SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

 

(Mark One)

x    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2015

 

OR

 

¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to              

 

Commission file number 000-54545

 

ID GLOBAL SOLUTIONS CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware	46-2069547
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

 

160 E. Lake Brantley Drive

Longwood, Florida 32779

(Address of principal executive offices) (zip code)

 

407-951-8640

(Registrant's telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 past 90 days.

x Yes ¨ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.

 

x Yes £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.

 

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

(do not check if smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes     x No

 

Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date.

 

Class	Outstanding at May 4, 2015
Common Stock, par value $0.0001	165,063,289 shares
Documents incorporated by reference:	None

 

¨ No

 

 

TABLE OF CONTENTS

		Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.		4-6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.		13 - 15
Item 3. Quantative and Qualitative Disclosures About Market Risk.		15
Item 4. Controls and Procedures.		16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.		17
Item 1A. Risk Factors.		17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		17
Item 3. Defaults Upon Senior Securities.		17
Item 4. Mine Safety Disclosures.		18
Item 5. Other Information.		18
Item 6. Exhibits.		18

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

 

This report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about:

 

Ÿ

our lack of revenues and history of losses,

Ÿ

our ability to continue as a going concern,

Ÿ

our ability to raise additional working capital as necessary,

Ÿ

our ability to satisfy our obligations as they become due,

Ÿ

the failure to successfully commercialize our product or sustain market acceptance,

Ÿ

the reliance on third party agreements and relationships for development of our business,

Ÿ

the control exercised by our management,

Ÿ

the impact of government regulation on our business,

Ÿ

our ability to effectively compete,

Ÿ

the possible inability to effectively protect our intellectual property,

Ÿ

the lack of a public market for our securities and the impact of the penny stock rules on trading in our common stock should a public market ever be established.

 

 

You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in this report, in Part I. Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2014 and our other filings with the Securities and Exchange Commission. Other sections of this report include additional factors which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

 

OTHER PERTINENT INFORMATION

 

Unless specifically set forth to the contrary, when used in this report the terms “ID Global,” the “Company,” “we,” “our,” “us,” and similar terms refers to ID Global Solutions Corporation, a Delaware corporation formerly known as IIM Global Corporation and its subsidiaries..

 

The information which appears on our website www.iimglobalcorp.com is not part of this report.

 

 

ID Global Solution Corporation

(FORMERLY:IIM GLOBAL CORP.)

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		March 31, 2015				December 31, 2014
		(unaudited)				(audited)
Current Assets:
Cash		$	13,528			$	159,296
Total Current Assets			13,528				159,296
Property and equipment, net			18,566				21,582
Other assets			203,390				174,387
Intangible assets, net			418,052				421,774
Total assets		$	653,536			$	777,039
Current liabilities:
Accounts payable and accrued expenses		$	137,833			$	150,228
Related party payables			90,650				60,200
Notes payable - related parties, current portion			243,887				48,417
Total current liabilities			472,370				258,845
Commitments
Stockholders' Equity:
Common stock, $0.0001 par value, 300,000,000 shares authorized, 164,300,789 and 163,538,289 shares issued and authorized at March 31, 2015 and December 31, 2014, respectively			16,456				16,354
Additional paid-in capital			3,069,993				2,897,261
Accumulated deficit			(2,905,283	)			(2,395,421	)
Total stockholders' equity			181,166				518,194
Total liabilities and stockholders' equity		$	653,536			$	777,039

 

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

 

 

ID Global Solution Corporation

(FORMERLY:IIM GLOBAL CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

		March 31, 2015				March 31, 2014
Operating Expenses
Depreciation and amortization		$	11,271			$	11,624
Research and development			24,000				2,474
General and administrative			472,836				98,176
Total operating expenses			508,107				112,274
Loss from operations			(508,107	)			(112,274	)
Interest expense, net			1,755				9,550
Loss before income tax			(509,862	)			(121,824	)
Income tax expense			-				-
Net loss			(509,862	)			(121,824	)
Net loss per share: Basic and diluted		$	(0.00	)		$	(0.00	)
Weighted average shares outstanding: Basic and diluted			163,724,678				160,623,289

 

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

 

 

