S-1/A 1 forms-1a1.htm IFAN S-1/A1 10/09/15

 

As filed with the Securities and Exchange Commission, October  __, 2015


Registration No. 333-205679


UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM S-1/A

Amendment No. 1


REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


 

IFAN FINANCIAL, INC.

 (Exact name of registrant as specified in its charter)


Nevada

 

2390

 

33-1222494

(State or Other Jurisdiction of Incorporation or Organization)

 

(Primary Standard Industrial Classification Code Number)

 

(IRS Employer Identification No.)


Mr. J. Christopher Mizer

Chief Executive Officer

3517 Camino Del Rio South, Suite 407,

San Diego, CA 92108 (619) 537-9998

(Address and telephone number of registrant’s principal offices)



Copies to:

Law Office of Andrew Coldicutt

1220 Rosecrans St., PMB 258

San Diego, CA 92106

Info@ColdicuttLaw.com

 

Approximate date of commencement of proposed sale to the public: As soon as practical after the Registration Statement becomes effective.

 

If any securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: [X]

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [   ]


If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [   ]


If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.  [   ]

 



CALCULATION OF REGISTRATION FEE


Title of each class of securities to be registered

 

 

 

 

 

 

 

 

 

 

 

 

 







 

 

Amount to be registered

 

Proposed offering price per share(2)

 

Proposed maximum aggregate offering price(4)

 

Amount of registration fee(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock (1)

 

 

10,000,000 (1)

 

 

$0.08

 

 

$800,000

 

 

$92.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

 

10,000,000

 

 

 

 

 

$800,000

 

 

$92.96

 

 

(1)

Represents Common Shares offered by the Selling Stockholder. Includes an indeterminable number of additional Common Shares, pursuant to Rule 416 under the Securities Act that may be issued to prevent dilution from stock splits, stock dividends or similar transaction that could affect the Common Shares to be offered by Selling Stockholder.


In the event of stock splits, stock dividends, or similar transactions involving the common stock, the number of common shares registered shall, unless otherwise expressly provided, automatically be deemed to cover the additional securities to be offered or issued pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). In the event that adjustment provisions of the Equity Line of Credit Agreement require the registrant to issue more shares than are being registered in this registration statement, for reasons other than those stated in Rule 416 of the Securities Act of 1933, as amended, the registrant will file a new registration statement to register those additional shares.

(2)

The proposed maximum offering price per share and the proposed maximum aggregate offering price have been estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(c) under the Securities Act of 1933, as amended, on the basis of the average of the high and low prices of the common stock on the OTC Markets on October 9, 2015 , a date within five (5) trading days prior to the date of the filing of this registration statement.

(3)

Registration Fee has been paid via Fedwire.

(4)

Estimated Solely for the purpose of calculating the registration fee pursuant to Rule 457.



Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.


Our financial statements have been examined by Kyle L. Tingle, CPA, and have been prepared in accordance with generally accepted accounting principles and pursuant to Regulation S-X as promulgated by the SEC and are included herein.


The information in this Prospectus is not complete and may be changed. The Selling Stockholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.



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PART I – INFORMATION REQUIRED IN PROSPECTUS

 

The information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where an offer or sale is not permitted.


PRELIMINARY PROSPECTUS    Subject to Completion dated October __, 2015



IFAN FINANCIAL, INC.

Up To 10,000,000 Shares of Common Stock Offered By Selling Stockholder


The name of our company is IFAN Financial, Inc., and we were incorporated in the State of Nevada on June 11, 2010.


This prospectus relates to the offering and resale of up to 10,000,000 shares of our Common Stock, par value $.001 per share. The Company is registering 10,000,000 shares of common stock, par value $0.001, of IFAN Financial, Inc.(referred to herein as the “Company” “Issuer” “Registrant” or “IFAN”), by SBI Investments, L.L.C. (“SBII”) or any of SBII’s pledgees, assignees or successors-in-interest (each a “Selling Stockholder”) and represents shares that SBII has agreed to purchase if put to it by us pursuant to the terms of the Equity Line of Credit Agreement we entered into with SBII on May 28, 2015. Subject to the terms and conditions of the 2015 Equity Line, we have the right to "Draw Down," or sell, up to $2,000,000 worth of shares of our common stock to SBII. This arrangement is sometimes referred to as "2015 Equity Line."


For more information on the selling stockholder, please see the section of this prospectus entitled "Selling Stockholder" beginning on page 29. We will not receive any proceeds from the resale of these shares of common stock offered by SBII. We will, however, receive proceeds from the sale of shares directly to SBII pursuant to the 2015 Equity Line. When we put a Draw Down Notice for an amount of shares to SBII, the per share purchase price that SBII will pay to us in respect of such Draw Down Notice will be determined in accordance with a formula set forth in the 2015 Equity Line Agreement. There will be no underwriter's discounts or commissions so we will receive all of the proceeds of our sale to SBII. The purchase price to be paid by SBII will be equal to 80% of the average of the 3 lowest VWAP of the Common Stock during a respective Draw Down Pricing Period, or (ii) 85 % of the price of the Common Stock on the last Trading Day of the respective Draw Down Pricing Period.  We will be entitled to deliver a Draw Down request to SBII on each Draw Down Notice equal to the lesser of (i) $25,000, or (ii) 200% of the average of the dollar volume on the principal trading exchange for our common stock for the 10 trailing trading days preceding the Draw Down Notice Period; provided that the number of shares to be purchased by SBII shall not exceed the number of such shares that, when added to the number of shares of our common stock then beneficially owned by SBII, would exceed 4.99% of the number of shares of our common stock outstanding. SBII may sell any shares offered under this prospectus at prevailing market prices or privately negotiated prices.


