rights, provided, however, that for so long as any shares are outstanding, we many not, without the affirmative vote of at least 51% of the then outstanding shares of the Series A Preferred, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred or alter or amend the Certificate of Designation, (b) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a liquidation (as defined) senior to, or otherwise in pari passu with, the Series A Preferred, (c) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders, (d) increase the number of authorized shares of Series A Preferred, or (e) enter into any agreement with respect to any of the foregoing.
Conversion price	$ 0.1778
Conversion price post stock split	$ 0.0296
Number of shares converted	105,946
Number of common stock shares issued upon conversion	3,579,256
Preferred stock, shares issued	94,333		200,279
Preferred stock, shares outstanding	94,333		200,279

XML

STOCKHOLDERS' DEFICIT (Detail Textuals 1) - USD ($)			6 Months Ended
	May 12, 2017	May 11, 2017	Jun. 30, 2017	Dec. 31, 2016
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized			10,000,000	10,000,000
Number of shares issued			1,365,000
Value of shares issued			$ 27,300
Series B Preferred Stock
Stockholders Equity Note [Line Items]
Preferred stock, shares authorized		1,500,000	1,500,000	1,500,000
Preferred stock, voting rights description		250 votes
Percentage of stockholders votes		51.00%
Series B Preferred Stock | Investment Agreements | Arend D. Verweij
Stockholders Equity Note [Line Items]
Number of shares issued	500,000
Value of shares issued	$ 500
Shares issued, price per share	$ 0.001
Series B Preferred Stock | Investment Agreements | Geurt van Wijk
Stockholders Equity Note [Line Items]
Number of shares issued	500,000
Value of shares issued	$ 500
Shares issued, price per share	$ 0.001
Series B Preferred Stock | Investment Agreements | Remy de Vries
Stockholders Equity Note [Line Items]
Number of shares issued	500,000
Value of shares issued	$ 500
Shares issued, price per share	$ 0.001

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STOCKHOLDERS' DEFICIT (Detail Textuals 2) - USD ($)	1 Months Ended	3 Months Ended	6 Months Ended
	Jul. 22, 2016	Jun. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Stockholders Equity Note [Line Items]
Common stock, shares authorized		2,000,000,000	2,000,000,000	2,000,000,000
Common stock, par value (in dollars per share)		$ 0.001	$ 0.001	$ 0.001
Common stock, voting rights			one vote
Aggregate shares issued during period			34,934,725
Number of shares issued			1,365,000
Value of shares issued			$ 27,300
Number of common stock shares issued upon conversion		3,579,256	3,579,256
Common stock, shares issued		132,392,122	132,392,122	97,457,397
Common stock, shares outstanding		132,392,122	132,392,122	97,457,397
Gain on extinguishment of debt		$ 38,625	$ 108,014
Series A convertible preferred stock
Stockholders Equity Note [Line Items]
Number of common stock shares issued upon conversion		3,579,256	3,579,256
Number of shares converted			105,946
Convertible Note
Stockholders Equity Note [Line Items]
Number of shares issued upon conversion of debt			29,990,469
Amount of convertible note converted	$ 150,000		$ 194,992
Amount of accrued interest			9,688
Value of common stock in a conversion of Convertible Notes			$ 321,192
Gain on extinguishment of debt	$ 56,534

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INCENTIVE STOCK PLANS (Details) - Stock Option - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2015
Options Outstanding, Number of Shares
Balances as of December 31, 2016	8,173,686
Granted		8,173,686
Exercised
Forfeited/canceled
Balances as of June 30, 2017	8,173,686
Options Outstanding, Weighted- Average Exercise Price
Balances as of December 31, 2016	$ 0.0587
Granted
Exercised
Forfeited/canceled
Balances as of June 30, 2017	$ 0.0587
Options Outstanding, Fair Value on Grant Date
Balances as of December 31, 2016	$ 71,630
Granted
Exercised
Forfeited/canceled
Balances as of June 30, 2017	71,630
Intrinsic Value
Balances as of December 31, 2016	2,997
Granted
Exercised
Forfeited/canceled
Balances as of June 30, 2017

