ID Global Corporation and Subsidiary
Notes to Financial Statements
December 31, 2015
The consolidated financial statements include the accounts of ID Global Corporation (the “Company”), which was incorporated in Nevada on March 1, 2006, and its wholly owned subsidiary Fluid Solutions Group, Inc. ("Fluid"), which was incorporated in Nevada on July 26, 2013.
The Company seeks to invest in emerging and established private companies that would benefit from the advantages of a public company. The Company would act as a catalyst between these companies to raise and infuse capital when required and to offer its expertise in management, finance, social media, and eco-friendly products so that the current management of these companies can independently manage and operate their respective businesses.
Cash and cash equivalents.
For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.
Use of estimates.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include valuation of convertible notes payable and the valuation allowance of deferred tax assets.
Fair value of financial instruments and fair value measurements
The Company measures financial assets and liabilities in accordance with generally accepted accounting principles. For certain financial instruments the carrying amounts approximate fair value due to their short maturities.
The Company adopted accounting guidance for financial assets and liabilities. The adoption did not have a material impact on the results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Revenue from sales of products and services is recognized when persuasive evidence of an arrangement exists, products have been shipped or services have been delivered to the customer, the price is fixed or determinable and collection is reasonably assured.
The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees and earned. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50.
Fixed assets are recorded at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance are charged to expense as incurred. Expenditures for betterments and renewals are capitalized. The cost of fixed assets and the related accumulated depreciation are removed from the accounts upon retirement or disposal with any resulting gain or loss being recorded in operations.
Intangible assets with no determinable life are initially assessed for impairment upon purchase, with subsequent assessments required annually. When there is reason to suspect that their values have been diminished or impaired, a write-down is recognized as necessary. Intangible assets with rights that expire over time are amortized over the time period that the rights exist.
The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes.” Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.
The Company adopted “Accounting for Uncertainty in Income Taxes”. These standards provide detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a “more likely-than-not” recognition threshold. The Company had no unrecognized tax benefits. During the three months and year ended December 31, 2015 and 2014, no adjustments were recognized for uncertain tax benefits.
Net loss per share
The Company computes net earnings (loss) per share in accordance with ASC 260-10, “Earnings per Share.” ASC 260-10 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. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
Marketable Securities are adjusted to fair market value on the balance sheet date. The resulting difference between cost and market value is reflected as unrealized gain or (loss) on the Consolidated Statements of Operations.
The Company owns 1,000,000 shares of common stock in PYHH. This constitutes a Level I asset because there are quoted prices for the stock in an active market, and is therefore valued at $0.80 per share, the market price on the balance sheet date.
The Company owns 198,385 shares of Series B Convertible Preferred Stock in PHYH. Each share can be converted into 40 shares of common stock, a total of 7,935,400 common shares if they were all converted. This constitutes a Level III asset because there are no current quoted prices for the identical common stock in an active market, and is therefore valued at $0 per common share equivalent, the market price of the common stock on the balance sheet date. The Company owns 500,000 shares of common stock in Jack Rockwell, Inc. This constitutes a Level 3 asset because it is a startup private company in which there is no reliable way to determine the fair market value. The Company invested $5,000 during the three months ended December 31, 2015 and no fair value adjustments have been made.
1.)March 2015 termination of agreement and mutual release of World of Marijuana Project due to completion of Due Diligence.
2.) April 2015 termination agreement of Fluid Solutions Group, Inc.project Dolton, IL due to completion of Due Diligence.
3.) March 2015 took assignment ($0 Cost) of 71,433,289 common shares of ticker symbol SVMI delisted in 2015, but still active company.
4.) September 2015 termination of Cannaworx (GEAR) agreement due to completion of Due Diligence.
5.) December 2015 mutually terminated purchase agreement of 832,648 PYHH common shares from third-party due to completion of Due Diligence.
6.) December 2015 termination of Purchase Agreement of 50 million UTRM shares which reverse split into 50,000 POTN Shares due to undeliverable common stock certificate in good standing.
7.) TWDL - $1300 Market Value after 1 for 150 Reverse Split.