SBII is an "underwriter" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), in connection with the resale of our common stock under the 2015 Equity Line. For more information, please see the section of this prospectus titled "Plan of Distribution" beginning on page 30. Our common stock became eligible for trading on the OTC Bulletin Board on October 30, 2013. Our common stock is quoted on the OTC Markets under the symbol "IFAN". The closing price of our stock on October 9, 2015 was $0.075 . You should understand the risks associated with investing in our common stock. Before making an investment, read the "Risk Factors," which begin on page 12 of this prospectus.


We are an “emerging growth company” under the federal securities laws and will therefore be subject to reduced public company reporting requirements. Investment in the common stock offered by this prospectus involves a high degree of risk. You may lose your entire investment. Consider carefully the “risk factors” beginning on page 9 of this prospectus before investing.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.


The date of this Prospectus is ___________, 2015



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You should rely only on the information contained in this Prospectus and in any Prospectus Supplement we may file after the date of this Prospectus. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The Selling Stockholder will not make an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. The information contained in this Prospectus is accurate only as of the date of this Prospectus, regardless of the time of delivery of this Prospectus or of any sale of our securities.


TABLE OF CONTENTS

PAGE

PART I – INFORMATION REQUIRED IN PROSPECTUS

1

ITEM 3.  PROSPECTUS SUMMARY

3

THE OFFERING

6

SUMMARY FINANCIAL DATA

9

RISK FACTORS

10

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

23

ITEM 4.  USE OF PROCEEDS

24

ITEM 5.  DETERMINATION OF OFFERING PRICE

25

ITEM 6.  DILUTION

27

ITEM 7.  SELLING STOCKHOLDER

27

ITEM 8.  PLAN OF DISTRIBUTION

28

ITEM 9.  DESCRIPTION OF SECURITIES TO BE REGISTERED

31

ITEM 10.  INTERESTS OF NAMED EXPERTS AND COUNSEL

34

ITEM 11.  INFORMATION WITH RESPECT TO THE REGISTRANT

34

A.  DESCRIPTION OF THE BUSINESS

34

B.  DESCRIPTION OF PROPERTY

53

C.  LEGAL PROCEEDINGS

53

D.  MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

53

E.  FINANCIAL STATEMENTS

54

F.  SELECTED FINANCIAL DATA

54

G.  SUPPLEMENTARY FINANCIAL INFORMATION

55

H.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

55

I.  CHANGES IN, AND DISAGREEMENTS WITH, ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

60

J.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

61

K.  DIRECTORS, EXECUTIVE MANAGEMENT, PROMOTERS AND CONTROL PERSONS

61

L.  EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE

62

M.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

64

N.  TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

65

 

 

PART II – INFORMATION NOT REQUIRED IN PROSPECTUS

II-1

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

II-1

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

II-1

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES

II-1

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

II-2

ITEM 17.  UNDERTAKINGS

II-3

SIGNATURES

II-5


 



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ITEM 3. PROSPECTUS SUMMARY

 

IFAN FINANCIAL, INC.

(A Development Stage Company)


This summary contains material information about us and the offering which is described in detail elsewhere in the Prospectus. Since it may not include all of the information you may consider important or relevant to your investment decision, you should read the entire Prospectus carefully, including the more detailed information regarding our company, the risks of purchasing our Common Stock discussed under “Risk Factors” on page 9, and our financial statements and the accompanying notes.

 

Unless the context otherwise requires, the terms “we,” “our,” “us,” the “Company” and “IFAN” refer to IFAN Financial, Inc., a Nevada corporation.

 

Company Overview


The Offering


Common Stock 10,000,000 shares that may be offered by the Selling Stockholder.


Shares Outstanding


Common Stock 84,486,774 shares outstanding as of the date of this prospectus.


Total proceeds


We will not receive any proceeds from the resale or other disposition of the shares covered by this prospectus by the Selling Stockholder. We will receive proceeds from our sale of shares to SBII. SBII has committed to purchase up to $2,000,000 worth of shares of our common stock over a period of time terminating on the earlier of: (i) 18 months from the effective date of the Equity Line of Credit Agreement (the “2015 Equity Line”); or (ii) the date on which SBII has purchased shares of our common stock pursuant to the 2015 Equity Line for an aggregate maximum purchase price of $2,000,000.  The purchase price to be paid by SBII will be equal to 80% of the Market Price of the common stock as determined under the 2015 Equity Line. We will be entitled to put a Draw Down Notice to SBII on each Draw Down that equals the lesser of (i) $25,000, or (ii) 200% of the average of the dollar volume based on the trailing 10 Trading Days preceding the first day of the Draw Down Notice that constitutes the Draw Down Pricing Period; provided that the number of shares to be purchased by SBII shall not exceed the number of such shares that, when added to the number of shares of our common stock then beneficially owned by SBII, would exceed 4.99% of the number of shares of our common stock outstanding.


Our Business

 

We were incorporated under the laws of the State of Nevada on June 11, 2010.

 

Our general business strategy is to become a leader in the ever-growing field of mobile payments, IFAN Financial has a unique opportunity to enhance the lives of consumers with a revolutionary mobile wallet platform, save merchants money with business-to-business (b2b) ‘white label’ online and mobile payment enabling solutions, and get small to mid-sized businesses accepting payments in a cost effective manner with HTML code checkout buttons for their new or existing sites.