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INCENTIVE STOCK PLANS (Details 1) - Stock Option - $ / shares	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Number of Shares	8,173,686	8,173,686
Options Outstanding, Weighted Average Remaining Contractual life (in years)	3 years 5 months 23 days
Options Outstanding, Weighted Average Exercise Price	$ 0.0587	$ 0.0587
Options Exercisable, Number of Shares	2,724,562
Options Exercisable, Weighted Average Exercise Price	$ 0.0489

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INCENTIVE STOCK PLANS (Detail Textuals) - Stock Option - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2015	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock options granted			8,173,686
Weighted average value granted options	$ 0.0587			$ 0.0587
Weighted-average remaining contract term of outstanding options	3 years 5 months 23 days
Term of options granted	5 years
Compensation cost expected to be recognized for unvested options	$ 17,604
Aggregate intrinsic value of options outstanding				$ 2,997
Share based compensation	$ 9,875	$ 21,684
Number of options exercisable	2,724,562
Number of options outstanding, expected to vest	5,449,124
1/3 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average value granted options			$ 0.04893
1/3 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average value granted options			0.05873
1/3 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average value granted options			$ 0.06852
Messrs. Verweij, van Wijk and de Vrie
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value of options outstanding			$ 71,630

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COMMITMENTS AND CONTINGENCIES (Detail Textuals)		3 Months Ended		6 Months Ended
	Jul. 01, 2014 EUR (€)	Jun. 30, 2017 USD ($) ft²	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) ft²	Jun. 30, 2017 EUR (€)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Commitments And Contingencies [Line Items]
Total rent expenses		$ 4,950	$ 5,040	$ 9,720		$ 10,035
Rent payable		$ 20,691		$ 20,691			$ 17,152
Insight
Commitments And Contingencies [Line Items]
Leases space in Netherlands from related party | ft²		4,000		4,000
Payments for rent per month	€ 7,500			$ 1,590	€ 1,500

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COMMITMENTS AND CONTINGENCIES (Detail Textuals 1) - 1 months ended Dec. 21, 2015 - Employment Agreement

USD ($)

Day

$ / shares

shares

EUR (€)

Day

shares

Arend D. Verweij

Commitments And Contingencies [Line Items]

Term of agreement

2 years

2 years

Renewable period of agreement

1 year

1 year

Notice period prior expiration

30 days

30 days

Annual salary | $

$ 180,000

Increase in annual salary | $

$ 252,000

Number of customers have a minimum of 500 users of software system | Day

3

3

Performance bonus up to percentage of base salary

100.00%

100.00%

Number of stock options granted | shares

3,065,130

3,065,130

Vesting anniversaries of stock options | Day

3

3

Entitled period of paid vacation

Five weeks

Five weeks

Monthly health insurance allowance | $

$ 1,500

Terms of employment agreement termination

(i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

(i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

Arend D. Verweij | Year 1

Commitments And Contingencies [Line Items]

Vesting exercise price

$ 0.04893

Arend D. Verweij | Year 2

Commitments And Contingencies [Line Items]

Vesting exercise price

0.05873

Arend D. Verweij | Year 3

Commitments And Contingencies [Line Items]

Vesting exercise price

$ 0.06852

Geurt van Wijk

Commitments And Contingencies [Line Items]

Term of agreement

2 years

2 years

Renewable period of agreement

1 year

1 year

Notice period prior expiration

30 days

30 days

Annual salary | €

€ 120,000

Increase in annual salary | €

€ 150,000

Number of customers have a minimum of 500 users of software system | Day

3

3

Performance bonus up to percentage of base salary

75.00%

75.00%

Number of stock options granted | shares

2,554,278

2,554,278

Vesting anniversaries of stock options | Day

3

3

Entitled period of paid vacation

Five weeks

Five weeks

Monthly vehicle allowance limited upto annual base salary EURO 150,000 | €

€ 1,350

Terms of employment agreement termination

(i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

(i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

Geurt van Wijk | Year 1

Commitments And Contingencies [Line Items]

Vesting exercise price

$ 0.04893

Geurt van Wijk | Year 2

Commitments And Contingencies [Line Items]

Vesting exercise price

0.05873

Geurt van Wijk | Year 3

Commitments And Contingencies [Line Items]

Vesting exercise price

$ 0.06852

Remy de Vries

Commitments And Contingencies [Line Items]

