authID Inc. - Quarter Report: 2015 September (Form 10-Q)

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 September 30, 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)

IIM GLOBAL CORPORATION

(Former Name of Registrant as Specified in its Charter)

160 E. Lake Brantley Drive

Longwood, Florida 32779

(Address of principal executive offices) (zip code)

407-674-2651

(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.

(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 ¨     No  x

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

TABLE OF CONTENTS

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:

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 IM Global Corporation and its subsidiaries..

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

FINANCIAL STATEMENTS

ID Global Solution Corporation and Subsidiaries

(FORMERLY:IIM GLOBAL CORP.)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

ID Global Solution Corporation and Subsidiaries

(FORMERLY:IIM GLOBAL CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

ID Global Solution Corporation and Subsidiaries

(FORMERLY:IIM GLOBAL CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

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

ID Global Solution Corporation and Subsidiaries

(FORMERLY:IIM GLOBAL CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

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

ID GLOBAL SOLUTIONS CORPORATION AND SUBSIDIARIES

(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 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. 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.

On April 6, 2015 (the "Closing Date"), ID Global 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.

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.

On August 13, 2015 (the "Closing Date"), ID Global and the shareholder (the "IDGS LATAM Shareholder") of IDGS LATAM S.A.S., a Colombian corporation ("LATAM"), closed (the "Closing") on the purchase entered into between the parties on August 13, 2015. As a result of the Closing, the Company acquired 100% of the issued and outstanding shares of LATAM (the "LATAM Shares") from the LATAM Shareholder on a fully diluted basis. In consideration for the LATAM Shares, the Company paid 32,683,963 Col Peso or $11,109 USD.

Going Concern

The Company has an accumulated deficit of $35,077,467 as of September 30, 2015; which has increased by $32,682,046 since December 31, 2014 primarily due to the booking of a derivative liability resulting from a capital raise of $1,290,000 in the form of a convertible debentures. Which was backed by stock at $0.03 per share and warrants at $0.05 per share. 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. The results of the three and nine month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year ending December 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 derivative liability equity instruments and share based payments.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries, MultiPay S.A. and IDGS LATAM S.A.S.. Inter-Company items and transactions have been eliminated in consolidation. The results of the three and nine month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year ending December 31, 2015

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.

Accounts Receivable and Revenue

Revenue is recognized on the sale of a product when the product is shipped, which is when the risk of loss transfers to our customers, the fee is fixed and determinable, and collection of the sale is reasonably assured. A product is not shipped without an order from the customer and the completion of credit acceptance procedures. Accounts receivable are reviewed periodically for collectability.

Property and Equipment, net

Property and equipment consisted of furniture and fixtures, kiosk stations 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.

Derivative financial instruments

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Other Assets

Other assets consist primarily of costs associated with the construction of HDR mobile biometric devises. As of September 30, 2015, the devices 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 September 30, 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 conversion of convertible debenture, exercise of stock options and exercise of stock 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 derivative liability are valued at FV a recurring basis at September 30, 2015 and December 31, 2014.

The Company adopted ASC 820-10 (formerly SFAS 157, Fair Value Measurements) on January 1, 2008. ASC 820-10 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

The Company used Level 2 inputs for its valuation methodology for the conversion option liability in determining the fair value using the Black-Scholes option-pricing model with the following assumption inputs:

For the nine months ending Septmber 30, 2015 the Company recognized a loss of $20,979,041 on the change in fair value of derivative liabilities.  For the nine months ending September 30, 2014 the Company had no derivative liabilities or change in fair valuation thereon.  As of September 30, 2015 the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with ASC 825-10. 

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.

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation.” FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. There were 40,400,000 options outstanding as of December 31, 2014.

The following is a summary of stock option activity:

The exercise price for options outstanding and exercisable at September 30, 2015 is as follows:

For options granted during 2015 where the exercise price was less than the stock price at the date of the grant, the weighted-average fair value of such options was $0.02 and the weighted-average exercise price of such options was $0.02.   For options granted during 2015 where the exercise price was less than the stock price at the date of the grant, the weighted-average fair value of such options was $0.53 and the weighted-average exercise price of such options was $0.39.   No options were granted during 2015 where the exercise price was equal to the stock price at the date of grant.

The fair value of the stock options is being amortized to stock option expense over the vesting period. The Company recorded stock option expense of $4,849,740 during the nine months ended September 30, 2015. At September 30, 2015, the unamortized stock option expense was $14,925,831 which will be amortized to expense through March 31, 2019.