Our mobile wallet platform will allow consumers to load funds into the platform for local peer-to-peer cash transfers, long distance remittances, complete secure online transactions, as well as buy and sell peer and merchant listed items within the platform. IFAN’s b2b ‘white label’ solutions will come fully developed and completely customizable allowing for mid to large sized merchants to integrate mobile payments into their businesses. The IFAN HTML hosted checkout buttons will be available for customization on ifanfinancial.com and will allow for merchants to add a checkout experience and begin accepting payments from their customers.



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We currently do have provisional patents on our mobile payment products and services and related products. Please refer to “Description of Our Business.” We have no revenues, have sustained losses since inception, have been issued a going concern opinion by our auditors and rely upon the sale of our securities to fund operations. We may not generate revenues even if any of our mobile payment technology is developed into full scale production. Accordingly, we will be dependent on future financings in order to maintain our operations and continue our research and development. Please refer to “Risk Factors.”


The Company qualifies as an “emerging growth company” as defined in the Jumpstart our Business Startups Act (the “JOBS Act”).


The Company’s fiscal year end is August 31st.


Where You Can Find Us


Our principal executive office is located at 3517 Camino Del Rio South, Suite 407, San Diego, CA 92108 .  The telephone number at our principal executive office is (619) 537-9998.  


Our History


The Company was incorporated on June 11, 2010, under the laws of the State of Nevada.  The Company is currently a development stage company and, since its formation, it has not realized any revenues from operations. The Company originally intended to develop and distribute an organic clothing line designed for children. All our clothing would be made of only natural materials. The Company now intends to commence operations in the electronic transfer of funds using mobile applications.


Since inception we have worked toward the introduction and development of our website.  We have no revenues, have achieved losses since inception, have been issued a going concern opinion by our auditors and rely upon the sale of our securities to fund operations. 


On April 25, 2014, J. Christopher Mizer (“Mr. Mizer”) acquired control of Seven Million One Hundred Twenty Two Thousand Thirty (7,122,030) shares of common stock of the Company, representing approximately 97.1% of the Company’s total issued and outstanding common stock, from Danielle Joan Borrie (“Ms. Borrie”) in accordance with a Stock Purchase Agreement between Ms. Borrie and Mr. Mizer.


On April 28, 2014, Danielle Joan Borrie resigned as the Company’s Board of Directors and as the Company’s President, Chief Executive Officer, Chief Financial Officer, and Treasurer.


On April 28, 2014, Nopporn Sadmai resigned as the Company’s Secretary.


On April 28, 2014, J. Christopher Mizer was appointed as a member of the Company’s Board of Directors and as the Company’s President, Chief Executive Officer.


On April 28, 2014, Steve Scholl was appointed as a member of the Company’s Board of Directors and as the Company’s Chief Financial Officer, Treasurer, and Secretary.


On May 8, 2014, the Board of Directors of the Company, with the approval of a majority of its shareholders by written consent, approved the issuance of 600,000 shares of Series A Preferred Stock (as defined and described under Item 3.2) (the “Series A Preferred Stock”) to J. Christopher Mizer, and 300,000 shares of Series A Preferred Stock to Steve Scholl (“Preferred Shareholders”) in exchange for J. Christopher Mizer’s cancellation of 6,764,887 shares, representing the ownership of approximately 92.2%, of the Company’s Common Stock.  J. Christopher Mizer, retained an ownership of 357,143 shares of common stock in the Company after this cancellation.


On May 8, 2014, the Board of Directors, with the approval of a majority vote of its shareholders approved the filing of a Certificate of Designation establishing the designations, preferences, limitations and relative rights of the Company’s Series A Preferred Stock (the “Designation” and the “Series A Preferred Stock”).  The Board of Directors authorized the issuance of 900,000 shares of Series A Preferred Stock, which the Board agreed to issue to



4



the Preferred Shareholders or its assigns, upon the Company filing the Certificate of Designation with the Nevada Secretary of State. The terms of the Certificate of Designation of the Series A Preferred Stock, which was filed with the State of Nevada on May 8, 2014, include the right to vote in aggregate, on all shareholder matters equal to 700 votes per share of Series A Preferred Stock and each Series A Preferred Stock share is convertible into shares of our common stock at a conversion rate of 700 shares of common stock for each one (1) share of Series A Preferred Stock.


On May 8, 2014, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase its authorized capital to Eight Hundred Ten million shares (810,000,000) of which Eight Hundred Million (800,000,000) shall be shares of Common Stock, par value $0.001 per share, and ten million (10,000,000) shall be shares of Preferred Stock, par value $0.001 per share with one million (1,000,000) of such shares being designated as Series A Preferred Stock. The Increase in Authorized was effective with the Nevada Secretary of State on May 8, 2014, when the Certificate of Amendment was filed. The Increase in Authorized was approved by the Board of Directors and the shareholders holding a majority of the total issued and outstanding shares of common stock on May 8, 2014.


On August 4, 2014, the Directors of the Company, receiving the majority vote of the Company’s Shareholders, approved: (i) a change in the Company name from “Infantly Available, Inc.” to “IFAN Financial, Inc.” and (ii) an 140-for-1 forward stock split of the issued and outstanding shares of common stock of the Company, which shall be payable as a dividend and upon surrender.  On August 5, 2014, the Company filed a Certificate of Amendment with the Secretary of State of Nevada, giving effect to the name change, among other things.


Effective September 3, 2014, in accordance with approval from the Financial Industry Regulatory Authority (“FINRA”), our company changed its name from Infantly Available, Inc. to IFAN Financial, Inc.