ID Global Solution Corporation

(FORMERLY:IIM GLOBAL CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

		March 31, 2015				March 31, 2014
Operating Activities
Net loss		$	(509,862	)		$	(121,824	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense			11,271				11,624
Share based payment for services			172,834				-
Changes in operating assets and liabilities:
Other assets			-				9,000
Accounts payable and accrued expenses			(12,393	)			(33,969	)
Due to related parties			30,450				(15,215	)
Net cash used in operating activities			(307,700	)			(150,384	)
Investing Activities
Investment in intangibles			(4,535	)			(8,990	)
Investment in other assets			(29,003	)			-
Net cash used in investing activities			(33,538	)			(8,990	)
Financing Activities
Proceeds from note payable to related parties			197,095				724,800
Payments of notes payable			(1,625	)			(349,425	)
Net cash provided by financing activities			195,470				375,375
Net change in cash			(145,768	)			216,001
Cash, beginning of the year			159,296				5,349
Cash, end of the period		$	13,528			$	221,350
Supplemental disclosure of cash flow information:
Interest paid			-			$	9,550

 

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

 

 

ID GLOBAL SOLUTIONS CORPORATION

(FORMLY IIM GLOBAL CORPORATION)
Notes to the Unaudited Condensed Consolidated Financial Statements

 

NOTE 1 – DESCRIPTION OF BUSINESS AND MERGER

 

ID Global Solutions Corporation (formerly IIM Global Corporation) (formerly Silverwood Acquisition Corporation) ("ID Global" or the "Company") was incorporated on September 21, 2011 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. ID Global has been in the developmental stage since inception. ID Global was formed to provide a method for a foreign or domestic private company to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934.

 

The Company is presently developing biometric products and solutions for global government, enterprise, and consumer markets.  The Company is focused on two specific technology areas: biometric handheld identification and biometric mobile payment.  The Company’s objective is to focus on two distinct markets, one being the Government market requiring solutions for addressing its security and associated identity management needs and the other the Consumer Mobile Payment market which is looking to define non obtrusive but highly secure solutions used for credit and debit card payments that can incorporate biometric technologies.  To address these markets the Company has invested into patenting and developing both hardware and software platforms focused to address these specific market requirements.  

 

Management believes that one of the advantages of the Company’s platform approach is that the platforms could be leveraged to support a wide variety of vertical markets in both the Government and Mobile Payment space and could be easily adapted to new markets requiring low cost and configurable solutions.  These vertical markets are as an example border control, public safety, enterprise security and asset management, seaports, small business inventory management, military and banking (identity verification).  There are no assurances, however, that management’s beliefs are correct.

 

The Company, however, has not completed development of a marketable product and needs to raise substantial additional capital to complete these efforts.

 

Going Concern

 

The Company has an accumulated deficit of $2,905,283 as of March 31, 2015. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or obtain additional financing from its stockholders and/or other third parties.

 

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues.

 

There is no assurance that the Company will ever be profitable. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. These unaudited condensed consolidated financial statements and the related notes should be read in conjunction with our audited consolidated financial statements and notes for the year ended December 31, 2014 which are included in our current report on Form 10-K, filed with the Securities and Exchange Commission on March 31, 2015.

 

 

Use of Estimates

 

In preparing these consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to equity instruments and share based payments.

 

Concentration of Credit Risk

 

The Company’s financial instruments that potentially expose the Company to a concentration of credit risk consist of cash, accounts payable, accrued expense and a related party payable. The Company’s cash is deposited at a financial institution and insured by the Federal Deposit Insurance Corporation (“FDIC”). At various times during the year, the Company may have exceeded this amount insured by the FDIC.

 

Income Taxes

 

The Company accounts for income taxes under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740 “Income Taxes.” Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

 

Property and Equipment, net

 

Property and equipment consisted of furniture and fixtures and computer equipment, and are stated at cost. Property and equipment are depreciated using the straight-line method over the estimated service lives of three to five years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property equipment are recorded upon disposal. All property and equipment were purchased by one of the Company’s officers and shareholder and were recorded as additional capital contribution in the accompanying balance sheet.

 

Other Assets

 

Other assets consist primarily of costs associated with the construction of HDR mobile biometric devises. As of March 31, 2015, the devises are still under construction and have not been placed in service. Upon completion, the amounts will be recorded as property and equipment and depreciated over their estimated useful lives.

 

Intangible Assets

 

Acquired intangible assets are amortized over their useful lives unless the lives are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. Amortization of finite-lived intangible assets is computed over the useful lives of the respective assets. The Company amortizes intangible assets over ten years.

 

Impairment of Long-Lived Assets

 

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset.