The assumptions used in calculating the fair value of options granted using the Black-Scholes option- pricing model for options granted are as follows:

NOTE 3 – GOODWILL AND INTANGIBLE ASSETS, NET

Intangible assets consist of the following:

Intangible assets consist of legal and global patent registration costs related to the Company’s switch / transaction software and 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 patents and licenses are acquired upon the acquisition of Multipay S.A. (the “Subsidiary”). The Subsidiary holds patents and licenses in related to payment processing technologies.

In conjunction with the acquition of MultiPay we acquired a $19,436 goodwill. Upon acquisition of and IDGS LATAM, we recognized goodwill at $8,916 which derived from the excess of cash consideration over net asset acquired (See Note 8).

NOTE 4 – PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:

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

NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

NOTE 6 - NOTES PAYABLE TO RELATED PARTY

Promissory notes – related party outstanding totaled $150,000  as of September 30, 2015:

Upon acquisition of Multipay S.A. (the “Subsidiary”) the Company also assumed three promissory notes in the total of $151,902 payable to two Colombian Banks. Two of the notes totaling $6,415 will be paid off by November 30, 2015. The other note in the amount of $131,917 has 23 monthly payments remaining.

NOTE 7 – ACQUISITION OF MULTI-PAY

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. The Company has recorded contingent assets and related contingent liability from the acquisition because of the contingency of the shares to be issued and debt to be released upon the payment of certain liabilities by the Multipay Shareholders.

The purchase price was allocated to specific identifiable tangible and intangible assets at their fair value at the date of the purchase in accordance with Accounting Standards Codification 805, “Business Combinations”, as follows:

Allocation

The pro forma information below present statement of operations data from the acquisition of Multipay S.A. :

NOTE 8 – ACQUISITION OF IDGS LATAM SAS

On August 13, 2015 (the "Closing Date"), the Company and the shareholder (the "IDGS LATAM SAS Shareholder") of IDGS LATAM SAS, a Colombian corporation ("LATAM"), closed (the "Closing") on the Purchase Agreement entered into between the parties on August 13, 2015. As a result of the Closing, the Company acquired 100% of the issued and outstanding shares of LATAM (the "LATAM Shares") from the LATAM Shareholder on a fully diluted basis. In consideration for the LATAM Shares, the Company paid to the LATAM Shareholder $11,109.06 USD (32.683.963 COL Peso).

The purchase price was allocated to specific identifiable tangible assets at their fair value at the date of the purchase in accordance with Accounting Standards Codification 805, “Business Combinations”, as follows:

Allocation

The pro forma information below present statement of operations data from the acquisition of IDGS LATAM :

NOTE 9 – DERIVATIVE LIABILITY

In April 2008, the FASB issued a pronouncement that provides guidance on determining what types of instruments or embedded features in an instrument held by a reporting entity can be considered indexed to its own stock for the purpose of evaluating the first criteria of the scope exception in the pronouncement on accounting for derivatives. This pronouncement was effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of these requirements can affect the accounting for warrants and many convertible instruments with provisions that protect holders from a decline in the stock price (or “down-round” provisions). For example, warrants or conversion features with such provisions are no longer recorded in equity. Down-round provisions reduce the exercise price of a warrant or convertible instrument if a company either issues equity shares for a price that is lower than the exercise price of those instruments or issues new warrants or convertible instruments that have a lower exercise price.

As of September 30, 2015, the Company had outstanding convertible notes for $262,158 that contained beneficial conversion features and warrants of 23,670,909 that the Company determined were a derivative liability due to the “reset” clause associated with the note and warrant’s conversion price. The Company had valued the derivative liability of these notes at $26,514,647 as of September 30, 2015 using the Black-Scholes-Merton option pricing model.

The Company uses a weighted average Black-Scholes-Merton option pricing model with the following assumptions to measure the fair value of derivative liability at September 30, 2015:

The following table represents the Company’s derivative liability activity for the period ended September 30, 2015:

NOTE 10 – CONVERTIBLE DEBT

During the nine months ended September 30, 2015, the Company issued convertible debentures to investors in the aggregate principal amount of $2,212,095. The convertible debentures (i) are secured, (ii) bear interest at the rate of 10 - 12% per annum, and (iii) are due the earlier of one year from the date of issuance or upon the closing of a debt or equity financing in excess of $2,000,000. The convertible debentures are convertible at any time at the option of the investor into shares of the Company’s common stock that is determined by dividing the amount to be converted by $0.03 to $0.10. However, the certain convertible conversion prices ranging from $0.03 to $0.055 can be adjusted downward if certain conditions take place such as the Company issuing securities for a price less than the conversion price.