On June 6, 2014, the Company signed the share exchange agreement (“Agreement”) with Mobicash America, Inc. D/B/A Quidme, a company incorporated under the laws of the State of California (“Quidme”), and the shareholders of Quidme (the “Selling Stockholders”) pursuant to a share exchange agreement by and among the Company, Quidme and the Selling Stockholders. The Company will acquire 100% of the issued and outstanding securities of Quidme in exchange for the issuance of 43,000,000 shares of IFAN common stock, par value $0.001 per share. The Company will also fund $500,000 over the next six months, to support the continued development and commercialization of Quidme’s technology.  As a result of the Agreement the Selling Stockholders will acquire up to 35% of the Company’s currently issued and outstanding shares of common stock.  Upon completion of the Agreement, Quidme will become the wholly-owned subsidiary and the Company acquired the business and operations of Quidme.  Further, on the closing date of the Agreement, Christopher Menya, shall also be appointed the Chief Technology Officer and as a Director of IFAN and as President of the Quidme operating Subsidiary, and John C. De Puy will be appointed as a Director of Quidme. The Agreement is to be completed contingent on the successful financial audit of Mobicash America, Inc.


On October 3, 2014, we received the audited financials of Mobicash, America, Inc., and we closed the share exchange by acquiring Mobicash America, Inc. and through an amended Share Exchange Agreement (the “Amended Agreement”) we issued the 61,858 shares of Series A preferred stock to the shareholders of Mobicash America, Inc., d/b/a Quidme.  


On April 3, 2014, Christopher Menya resigned as the Company’s Chief Technical Officer and as a Director.


On April 8, 2015, John De Puy was appointed as a member of the Company’s Board of Directors.


We are an Emerging Growth Company as defined in the Jumpstart Our Business Startups (JOBS) Act.


As a result of the closing of the share exchange agreement with Mobicash America, Inc., Mobicash America, Inc., has become our wholly owned subsidiary and we now carry on the business of developing, producing, marketing and selling mobile electronic payment systems.  Our company is in the development stage and has generated no revenues.





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The Equity Line of Credit Agreement


On May 28, 2015, The Company and SBII entered into an Eighteen Month (18) Equity Line of Credit Agreement (the "2015 Equity Line of Credit"). The Company pledged 11,000,000 restricted Common Shares to an affiliate of SBII in satisfaction of a $550,000 commitment fee due under the 2015 Equity Line of Credit. Unless earlier terminated in accordance with its terms, the 2015 Equity Line of Credit shall terminate automatically on the earlier of (i) the first day of the month next following the 18-month anniversary of the “Effective Date” (as hereinafter defined), or (ii) the date on which SBII shall have made payment of Advances pursuant to the 2015 Equity Line of Credit in the aggregate amount of $2,000,000.


Pursuant to the terms of the 2015 Equity Line of Credit, The Company may in its sole discretion, and upon giving written notice to SBII (an “Advance Notice”), periodically sell Common Shares to SBII (“Shares”) at a per Share price (“Purchase Price”) equal to 80% of the average of the 3 lowest daily volume weighted average price (the “VWAP”) of the Common Stock during a respective Draw Down Pricing Period, or (ii) 85 % of the price of the Common Stock on the last Trading Day of the respective Draw Down Pricing Period for a Common Share as quoted by Bloomberg, L.P. (as such term is defined in the 2015 Equity Line of Credit) following the delivery by the Company of a Draw Down Notice, (the “Draw Down Pricing Period”).


The Company is not obligated to sell any Shares to SBII but may, over the term of the 2015 Equity Line of Credit and in its sole discretion, sell to SBII that number of Shares valued at the Purchase Price from time to time in effect that equals up to two million dollars ($2,000,000) in the aggregate. SBII is obligated under the 2015 Equity Line of Credit to purchase such Shares from The Company subject to certain conditions including: (i) The Company filing a registration statement with the SEC to register the resale by SBII of the Shares sold to SBII under the 2015 Equity Line of Credit (“Registration Statement”), (ii) the SEC declaring such Registration Statement effective (the date of such declaration by the SEC being the “Effective Date”), (iii) periodic sales of Shares to SBII must be separated by a time period of at least two Trading Days (“Trading Cushion”), and (iv) the dollar value of any individual periodic sale of Shares designated by the Company in any Draw Down Notice may not exceed the lesser of (a) $25,000, or (b) 200% of the average Daily volume based on the trailing 10 Trading Days preceding the first day of the Draw Down Notice Period. Daily volume is the product obtained by multiplying the number representing the daily trading volume of Common Shares for such Trading Day by the VWAP for a Common Share on such Trading Day.


The Company qualifies as an “emerging growth company” as defined in the Jumpstart our Business Startups Act (the “JOBS Act”). We intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.  As well, our election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until they apply to private companies.  Therefore, as a result of our election, our financial statements may not be comparable to companies that comply with public company effective dates.


THE OFFERING


Terms Of The Offering


As of the date of this prospectus, The Company has 84,486,774 shares of Common Stock issued and outstanding. There is no arrangement to address the possible effect of the Offering on the price of the stock.