Term of agreement

2 years

2 years

Renewable period of agreement

1 year

1 year

Notice period prior expiration

30 days

30 days

Annual salary | €

€ 120,000

Increase in annual salary | €

€ 150,000

Number of customers have a minimum of 500 users of software system | Day

3

3

Performance bonus up to percentage of base salary

75.00%

75.00%

Number of stock options granted | shares

2,554,278

2,554,278

Vesting anniversaries of stock options | Day

3

3

Entitled period of paid vacation

Five weeks

Five weeks

Monthly vehicle allowance limited upto annual base salary EURO 150,000 | €

€ 1,350

Terms of employment agreement termination

(i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

(i) be paid his then current base salary earned through the date of termination, together with all reimbursements and other amounts owed to him through such date pursuant, including any accrued but unused vacation/holiday time, (ii) an amount equal to one hundred percent (100%) of the greater of (A) his bonus for the year of termination or (B) the bonus actually earned for the year prior to the year of termination, if any, (iii) a lump-sum severance payment severance in an amount equal to the lesser of (A) one (1) times the base salary in the year of such termination or (B) the amount of base salary owed to him for the remainder of the first two years of his employment, (iv) we will continue to provide him with those medical, life and disability insurance benefits, if any, which are provided to him on the last day of his employment by us (or reimburse him for COBRA) for a period of five years, and (v) all stock options granted to him shall immediately vest, and any transfer restrictions thereon shall cease to be effective.

Remy de Vries | Year 1

Commitments And Contingencies [Line Items]

Vesting exercise price

$ 0.04893

Remy de Vries | Year 2

Commitments And Contingencies [Line Items]

Vesting exercise price

0.05873

Remy de Vries | Year 3

Commitments And Contingencies [Line Items]

Vesting exercise price

$ 0.06852

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SUBSEQUENT EVENTS (Details Textuals) - Convertible promissory notes - USD ($)

1 Months Ended

2 Months Ended

Jul. 10, 2017

Aug. 02, 2017

Aug. 21, 2017

Jun. 30, 2017

Dec. 31, 2016

Subsequent Event [Line Items]

Principle amount of debt

$ 475,000

$ 820,308

Subsequent Event

Subsequent Event [Line Items]

Principle amount of debt

$ 21,988

Number of shares exchanged

11,854,813

Convertible Promissory Note. conversion feature description

The Amendments extend the maturity date for each of the Convertible Notes to six months from the Effective Date and, so long as the Convertible Note is not in default, the Company has the right to extend its Maturity Date for an additional period of six months. The Amendments also revise the conversion price under the Convertible Note to mean 50% multiplied by the lowest trading price for the Company's Common Stock during the twenty trading day period prior to the date of conversion. In the event that shares of the Company's Common Stock are not deliverable via DWAC following the conversion of any amount under the Convertible Note, the holder shall be entitled to an additional 10% discount. The Company agreed to increase the number of authorized shares of its Common Stock covenants that within 30 days from the Effective Date to an amount that will allow it to and keep available out of its authorized and unissued shares a number of shares of Common Stock at least equal to two times the number of shares of common stock issuable upon conversion of the entire principal amount plus accrued interest due under the Convertible Notes.

Subsequent Event | August 2, 2017 (the "Issue Date") | Unrelated third party investor

Subsequent Event [Line Items]

Principle amount of debt

$ 28,000

Percentage of promissory note

12.00%

Convertible Promissory Note. conversion feature description

Under the terms of the August 2017 Note, the Investor is entitled to, at any time beginning 180 days following the date of the August 2017 Note, convert the principal balance and any accrued interest (the "Amount Due") into shares of the Company's Common Stock, at a conversion price per share equal to 60% of the trading price for its Common Stock during the 20 trading day period prior to conversion, upon the terms and subject to the conditions of the August 2017 Note. The conversion price of the August 2017 Note is subject to adjustment in the event of stock splits, stock dividends and similar corporate events. The August 2017 Note contains representations, warranties, events of default, beneficial ownership limitations, prepayment options, and other provisions that are customary of similar instruments.