 

If the carrying amount of an asset exceeds its undiscounted estimated future cash flows, an impairment review is performed. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. There were no impairment charges during the three months period ended March 31, 2015 and for the year ended December 31, 2014.

 

 

Research and Development Costs

 

Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to vendors contracted to perform research projects and develop technology for the Company's products.  Research and development costs are expensed as incurred.

 

Net Loss per Common Share

 

The Company computes net loss per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

 

Fair Value Measurements

 

ASC 820, “Fair Value Measurements”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company had no assets or liabilities required to be recorded at fair value on a recurring basis at March 31, 2015 and December 31, 2014.

 

Recent Accounting Pronouncements

 

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-10, “Development Stage Entities”. The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP.  In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments in this update are applied retrospectively. The adoption of ASU 2014-10 removed the development stage entity financial reporting requirements from the Company.

 

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40). ASU 2014-15 defines management’s responsibilities to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern. The amendments in ASU 2014-15 will be effectively prospectively for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-15 for the year ended December 31, 2014.

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

 

NOTE 3 – INTANGIBLE ASSETS, NET

 

Intangible assets consist of the following:

 

		March 31,				December 31,
		2015				2014
		(unaudited)				(audited)
HDR		$	174,435			$	170,394
SRIO			122,223				121,730
New product development			10,818				10,818
Software			200,000				200,000
			507,476				502,942
Less: accumulated amortization			89,424				81,169
		$	418,052			$	421,774

 

Intangible assets consist of legal and global patent registration costs related to the Company’s technology HDR (Handheld biometric mobile devices) and SRIO (Biometric wallet devices). Intangible assets are amortized over ten years.

 

The Company decided to refocus its research and development on its next generation of HDR Intelligent Accessory platform instead of developing the new HDR+.  To achieve this it has contracted a Mechanical Designer and H/W and Embedded S/W Engineer to complete this task.  The project will require an additional 6 months and approximately $200,000 to productize into a device that can be sold to Government, or Enterprise customers.  The costs associated with the development of this new product are recorded in intangible assets in the accompanying consolidated balance sheet and are reflected as new product development above.

 

The amortization expense for the three months ended March 31, 2015 and 2014 were $8,255 and $6,254, respectively.

 

NOTE 4 – PROPERTY AND EQUIPMENT, NET

 

Property and equipment consisted of the following:

 

		March 31,				December 31,
		2015				2014
Computer equipment		$	35,820			$	35,820
Furniture and fixtures			54,016				54,016
			89,836				89,836
Less: accumulated depreciation			71,270				68,254
		$	18,566			$	21,582

 

Property and equipment consist of furniture and fixtures and computer equipment.  The furniture and computer equipment are being depreciated over a period of from three to five years.

 

Depreciation expense for the three months ended March 31, 2015 and 2014 were $3,016 and $5,370, respectively.

 

 

NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consist of the following:

 

		March 31,				December 31,
		2015				2014
Accounts payable		$	62,483			$	40,486
Payroll related liabilities			70,596				109,740
Loans			243,887				46,792
Other current liabilities			1,754				-
		$	381,720			$	197,018
Related party payables		$	90,650			$	60,200

 

The related party payable was owned to a company wholly owned by a major shareholder of the Company and owned to a service provider for services performed.

 

NOTE 6 – PROMISSORY NOTES – RELATED PARTY

 

Promissory notes – related party outstanding totaled $243,887 as of March 31, 2015:

 

		March 31,				December 31,
		2015				2014
Short-term borrowings from a company owned by one of the stockholders. The borrowings are due on demand and are non-interest bearing. In January 2015, the amounts have been paid in full.		$	-			$	1,625
Promissory note issued to a company owned by a stockholder of the Company in December 2014 bearing interest rate of 15% per annum. This promissory note is due on June 30, 2015.			46,792				46,792
Promissory note issued to a company owned by a stockholder of the Company in March 2015 bearing interest rate of 15% per annum. This promissory note is due on September 30, 2015.			10,095				-
Promissory note issued to a company owned by a stockholder of the Company in March 2015 bearing interest rate of 15% per annum. This promissory note is due on September 30, 2015.			15,000				-
Promissory note issued to a company owned by a stockholder of the Company in March 2015 bearing interest rate of 15% per annum. This promissory note is due on September 30, 2015.			32,000				-
Promissory note issued to a company owned by a stockholder of the Company in March 2015 bearing interest rate of 15% per annum. This promissory note is due on September 30, 2015.			10,000				-
Promissory note issued to a company owned by a stockholder of the Company in March 2015 bearing interest rate of 15% per annum. This promissory note is due on September 30, 2015.			130,000
		$	243,887			$	48,417