In connection with the Company’s selling efforts in the Offering, Mr. J. Christopher Mizer and Mr. Steve Scholl will not register as a broker-dealer pursuant to Section 15 of the Exchange Act, but rather will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an Offering of the issuer’s securities. Mr. J. Christopher Mizer and Mr. Steve Scholl are not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Mr. J. Christopher Mizer, and Mr. Steve Scholl will not be



6



compensated in connection with their participation in the Offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in the securities. Mr. J. Christopher Mizer and Mr. Steve Scholl are not, nor have they been within the past 12 months, a broker or dealer, and they have not, nor have they been within the past 12 months, an associated person of a broker or dealer. At the end of the Offering, Mr. J. Christopher Mizer and Mr. Steve Scholl will continue to primarily perform substantial duties for the Company or on its behalf otherwise than in connection with transactions in securities. Mr. J. Christopher Mizer and Mr. Steve Scholl have not participated in another offering of securities pursuant to the Exchange Act Rule 3a4-1 in the past twelve months. Additionally, they have not and will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on the Exchange Act Rule 3a4-1(a)(4)(i) or (iii).  


In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for sale; an exemption from such registration or if qualification requirement is available and with which the Company has complied. In addition, and without limiting the foregoing, the Company will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during the period of time when this Registration Statement is effective.


There is no guarantee the Company will be able to sell the shares being offered in this prospectus. If it is unable to sell enough shares to complete its plan of operations, the business could fail.


Following is a brief summary of this offering.  Please see the “Plan of Distribution” section for a more detailed description of the terms of the offering.


Securities Being Offered by the Selling Stockholder:

Up to 10,000,000 shares of common stock, par value $0.001, being registered on behalf of SBII (maximum offering)

Offering Period:

Until all shares are sold by SBII or until 18 months from the date that the registration statement becomes effective, whichever comes first.

Risk Factors:

The Securities offered hereby involve a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors.”

Use of Proceeds:

We will not receive any proceeds from the sale of the common stock by SBII. However, we will receive proceeds from the sale of our common stock under the Equity Line of Credit Agreement. The proceeds will be used for working capital, asset acquisition, and general corporate purposes. See “Use of Proceeds.”

Number of Shares Outstanding Before the Offering

84,486,774

Number of Shares Outstanding    After the Offering:

Up to 94,486,774, if all the shares are sold.

Registration Costs:

Management estimates the total offering registration costs to be $35,000.



The Company’s officers, directors and control persons do not intend to purchase any shares in this offering.


This offering relates to the resale of up to  10,000,000 shares of our common stock by SBII.


There are substantial risks to investors as a result of the issuance of shares of our common stock under the 2015 Equity Line. These risks include dilution of stockholders, significant decline in our stock price and our inability to draw sufficient funds when needed.

 

In order to fund a notice for funding pursuant to the 2015 Equity Line (a “Drawdown Notice”), SBII will periodically purchase our common stock under the 2015 Equity Line and will, in turn, sell such shares to investors in the market at the market price on a best efforts basis, subject to certain conditions. This may cause our stock price to decline, which will require us to issue increasing numbers of common shares to SBII to raise the same amount of funds, as our stock price declines.




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Disclosure showing shares issuable if market stock price drops 25%, 50% and 75%


Drawdown Amount Required

 

 

 

 

 

100% of

25% Decrease

50% Decrease

75% Decrease

Stock

in Stock Price

in Stock Price

in Stock Price

Price (1)

(1)

(1)

(1)

 

 

 

 

 

 

 

 

 

 

Total No. of Shares Required to Raise $ 2,000 ,000(1)

 

 

20,000,000

 

26,666,666

 

40,000,000

 

80,000,000

    (1) Based on a price of $0.125 per share.


Based on the above chart, the sale of stock under the first drawdown is limited to 250,000 shares of common stock. This results in significantly less capital than the $2,000,000 capital commitment, per the Equity Line of Credit Agreement. There are no assurances that the price of common stock will appreciate, depreciate, or remain at the same price as a result of stock sales under this Agreement, however, if there is a 25% to 75% decline in stock value pricing, IFAN may see between 2% to 8% of the overall 2015 Equity Line amount of $2,000,000 with overall subsequent drawdowns over the eighteen (18) month period of the Agreement’s term.


The Company understands and acknowledges that the number of shares issuable upon purchases pursuant to this 2015 Equity Line will increase in certain circumstances including, but not necessarily limited to, the circumstance wherein the trading price of the Common Stock declines during the Draw Down Pricing Period. The Company's executive officers and directors have studied and fully understand the nature of the transactions contemplated by this 2015 Equity Line and recognize that they have a potential dilutive effect on the shareholders of the Company. The Board of Directors of the Company has concluded, in its good faith business judgment, and with full understanding of the implications, that such issuance is in the best interests of the Company. The Company specifically acknowledges that, subject to such limitations as are expressly set forth in the 2015 Equity Line, its obligation to issue shares upon purchases pursuant to this 2015 Equity Line is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.


Jumpstart Our Business Startups Act:


The Company is a development stage, company and qualifies as an “emerging growth company” as defined in the Jumpstart our Business Startups Act (the “JOBS Act”).  For so long as we are an emerging growth company, we will not be required to:

 

- have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

 

 

- comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditors report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

 

 

- submit certain executive compensation matters to shareholder advisory votes, such as say-on-pay and say-on-frequency; and

 

 

- disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEOs compensation to median employee compensation.

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We will remain an emerging growth company for up to five full fiscal years, although if the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of any February 28 before that time, we would cease to be an emerging growth company as of the following August 31, or if our annual revenues exceed $1 billion, we would cease to be an



8



emerging growth company the following fiscal year, or if we issue more than $1 billion in non-convertible debt in a three-year period, we would cease to be an emerging growth company immediately.


We will elect to take advantage of the extended transition period for complying with new or revised accounting standards under section 102(b)(1).  This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.