In connection with the issuance of these convertible debentures, the Company also issued to each investor an aggregate of 31,734,243 warrants to purchase shares of the Company common stock. The warrants have an exercise prices ranging from $0.05 to $0.15 per share and expire five years from the date of issuance. However, the exercise price of certain warrants can be adjusted downward if certain conditions take place such as the Company issuing securities for a price less than the exercise price.

Due to the potential adjustment in the conversion price associated with certain of these convertible debentures and the potential adjustment in the exercise price of certain of the warrants, the Company has determined that the conversion feature and warrants are considered derivative liabilities. The embedded conversion feature and the fair value of the warrants was initially calculated to be $3,078,221 and $2,457,385, respectively, which are recorded as a derivative liability as of the date of issuance. The derivative liability was first recorded as a debt discount up to the face amount of the convertible debentures with the remaining $4,538,040 being charged as a financing cost expense because of the excess of derivatives was more than the carrying value of the note. The Company recognized interest expense of $421,524 during the nine months ended September 30, 2015 related to the amortization of the debt discount. As of September 30, 2015, the convertible notes payable net of note discount is $262,158.

NOTE 11 – 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 12 – STOCKHOLDER’s DEFICIT

The Company has 500,000,000 shares authorized and 178,301,473 issued and outstanding as of September 30, 2015.

In the third quarter of 2015, the Company issued a total of 14,763,184 common shares at a weighted average of $0.39 per shares. There were 4,696,667 common shares issued in relation to the $1,290,000 capital raise and 420,000 shares for legal services provided to the company at fair value.

NOTE 13 – 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 14 – SUBSEQUENT EVENTS

On October 7, 2015, the convertible promissory note issued to a company owned by a stockholder of the Company has converted into 5,204,167 shares at a conversion price of $0.03 per share.  

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

As of September 30, 2015, ID Global in conjunction with MutliPay generated revenues of $84,627 in 2015 and had accumulated a net loss of $35,077,467 since inception.

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 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.

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.

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.

On April 6, 2015 (the "Closing Date"), ID Global 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.

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.

On August 13, 2015 (the "Closing Date"), ID Global and the shareholder (the "IDGS LATAM Shareholder") of IDGS LATAM S.A.S., a Colombian corporation ("LATAM"), closed (the "Closing") on the purchase entered into between the parties on August 13, 2015. As a result of the Closing, the Company acquired 100% of the issued and outstanding shares of LATAM (the "LATAM Shares") from the LATAM Shareholder on a fully diluted basis. In consideration for the LATAM Shares, the Company paid 32,683,963 Col Peso or $11,109 USD.

Going concern

We have not reported revenues in ID Global during 2015 and have an accumulated deficit of approximately $35 million at September 30, 2015. MultiPay has reported revenues in the amount of $84,627 in 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 AND NINE MONTHS ENDED SEPTEMBER 30, 2015 COMPARED TO THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2014

Three and Nine Month Periods Ended September 30, 2015 and 2014

Revenues, net

During the three and nine month periods ended September 30, 2015 and 2014, no revenues were generated by ID Global, however MultiPay has generated $84,627 since April 6, 2015, the acquisition date and on a YTD basis has generated $95,673.

Expenses

Research and Development Expense. For the nine months ended September 30, 2015, the Company incurred $24,853 in research and development primarily for the Colombia Transit Kiosk Project which was a 100% increase from the nine months ended September 30, 2014. For the three month period ended September 30, 2015 no R&D expenses were incurred.

Depreciation and Amortization expense. For the nine months ended September 30, 2015, depreciation and amortization expense remained relatively constant as compared to the nine months ended September 30, 2014.

The primary expense drivers are related to the capital raised and the stock options granted to employees. The booking of the Derivative Liability and related expenses was $25.8 million. The project cost to the company in stock options is $4.9 million, combined to total $30.8 million reflected above.

Professional fees consist primarily of $286 in Finders fees and $203 in Consulting fees related to the capital raises in conjunction with $377 in Legal Fees and $110 in Accounting fees.

For the nine months ended September 30, 2015, Payroll and Related expenses increased due to Company’s officers beginning to take salaries, the hire of a Chief Financial Officer, VP of Sales & Marketing and the VP of South American Operations.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. As of September 30, 2015, we had total current assets of $1,211,341 and we had total current liabilities of $28,129,087.