 

 

NOTE 9 – RESEARCH AND DEVELOPMENT

 

On April 1, 2013, the Company entered into an engineering contract for the hardware and software development of its next generation HDR device called the HDR+.  The device is to be used by government and enterprise customers to capture all forms of machine-readable data as well as the facial and fingerprint biometric information of persons. As of December 31, 2013, the Company had paid $44,000 in cash, which has been recorded as research and development expense.  Due to slippages in the development deliverables and lack of proper documentation being supplied the Company terminated this agreement on November 11, 2013.

 

The Company in 2014 has also started to utilize the services of a Kiosk manufacturer, Slabb Inc., for the production of its new Multi-modal Biometric Enrolment and Verification Kiosk.  No formal agreement is in place, beyond a standard Non-Disclosure Agreement and the Company can utilize these services on an as needed basis.

 

NOTE 10 – STOCKHOLDER’S EQUITY (DEFICIT)

 

The Company has 300,000,000 shares authorized and 164,300,789 issued and outstanding as of March 31, 2015.

 

On March 9, 2015, the Company issued a total of 762,500 common shares at $0.17 per shares for services provided to the company of which 387,500 common shares were issued for consulting services provided and 375,000 shares were issued for legal services provided.

 

On September 24, 2014, the Company issued a total of 2,915,000 common shares to Penn Investments, Inc. for the conversion of outstanding debt and interest.

 

NOTE 11 – COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

The Company leased its building under a six months term lease with an option to buy at the end of the term. During the lease term, the Company is required to make a monthly lease payment of $3,000 per month.

 

Legal Matters

 

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

 

NOTE 12 – SUBSEQUENT EVENTS

 

On April 6, 2015 (the "Closing Date"), the Company and all of the shareholders (the "Multipay Shareholders") of Multipay S.A., a Colombian corporation ("Multipay"), closed (the "Closing") on the Share Purchase Agreement entered into between the parties on March 6, 2015. As a result of the Closing, the Company acquired 100% of the issued and outstanding shares of Multipay (the "Multipay Shares") from the Multipay Shareholders on a fully diluted basis. In consideration for the Multipay Shares, the Company issued and sold to the Multipay Shareholders an aggregate of 7,600,000 shares of common stock of the Company. Within ten days of the Closing Date, the Company is required to issue 7,000,000 shares of common stock. Upon the Multipay Shareholders paying certain liabilities in the approximate amount of US $340,000, the Company is required to deliver the balance of 600,000 shares of common stock to the Multipay Shareholders. In the event the Multipay Shareholders do not pay the required amount by the 12-month anniversary of the Closing Date, the Company will not be required to deliver the remaining shares of common stock. On May 7, 2015, the Company and Multipay executed an amendment to the Share Purchase Agreement to 1) amend the number of shares to be issued within ten days of the Closing Date from 7,000,000 shares to 6,101,517 shares; and 2) to amend the balance of shares to be delivered from 600,000 shares to 1,498,483 shares, upon the payment of certain liabilities by the Multipay Shareholders. The 6,101,517 shares will be issued on May 18, 2015.

 

 

Multipay through the use of its own proprietary software platforms is engaged in providing an array of value added payment gateway services as well as complimentary mobile wallet applications and services to various customers in Colombia and Peru. The company was established in December of 2008 and has 14 full time employees based in Bogota, Colombia. In accordance with FASB ASC 805, the Company shall disclose pro-forma financial information, however, the Company has not yet completed its initial accounting for business combination due to different accounting standard was adopted by Mulitpay while at the same time acquisition audits of MultiPay’s financial statements for the years ended December 31, 2014 and 2013 have not been completed. The Company is not able to present pro-forma financial information at this point.

 

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

 

As of March 31, 2015, ID Global had not generated revenues in 2015 and had accumulated a net loss of $2,905,283 since inception. This is consistent with the prior period of March 31, 2014 in which no revenues were generated.

 

In August 2013 ID Global officially entered into a business combination with Innovation in Motion, Inc., a private company operating in two technology fields: the handheld identification market and mobile payment market. Innovation In Motion, Inc. brought a range of state-of-the-art products in these fields and has begun serious market penetration with the sale and placement of units.