Convertible promissory note debt default interest rate

22.00%

Convertible note, maturity date

May 15, 2018

Convertible promissory note, prepayment terms

The August 2017 Note may be prepaid upon payment of the following optional prepayment amounts: 110% of the Amount Due during the period beginning on the Issue Date and ending 30 days thereafter, 115% of the total of the Amount Due during the period beginning 31 days after the Issue Date and ending 60 days after the Issue Date, 120% of the total of the Amount Due during the period beginning 61 days after the Issue Date and ending 90 days after the Issue Date, 125% of the total of the Amount Due during the period beginning 91 days after the Issue Date and ending 120 days after the Issue Date, 130% of the Amount Due interest during the period beginning 121 days after the Issue Date and ending 150 days after the Issue Date, or 135% of the Amount Due during the period beginning 151 days after the Issue Date and ending 180 days after the Issue Date. After 180 days after the Issue Date, the August 2017 Note may not be prepaid.

Debt description not convertible, description

The August 2017 Note is not convertible to the extent that (a) the number of shares of our common stock beneficially owned by the Investor and (b) the number of shares of our common stock issuable upon the conversion of the August 2017 Note or otherwise would result in the beneficial ownership by Investor of more than 4.99% of our then outstanding common stock. This ownership limitation can be increased or decreased to any percentage not exceeding 9.99% by the Investor upon 61 days notice to us.

Summit Trading, Ltd. ("Summit Trading") | Subsequent Event

Subsequent Event [Line Items]

Increase in principle amount of debt to include liquidated damages

$ 61,000

Percentage of promissory note

20.00%

Convertible Promissory Notes maturity period

matures twelve (12) months from the date of issuance

Summit Trading, Ltd. ("Summit Trading") | Subsequent Event | September 21, 2016

Subsequent Event [Line Items]

Principle amount of debt

$ 75,000

Summit Trading, Ltd. ("Summit Trading") | Subsequent Event | December 30, 2016

Subsequent Event [Line Items]

Increase in principle amount of debt to include liquidated damages

51,000

Summit Trading, Ltd. ("Summit Trading") | Subsequent Event | January 26, 2017

Subsequent Event [Line Items]

Increase in principle amount of debt to include liquidated damages

10,000

Susannah Forest | Subsequent Event | March 28, 2016

Subsequent Event [Line Items]

Principle amount of debt

250,000

Susannah Forest | Subsequent Event | December 18, 2015

Subsequent Event [Line Items]

Principle amount of debt

500,000

Monbridge, Inc. ("Monbridge") | Subsequent Event

Subsequent Event [Line Items]

Increase in principle amount of debt to include liquidated damages

60,000

Monbridge, Inc. ("Monbridge") | Subsequent Event | September 21, 2016

Subsequent Event [Line Items]

Principle amount of debt

75,000

Monbridge, Inc. ("Monbridge") | Subsequent Event | May 16, 2016

Subsequent Event [Line Items]

Principle amount of debt

62,500

Taconic Group, LLC ("Taconic") | Subsequent Event

Subsequent Event [Line Items]

Principle amount of debt

$ 94,333

Number of shares exchanged

94,333

Percentage of promissory note

20.00%

Convertible Promissory Notes maturity period

matures twelve (12) months from the date of issuance

Convertible Promissory Note. conversion feature description

The conversion price under the Taconic Note to mean 60% multiplied by the lowest trading price for the Company’s Common Stock during the twenty trading day period prior to the date of conversion. In the event that shares of the Company’s Common Stock are not deliverable via DWAC following the conversion of any amount under the Taconic Note, the holder shall be entitled to an additional 10% discount. The Company agreed to increase the number of authorized shares of its Common Stock covenants that within 30 days from the Effective Date to an amount that will allow it to and keep available out of its authorized and unissued shares a number of shares of Common Stock at least equal to two times the number of shares of common stock issuable upon conversion of the entire principal amount plus accrued interest due under the Taconic Notes.

Taconic Group, LLC ("Taconic") | Subsequent Event | September 12, 2016

Subsequent Event [Line Items]

Principle amount of debt

$ 150,000

Increase in principle amount of debt to include liquidated damages

60,000

R&T Sports Marketing, Inc | Subsequent Event | September 12, 2016

Subsequent Event [Line Items]

Principle amount of debt

$ 101,511