Quoted Prices in Active Markets for Identical Assets(Level1) Significant Other Observable Inputs (Level2) Significant Unobservable Inputs (Level3) Total
PYHH $ 800,000 $ 800,000
PHYH 794 794
Jack Rockwell, Inc. 125,000 125,000
MLH Investments 25,000 25,000
Star Stream Capital 25,000 25,000
Tekno creations 25,000 25,000
Bottled Water Media 25,000 25,000
TWDL 1,300 1,300
POTN 0 WOMO
Total $802,094 $0 $225,000 $1,027,094
The accompanying financial statements have been prepared on a going concern basis, which implies the Company will continue to realize it assets and discharge its liabilities in the normal course of business. As of December 31, 2015, the Company had accumulated deficits of $6,897,788. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the ability of the Company to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
There was no income tax expense for the three months and year ended December 31, 2015. Or December 31, 2014 due to the Company’s net losses. Both 2014 and 2015 Corporate tax returns have been filed.
NOTES PAYABLE AND DERIVATIVE LIABILITY
There are currently three convertible note agreements. The $90,000 note was due on September 1, 2009 and had a default interest rate of 36% per annum. On December 19, 2013, there was a settlement agreement adjusting the past due interest on this note such that the principle plus accrued interest is $260,566. The Company recorded a gain on interest settlement of $170,750 as a result of this settlement agreement. No further interest will accrue on this note. The $85,000 note was due on September 1, 2009 and has a default interest rate of 36% per annum. This note was renegotiated such that the default 36% interest rate stopped accruing on November 21, 2012. No further interest will accrue and the due date was extended indefinitely. For the third note, the investor purchased $100,000 worth of interest from the $85,000 note and formed a new note with the same terms except that interest accrues at 10% per annum. This note is due on September 1, 2014 and has subsequently been paid off. For all three notes, the lenders have the option to convert all principle and interest into the Company’s common stock at a conversion rate of $0.0001 per share. All three convertible notes were adjusted to fair market value on the balance sheet date based on the market price of the stock and conversion features. The change in value is reflected in the Consolidated Statements of Operations.
The Company holds 11 notes payable, each with an interest rate of 10% per annum. The notes have due dates ranging from April 26 to November 4, 2013 and are now in default.
In 2013, the Company executed and collected $75,000 on an $82,500 note payable from an investor with an interest rate of 12% per annum. The Company recorded a $7,500 interest adjustment on the Consolidated Statement of Operations to reflect the difference in the stated principle amount and the amount collected. The note was due on June 5, 2014.
On March 27, 2014, the Company executed a $25,000 note payable along with an agreement to pay the investor an additional $75,000 worth of the Company stock, which was exchanged for securities valued at $100,000 (Note4). The $25,000 note has an interest rate of 5% per annum. The first monthly payment of $2,187.50 was due on May 27, 2014 and the final payment is due on April 27, 2015. This whole transaction is currently being renegotiated in an effort to pay down or write-off company debt.
SIGNIFICANT EVENTS On April 17 2016 a Board Resolution was signed into effect, changing the designation of Series A Convertible Preferred Stock. Each Series A share can now be converted into 1 share of common stock, but still has voting rights equal to 100 votes per share.
About EZ4Media, Inc. - retains IDGC to assist in going public EZ4Media, Inc. (“EZ4”), a Nevada Corporation, headquartered in Plano, Texas acquired all the technology, work-product and Intellectual Property assets from Brightscale, Inc. and currently holds these assets in its wholly owned subsidiary Allsearch Semi LLC. EZ4 is a fabless semiconductor company specializes in the design and sale of semiconductor chips while outsourcing the fabrication or "fab" of the chips to a specialized manufacturer called a semiconductor foundry. The initial focus of EZ4Media, Inc. will be to enhance the value of their existing hardware and software design, including the EZ4Media, Inc. portfolio of Semiconductor Patents and Applications. The proprietary disruptive technology is a scalable, low power, high-performance, massively parallel computing architecture chip which is ideal to perform realtime image processing and stitching of multiple high-speed imager data streams that can be used in a vast array of applications including, but not limited to 3-D imaging and mapping in autonomous automobiles and high-security camera systems, such as border surveillance.
The Company is authorized to issue 7,500,000,000 shares of common stock and 100,000,000 shares of preferred stock as of the balance sheet date. 5,526,915,257 common shares and 80,000,000 preferred shares are issued and outstanding as of the balance sheet date. The preferred shares that were issued during the year ended December 31, 2015 have been designated as Series A Convertible Preferred Stock. Each Series A share can be converted into 1 share of common stock and has voting rights equal to 100 votes per share. They also have preferred liquidation rights equal to $0.001 per share before common shareholders. The Company also designated 10,000,000 preferred shares as Series B Convertible Preferred Stock. Each Series B share can be converted into 100 shares of common stock, but has no voting rights. They also have preferred liquidation rights equal to $1.00 per share before common shareholders. No Series B shares have been issued as of the balance sheet date.