 

The Company is developing biometric products and solutions for global Government, Enterprise, and Consumer markets.  The Company is planning to focus in two specific technology areas: biometric handheld identification and biometric mobile payment.  The Company’s objective is to focus on two distinct markets, one being the Government market requiring solutions for addressing its security and associated identity management needs and the other the Consumer Mobile Payment market which is looking to define non obtrusive but highly secure solutions used for credit and debit card payments that can incorporate biometric technologies.  To address these markets the Company has invested into patenting and developing both hardware and software platforms focused to address these specific market requirements.

 

Management believes that one of the advantages of the Company’s platform approach is that the platforms could be leveraged to support a wide variety of vertical markets in both the Government and Mobile Payment space and could be easily adapted to new markets requiring low cost and configurable solutions.  These vertical markets are as an example border control, public safety, enterprise security and asset management, seaports, small business inventory management, military and banking (identity verification).  There are no assurances, however, that management’s beliefs are correct.

 

The Company, however, has not completed development of a marketable product and needs to raise substantial additional capital to complete these efforts.

 

Going concern

 

We have not reported revenues during 2015 and have an accumulated deficit of approximately $2.9 million at March 31, 2015. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2014 and 2013 contained an explanatory paragraph regarding our ability to continue as a going concern based upon our net losses. These factors, among others, raised substantial doubt about our ability to continue as a going concern. Our consolidated financial statements appearing elsewhere in this report do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful in our efforts to report revenues or to continue as a going concern, in which event investors would lose their entire investment in our company.

 

 

THREE MONTHS ENDED MARCH 31, 2015 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2014

 

		Three months ended March
		2015				2014
Net Revenues		$	-			$	-
Cost of sales			-				-
Operating Expenses:
Depreciation and amortization			11,271				11,624
Research and development			24,000				2,474
General and administrative			472,836				98,176
Total operating expenses			508,107				112,274
Loss from operation			508,107				112,274
Total other expenses			1,755				9,550
Net loss		$	509,862			$	121,824

 

Three Month Periods Ended March 31, 2015 and 2014

 

Revenues

 

During the three month periods ended March 31, 2015 and 2014, no revenues were generated.

 

Expenses

 

Research and Development Expense. For the three months ended March 31, 2015, the Company incurred $24,000 in research and development for the Colombia Transit Kiosk Project which was a 100% increase from the three months ended March 31, 2014.

 

Depreciation and Amortization expense. For the three months ended March 31, 2015, depreciation and amortization expense remained relatively constant as compared to the three months ended March 31, 2014.

 

General and Administrative Expenses. For the three months ended March 31, 2015, general and administrative expenses were $472,836 as compared to $98,176 for the three months ended March 31, 2014, an increase of $374,660. This was primarily the result of an increase in payroll and professional fees. For the three months ended March 31, 2015 and 2014 general and administrative expenses consisted of the following:

 

		Three Months Ended				Three Months Ended
		31-Mar-15				31-Mar-14
Occupancy		$	9,000			$	9,000
Payroll and related			142,377				16,959
Professional fees			297,692				49,849
Internet/Phone			4,520				10,870
Travel/Entertainment			6,290				1,369
Marketing			-				4,748
Other			12,957				5,382
Total General and Administrative		$	472,836			$	98,177

 

 

	·	For the three months ended March 31, 2015, Occupancy expense remained flat.
	·	For the three months ended March 31, 2015, Payroll and Related expenses increased due to Company’s officers beginning to take salaries.
	·	For the three months ended March 31, 2015, Professional fee expense increased due to Legal and Consulting Fee expense that were incurred in 2014 due to the acquisition of MultiPay on March 6, 2015.

 

Liquidity and Capital Resources

 

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. At March 31, 2015 we had a working capital deficit of $458,842 as compared to a working capital surplus of $74,839 at December 31, 2014. As of March 31, 2015, we had total current assets of $13,528 and we had total current liabilities of $472,370.

 

On a cash basis operating activities used $307,700 and $150,384 in cash for the three months ended March 31, 2015 and 2014, respectively.

 

As of March 31, 2015 and the date of this report, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all. Our failure to obtain financing would have a material adverse effect on our business.

 

As of March 31, 2015 our Intangible Assets which consist of SRIO (Biometric wallet devices), HDR (Handheld biometric mobile devices) and software, continue to be viable. It has been confirmed during the preparation of the 10K that an impairment reserve is not required.