SUMMARY FINANCIAL DATA


The summarized financial data presented below is derived from, and should be read in conjunction with, our audited financial statements and related notes for the year ended August 31, 2014, and for the period ended May 31 , 2015, included on Page F-1 in this prospectus.


 

Financial Summary

 

May 31, 2015

($)

 

 

August 31, 2014

($)

 

Cash and Deposits

 

 

255,352 

 

 

 

-

 

Total Current Assets

 

 

301,927 

 

 

 

86,620

 

Total Current Liabilities

 

 

1,192,407 

 

 

 

310,708

 

Total Stockholder’s Equity (Deficit)

 

 

(890,480)

 

 

 

224,088

 



Statement of Operations

 

Twelve Months Ended

August 31, 2014

($)

 

Revenues

 

 

-

 

Cost of Revenues

 

 

-

 

Total Expenses

 

 

42,798

 

Net Loss

 

 

41,798

 



We recently commenced our operations and are currently have no revenue. Our deficit for the nine months ended May 31, 2015, was $(2,097,212). We anticipate that we will continue to incur net losses from our operations for the foreseeable future.


Risk Associated With Our Business


Corporate Background


IFAN Financial, Inc., is a development stage company that formed in the State of Nevada on June 11, 2010. We are a development stage company engaged in providing a ubiquitous mobile payment solution that utilizes the text messaging function of any mobile phone as well as providing a secure e-payment solution. This unique feature allows us to operate on any phone, any network, with or without data coverage. Significantly, this radically expands the available market for mobile payments from the roughly fifty-six percent of Americans who own smart phones to the almost ninety percent of Americans (over 270 million people) using any type of mobile phone, allowing them to pay bills, purchase goods and services, or simply to send money to friends and relatives, locally and internationally, using simple text messages.


The accompanying financial statements have been prepared assuming IFAN will continue as a going concern.  As discussed in Note 1 to the financial statements, IFAN has not generated any cash flow from operations and has accumulated losses since inception.  These factors raise substantial doubt about IFAN’s ability to continue as a going concern.  IFAN is in the development stage and to date has not generated any revenue.  As a development stage company, management devotes most of its activities to the development and marketing of the Company’s e-commerce payment technologies and products.  The financial statements have been prepared on a going concern basis, which implies that IFAN will continue to realize its assets and discharge its liabilities in the normal course of



9



business.  IFAN is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future.  There is no guarantee that IFAN will be able to raise any equity financing or generate profitable operations. As of August 31, 2014, IFAN has accumulated losses of $41,793 for the year ended August 31, 2014.  These factors raise substantial doubt regarding IFAN’s ability to continue as a going concern.


RISK FACTORS

 

The following risk factors should be considered carefully in addition to the other information contained in this report. This report contains forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that may cause our customers’ or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements, to differ. “Risk Factors,” “Management’s Discussion and Analysis,” and “Business,” as well as other sections in this report, discuss some of the factors that could contribute to these differences.


An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this report, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should read the section entitled “Special Note Regarding Forward Looking Statements” above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this report.


RISKS RELATED TO OUR BUSINESS


You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities.  The statements contained in or incorporated into this Registration Statement on Form S-1 that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements.  If any of the following risks actually occur, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.


We have a limited operating history with significant losses and expect losses to continue for the foreseeable future.


We have yet to establish any history of profitable operations and, for the six months ended, May 31, 2015, have incurred a net loss from operations of $2,097,212.   Our business operations began in 2013, and have resulted in net losses in each year.  We have generated only nominal revenues since our inception.  Our profitability will require increased awareness of our brand and increased sales of our products. We may not be able to successfully achieve any of these requirements or ever become profitable.


There is doubt about our ability to continue as a going concern due to recurring losses from operations, accumulated deficit and insufficient cash resources to meet our business objectives, all of which means that we may not be able to continue operations.


Our independent auditors have added an explanatory paragraph to their audit opinion issued in connection with the financial statements for the year ended August 31, 2014, with respect to their doubt about our ability to continue as a going concern. As discussed in Note 2 to our financial statements for the year ended August 31, 2014, we have generated operating losses since inception, and our cash resources are insufficient to meet our planned business objectives, which together raises doubt about our ability to continue as a going concern.





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Our operating results may fluctuate in the future, which could cause our stock price to decline.


Our quarterly and annual results of operations may fluctuate in the future as a result of a variety of factors, many of which are outside of our control. If our results of operations fall below the expectations of investors or any securities analysts who follow our common stock, the trading price of our common stock could decline substantially. Fluctuations in our quarterly or annual results of operations might result from a number of factors, including, but not limited to:


·

the timing and volume of purchases, use and reloads of our prepaid cards and related products and services;

·

the timing and success of new product or service introductions by us or our competitors;

·

seasonality in the purchase or use of our products and services;

·

reductions in the level of interchange rates that can be charged;

·

fluctuations in customer retention rates;

·

changes in the mix of products and services that we sell;

·

changes in the mix of retail distributors through which we sell our products and services;

·

the timing of commencement of new product development and initiatives that cause us to expand into new distribution channels, and the timing of costs of existing product roll-outs to new retail distributors and the length of time we must invest in those new products, channels or retail distributors before they generate material operating revenues;

·

our ability to obtain timely regulatory approval for strategic initiatives;

·

changes in our or our competitors’ pricing policies or sales terms;

·

significant changes in our risk policies and controls;

·

the timing of costs related to fraud losses;

·

the timing of commencement and termination of major advertising campaigns;

·

the timing of costs related to the development or acquisition of complementary businesses;

·

the timing of costs of any major litigation to which we are a party;

·

the amount and timing of capital expenditures and operating costs related to the maintenance and expansion of our business, operations and infrastructure, including our investments in a processing solution to eventually replace our current processing services provider;



11






·

accounting charges related to impairment of capitalized internal-use software, intangible assets and goodwill;

·

our ability to control costs, including third-party service provider costs and sales and marketing expenses in an increasingly competitive market;

·

changes in the political or regulatory environment affecting the banking or electronic payments industries generally or prepaid financial services specifically.