On a cash basis operating activities used $1,700,208 and $262,472 in cash for the nine months ended September 30, 2015 and 2014, respectively. The increase in cash in the six months period ended September 30, 2015 is majorly resulted from the proceeds from the convertible note payable and related party note payable.

We had $2,284,892 cash provided by financing activities of which, $2,040,000 was raised from issuance of convertible debenture during the nine month period ended September 30, 2015..

As of September 30, 2015 and the date of this report, we expect expenditures related to development in subsidiary acquired during the quarter ended September 30, 2015. Current cash position may not sufficient to support our development. 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.

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.

As a smaller reporting company, we are not required to include disclosure under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Pursuant to Rules 13a-15(b) and 15-d-15(b) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. The term “disclosure controls and procedures”, as defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon the evaluation of the disclosure controls and procedures at the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as a result of continuing weaknesses in its internal control over financial reporting initially identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 which are as follows:

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2015 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

We are currently not a party to any material legal or administrative proceedings and are not aware of any pending or threatened material legal or administrative proceedings arising in the ordinary course of business. We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business.

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, except as follows:

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

On September 25, 2015 through October 7, 2015, the Company entered into and closed Securities Purchase Agreements with several accredited investors (the "2015 Accredited Investors") pursuant to which the 2015 Accredited Investors invested $1,125,000 (the "Offering") into the Company in consideration of Secured Promissory Notes (the "Notes") and common stock purchase warrants (the "Warrants") to acquire an aggregate of 7,500,000 shares of common stock. The Warrants are exercisable for a period of five years at an exercise price of $0.15. The Notes bear interest of 12% and are payable one year from the date of issuance. The Notes are secured by 100% of the Company’s interest in ID Global LATAM S.A.S., a wholly-owned Colombian subsidiary of the Company. Prior to the maturity dates of the Notes, the 2015 Accredited Investors may elect to convert the interest accrued on the Notes into shares of common stock of the Company at a conversion rate of $0.10 per share

On September 4, 2015, the Company entered into a Securities Purchase Agreement with Ricky Solomon, a director of the Company, pursuant to which Mr. Solomon invested $100,000 into the Company in consideration of a Secured Promissory Note (the "Solomon Note") and a common stock purchase warrant to acquire an aggregate of 250,000 shares of common stock exercisable for a period of five years at an exercise price of $0.40. The Solomon Note bears interest of 10%, is payable on the earlier of the Company closing a financing in excess of $1,000,000 or on September 19, 2015. The Solomon Note contains standard default terms and is secured by all assets of the Company. In the event the Company defaults under the Note, the Company is required to issue Mr. Solomon an additional common stock purchase warrant to acquire 666,667 shares of common stock at $0.15 per share.

From June 25, 2015 through June 30, 2015, the Company entered into and closed Securities Purchase Agreements with several accredited investors pursuant to which the accredited investors invested $700,000 (the "First Closing") into the Company in consideration of Secured Convertible Debentures and common stock purchase warrants to acquire an aggregate of 15,400,000 shares of common stock. On July 29, 2015, the Company entered into and closed Securities Purchase Agreements with several accredited investors pursuant to which the accredited investors invested $190,000 (the "Second Closing” and together with the First Closing, the “Offering") into the Company in consideration of Secured Convertible Debentures and common stock purchase warrants to acquire an aggregate of 4,180,000 shares of common stock. The warrants are exercisable for a period of five years at an exercise price of $0.05 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 $2,000,000 or one year from the date of issuance. The Secured Convertible Debentures are convertible into shares of common stock at $0.03 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 make a monthly cash payment to the holder as liquidated damages in the amount equal to 2% of the principal and interest outstanding. The Company at its sole option may pay such liquidated damages in shares of common stock of the Company equal to the amount payable divided by the weighted average market price for the five days prior to the payment. 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. Each of the accredited investors have individually agreed to restrict their ability to convert the Secured Convertible Debentures or exercise their Common Stock Purchase Warrants and receive shares of common stock such that the number of shares of common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock.

The above offers and sales of the securities were made to accredited investors 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 regards to the sales. No advertising or general solicitation was employed in offerings the securities. The offers and sales were made to accredited investors and transfer of the securities was restricted by the Company in accordance with the requirements of the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable to our operations.

ITEM 5. OTHER INFORMATION

See ITEM 1A above.

ITEM 6. EXHIBITS

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.