 

Off-Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is deemed by our management to be material to investors.

 

Recent Accounting Policies

 

The recent material accounting policies that may be the most critical to understanding of the financial results and conditions are discussed in Note 2 of the unaudited financial statements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Information not required to be filed by Smaller Reporting Companies.

 

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures.

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 ("Exchange Act"), the Company's management, under the supervision and with the participation of the Chief Executive Officer who also serves as our principal financial and accounting officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of March 31, 2015, the end of the period covered by this Quarterly Report on Form 10-Q.

 

Based upon that evaluation, the Chief Executive Officer who also serves as our principal financial and accounting officer concluded that, as of March 31, 2015, the disclosure controls and procedures were not effective as a result of continuing weaknesses in its internal control over financial reporting as identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Disclosure controls and procedures means controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including the principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting

 

There was no change in the Company's internal control over financial reporting that was identified in connection with such evaluation that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

 

 

PART II

 

ITEM 1. LEGAL PROCEEDINGS

 

There are no pending, threatened or actual legal proceedings in which the Company or any subsidiary is a party.

 

ITEM 1A. RISK FACTORS

 

Risk factors describing the major risks to our business can be found under Item 1A, “Risk Factors”, in our Annual Report on Form 10-K for the year ended December 31, 2014. There has been no material change in our risk factors from those previously discussed in the Annual Report on Form 10-K.

 

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

 

On March 9, 2015, the Company issued a total of 762,500 common shares at $0.17 per shares for services provided to the Company of which 387,500 common shares were issued for consulting services provided and 375,000 shares were issued for legal services provided.

 

OnApril 6, 2015 (the "Closing Date"), the Company and all of the shareholders (the "Multipay Shareholders") of Multipay S.A., a Colombian corporation ("Multipay"), closed (the "Closing") on the Share Purchase Agreement entered into between the parties on March 6, 2015. As a result of the Closing, the Company acquired 100% of the issued and outstanding shares of Multipay (the "Multipay Shares") from the Multipay Shareholders on a fully diluted basis. In consideration for the Multipay Shares, the Company issued and sold to the Multipay Shareholders an aggregate of 7,600,000 shares of common stock of the Company. Within ten days of the Closing Date, the Company is required to issue 7,000,000 shares of common stock. Upon the Multipay Shareholders paying certain liabilities in the approximate amount of US $340,000, the Company is required to deliver the balance of 600,000 shares of common stock to the Multipay Shareholders. In the event the Multipay Shareholders do not pay the required amount by the 12-month anniversary of the Closing Date, the Company will not be required to deliver the remaining shares of common stock. On May 7, 2015, the Company and Multipay executed an amendment to the Share Purchase Agreement to amend the 7,000,000 shares to be issued within ten days of the Closing Date to 6,101,517 shares and the 600,000 shares to be delivered upon Multipay Shareholders paid off the required amount to 1,498,483 shares. The 6,101,517 shares will be issued on May 18, 2015.

 

On May 13, 2015, the Company entered into a Securities Purchase Agreement with an accredited investor and Douglas Solomon, an executive officer and director of the Company, pursuant to which the accredited investor and Mr. Solomon invested $100,000 and $50,000, respectively, into the Company in consideration of a Secured Convertible Debenture and a common stock purchase warrant to acquire 2,727,273 and 1,363,636, respectively, shares of common stock exercisable for a period of five years at an exercise price of $0.055 subject to antidilution protection. The Secured Convertible Debentures bear interest of 10%, are payable on the earlier of the Company closing a financing in excess of $500,000 or September 15, 2015 and is convertible into shares of common stock at $0.055 per share subject to antidilution protection. In the event the Secured Convertible Debentures are not paid in full by the maturity date, then the Company shall be obligated to issues shares of common stock to the holder as liquidated damages in the amount equal to the principal and interest outstanding multiplied by .25 per month, which such product will be divided by the conversion price then in place. Such liquidated damages will be paid on a monthly basis until this debenture is paid in full. The Secured Convertible Debenture is secured by all assets of the Company.

 

All of the offers and sales of securities listed above were made to accredited investors, affiliates or executive officers of the Company, and the Company relied upon the exemptions contained in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated there under with regard to those sales. No advertising or general solicitation was employed in offering the securities. The offers and sales were made to a limited number of persons, each of whom was an accredited investor, or an executive officer of the Company, and transfer of the common stock issued was restricted by the Company in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above referenced persons, we have made independent determinations that each of the investors were accredited investors and that each investor was capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment. Furthermore, all of the above-referenced persons were provided with access to our Securities and Exchange Commission filings.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable to our operations.