Our inability to complete our future research and development and engineering projects in a timely manner could have a material adverse effect of our results of operations, financial condition and cash flows.

 

If our research and development projects are not completed in a timely fashion we could experience:


·

substantial additional cost to obtain a marketable product;


·

additional competition resulting from competitors in the electronic payment industry, and;


·

delay in obtaining future inflow of cash from financing or partnership activities.


We could face intense competition, which could result in lower revenues and higher research and development expenditures and could adversely affect our results of operations.


Unless we keep pace with changing technologies, we could lose customers and fail to win new customers. In order to compete effectively in the electronic payment industry, we must continually design, develop and market new and enhanced technologies. Our future success will depend, in part, upon our ability to address the changing and sophisticated needs of the marketplace.


The market for our technology and products is still developing and if the industry adopts test criteria that are different from our internal test criteria our competitive position would be negatively affected. Additionally, governments could institute laws which negatively affect our competitive position.  Our plan to pursue sales in international markets may be limited by risks related to conditions in such markets.


Parts of our company’s business plan are dependent on business relationships with various parties


We expect to rely in part upon third party manufacturers, and distribution partners to sell our products, and we may be adversely affected if those parties do not actively promote their products.  Further, if our products are not timely delivered or do not perform as promised, we could experience increased costs, lower margins, liquidated damage payment obligations and reputational harm.


We must attract and maintain key personnel or our business may fail.


Success depends on the acquisition of key personnel.  We will have to compete with other companies both within and outside the electronic payment industry to recruit and retain competent employees.  If we cannot maintain qualified employees to meet the needs of our anticipated growth, this could have a material adverse effect on our business and financial condition.





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Even after entering into the 2015 Equity Line of Credit, we lack capital.


Even with the 2015 Equity Line of Credit, we will require additional funds to sustain our operations as presently contemplated. There can be no guaranty that such additional funds will be available in the future. If we are unable to obtain additional financing as required, or if its terms are too costly, we may be forced to curtail the expansion of our operations until such time as alternative financing may be arranged which could have a materially adverse impact on our operations and our shareholders' investments.


We may not be able to secure additional financing to meet our future capital needs due to changes in general economic conditions.


We anticipate requiring significant capital to continue development of our planned products to meet market evolution, and execute our business plan, generally.   We may use capital more rapidly than currently anticipated and incur higher operating expenses than currently expected, and we may be required to depend on external financing to satisfy our operating and capital needs. We may need new or additional financing in the future to conduct our operations or expand our business. Any sustained weakness in the general economic conditions and/or financial markets in the United States or globally could adversely affect our ability to raise capital on favorable terms or at all. From time to time we have relied, and may also rely in the future, on access to financial markets as a source of liquidity to satisfy working capital requirements and for general corporate purposes. We may be unable to secure debt or equity financing on terms acceptable to us, or at all, at the time when we need such funding. If we do raise funds by issuing additional equity or convertible debt securities, the ownership percentages of existing stockholders would be reduced, and the securities that we issue may have rights, preferences or privileges senior to those of the holders of our common stock or may be issued at a discount to the market price of our common stock which would result in dilution to our existing stockholders. If we raise additional funds by issuing debt, we may be subject to debt covenants, which could place limitations on our operations including our ability to declare and pay dividends. Our inability to raise additional funds on a timely basis would make it difficult for us to achieve our business objectives and would have a negative impact on our business, financial condition and results of operations.


A data security breach could expose us to liability and protracted and costly litigation, and could adversely affect our reputation and operating revenues.


We and our future retail distributors, network acceptance members, third-party processors and the merchants that accept our cards receive, transmit and store confidential customer and other information in connection with the sale and use of our prepaid financial services. Our encryption software and the other technologies we will use to provide security for storage, processing and transmission of confidential customer and other information may not be effective to protect against data security breaches by third parties. The risk of unauthorized circumvention of our security measures has been heightened by advances in computer capabilities and the increasing sophistication of hackers. Our future retail distributors, network acceptance members, third-party processors and the merchants that accept our cards also may experience similar security breaches involving the receipt, transmission and storage of our confidential customer and other information. Improper access to our or these third parties’ systems or databases could result in the theft, publication, deletion or modification of confidential customer and other information.


A data security breach of the systems on which sensitive cardholder data and account information are stored could lead to fraudulent activity involving our products and services, reputational damage and claims or regulatory actions against us. If we are sued in connection with any data security breach, we could be involved in protracted and costly litigation. If unsuccessful in defending that litigation, we might be forced to pay damages and/or change our business practices or pricing structure, any of which could have a material adverse effect on our operating revenues and profitability. We would also likely have to pay (or indemnify the banks that issue our cards for) fines, penalties and/or other assessments imposed by credit card companies as a result of any data security breach. Further, a significant data security breach could lead to additional regulation, which could impose new and costly compliance obligations. In addition, a data security breach at one of our potential third-party banks that issue our cards or at our potential retail distributors, network acceptance members or third-party processors could result in significant reputational harm to us and cause the use and acceptance of our cards to decline, either of which could have a significant adverse impact on our operating revenues and future growth prospects. Moreover, it may require substantial financial resources to address and remediate any such breach, which could have a significant adverse impact on our operating results.