 

ITEM 5. OTHER INFORMATION

 

See ITEM 1A above.

 

ITEM 6. EXHIBITS

 

ITEM 15.		EXHIBITS
2.1	(2)	Agreement and Plan of Reorganization
3.1	(1)	Certificate of Incorporation
3.2	(1)	By-laws
3.3	(7)	Certificate of Ownership and Merger
10.1	(3)	Assignment of Patents
10.2	(3)	Assignment of Patents
10.3	(3)	Assignment of Patents
10.4	(3)	Employment Agreement of David Jones
10.5	(3)	Employment Agreement of Douglas Solomon
10.6	(3)	Employment Agreement of Thomas Szoke
10.7	(3)	Promissory Note
10.8	(3)	Flextronics Manufacturing Services Agreement
10.9	(4)	Agreement with Tiber Creek Corporation
10.10	(4)	Adjusted Compensation Agreement David S. Jones through September 30, 2013
10.11	(4)	Adjusted Compensation Agreement David S. Jones from October 1, 2013
10.12	(5)	Agreement extending due date of $600,000 Penn Investments Note
10.13	(5)	Agreement extending due date of $310,000 Penn Investments Note
10.14	(5)	Promissory Note for $20,000 payable to Penn Investments
10.15	(5)	Promissory Note for $180,000 payable to Penn Investments
10.16	(6)	Note Conversion Agreement dated September 24, 2014 by and between ID Global Corporation and Penn Investments, Inc.
10.17	(8)	Promissory Note in the principal amount of $17,000 dated August 7, 2014 from Thomas Szoke
10.18	(8)	Promissory Note in the principal amount of $17,000 dated August 28, 2014 from Thomas Szoke
10.19	(9)	The ID Global Solutions Corporation Equity Compensation Plan
10.20	(10)	Real Estate Purchase Agreement dated December 12, 2014 by and between ID Global Solutions Corporation and Megan DeVault and Jeffrey DeLeon
10.21	(10)	Commercial Lease Agreement dated December 19, 2014 by and between ID Global Solutions Corporation and DeLeon-Costa Investments, LLC
10.22	(11)	Share Purchase Agreement by and between ID Global Solutions Corporation and the Multipay S.A. Shareholders
10.23*		Form of Securities Purchase Agreement entered on May 13, 2015
10.24*		Form of Security Agreement entered on May 13, 2015
10.25*		Form of Secured Convertible Debenture issued on May 13, 2015
10.26*		Form of Common Stock Purchase Warrnat issued on May 13, 2015
31.1*		Certification of Chief Executive and Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
32.1*		Certification of Chief Executive and Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

EX-101.INS	XBRL INSTANCE DOCUMENT
EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
EX-101.LAB	XBRL TAXONOMY EXTENSION LABELS LINKBASE
EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

 

 

* Filed herewith.

 

(1)         Previously filed on Form 10-12G on November 9, 2011 (File No.: 000-54545) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.

 

(2)         Previously filed on Form 8-K on August 13, 2013 (File No.: 000-54545) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.

 

(3)         Previously filed on Form S-1 on February 13, 2014 (File No.: 333-193924), as amended, as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.

 

(4)         Previously filed on Form S-1 on June 26, 2014 (File No.: 333-193924), as amended, as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference

 

(5)         Previously filed on Form S-1 on August 12, 2014 (File No.: 333-193924), as amended, as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference

 

(6)         Previously filed on Form 8-K on September 25, 2014 (File No.: 000-54545) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.

 

(7)         Previously filed on Form 8-K on October 9, 2014 (File No.: 000-54545) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.

 

(8)         Previously filed on Form 10-Q on November 14, 2014 (File No.: 000-54545) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.

 

(9)          Previously filed on Form 8-K on November 28, 2014 (File No.: 000-54545) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.

 

(10)         Previously filed on Form 8-K on December 22, 2014 (File No.: 000-54545) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.

 

(11)         Previously filed on Form 8-K on March 12, 2015 (File No.: 000-54545) and incorporated herein by this reference.

 

 

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.

 

	ID Global Solutions Corp.
	By: /s/ Thomas R. Szoke
	Thomas R. Szoke, Chief Executive Officer,
	Principal financial and accounting officer
Dated: May 15, 2015