13



 

Fraudulent and other illegal activity involving our products and services could lead to reputational damage to us, reduce the use and acceptance of our cards and reload network, and may adversely affect our financial position and results of operations.


Criminals are using increasingly sophisticated methods to engage in illegal activities involving prepaid cards, reload products or cardholder information. These activities often include malicious social engineering schemes, where people are asked to provide a prepaid card or reload product in order to obtain a loan or purchase goods or services. Illegal activities may also include fraudulent payment or refund schemes and identity theft. We will rely upon third parties for some transaction processing services, which subjects us and our cardholders to risks related to the vulnerabilities of those third parties. A single significant incident of fraud, or increases in the overall level of fraud, involving our cards and other products and services, could result in reputational damage to us, which could reduce the use and acceptance of our cards and other products and services, cause retail distributors or network acceptance members to cease doing business with us or lead to greater regulation that would increase our compliance costs. Fraudulent activity could also result in the imposition of regulatory sanctions, including significant monetary fines, which could adversely affect our business, operating results and financial condition. Furthermore, we have accelerated the implementation of risk control mechanisms that have made it more difficult for all customers, including legitimate customers, to obtain and use our products and services. We believe it is likely that our risk control mechanisms will continue to adversely affect our new card activations from legitimate customers for the foreseeable future and that our operating revenues, excluding stock-based retailer incentive compensation, will be negatively impacted as a result.


We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.

 

We have not achieved revenues and have limited significant tangible assets. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. We have a limited operating history and must be considered in the development stage. Our success is significantly dependent on the successful research and development of our planned products, which cannot be guaranteed. Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to complete the research and development of our products and operate on a profitable basis. We are in the development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.

 

If we are not able to adequately protect our intellectual property, then we may not be able to compete effectively and we may not be profitable.

 

Our commercial success may depend, in part, on obtaining and maintaining patent protection, trade secret protection and regulatory protection of our technologies and product candidates as well as successfully defending third-party challenges to such technologies and candidates. We will be able to protect our technologies and product candidates from use by third parties only to the extent that valid and enforceable patents, trade secrets or regulatory protection cover them and we have exclusive rights to use them. The ability of our licensors, collaborators and suppliers to maintain their patent rights against third-party challenges to their validity, scope or enforceability will also play an important role in determining our future.

  

The copyright and patent positions of technology related companies can be highly uncertain and involve complex legal and factual questions that include unresolved principles and issues. No consistent policy regarding the breadth of claims allowed regarding such companies’ patents has emerged to date in the United States, and the patent situation outside the United States is even more uncertain. Changes in either the patent laws or in interpretations of patent laws in the United States or other countries may diminish the value of our intellectual property. Accordingly, we cannot predict with any certainty the range of claims that may be allowed or enforced concerning our patents.

 

We may also rely on trade secrets to protect our technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. While we seek to protect confidential information, in part, through confidentiality agreements with our consultants and scientific and other advisors, they



14



may unintentionally or willfully disclose our information to competitors. Enforcing a claim against a third party related to the illegal acquisition and use of trade secrets can be expensive and time consuming, and the outcome is often unpredictable. If we are not able to maintain patent or trade secret protection on our technologies and product candidates, then we may not be able to exclude competitors from developing or marketing competing products, and we may not be able to operate profitability.

 

If we are the subject of an intellectual property infringement claim, the cost of participating in any litigation could cause us to go out of business.

 

There has been, and we believe that there will continue to be, significant litigation and demands for licenses in our industry regarding patent and other intellectual property rights. Although we anticipate having a valid defense to any allegation that our current products, production methods and other activities infringe the valid and enforceable intellectual property rights of any third parties, we cannot be certain that a third party will not challenge our position in the future. Other parties may own patent rights that we might infringe with our products or other activities, and our competitors or other patent holders may assert that our products and the methods we employ are covered by their patents. These parties could bring claims against us that would cause us to incur substantial litigation expenses and, if successful, may require us to pay substantial damages. Some of our potential competitors may be better able to sustain the costs of complex patent litigation, and depending on the circumstances, we could be forced to stop or delay our research, development, manufacturing or sales activities. Any of these costs could cause us to go out of business.


We could lose our competitive advantages if we are not able to protect any proprietary technology and intellectual property rights against infringement, and any related litigation could be time-consuming and costly.


Our success and ability to compete depends to a significant degree on our proprietary technology incorporated into our products. If any of our competitor’s copies or otherwise gains access to our proprietary technology or develops similar technologies independently, we would not be able to compete as effectively.

 

We also consider our trademarks invaluable to our ability to continue to develop and maintain the goodwill and recognition associated with our brand. We have registered various trademarks in the United States. These and any other measures that we may take to protect our intellectual property rights, which presently are based upon a combination of copyright, trade secret and trademark laws, may not be adequate to prevent their unauthorized use.

 

Further, the laws of foreign countries may provide inadequate protection of such intellectual property rights. We may need to bring legal claims to enforce or protect such intellectual property rights. Any litigation, whether successful or unsuccessful, could result in substantial costs and diversions of resources. In addition, notwithstanding any rights we have secured in our intellectual property, other persons may bring claims against us that we have infringed on their intellectual property rights, including claims based upon the content we license from third parties or claims that our intellectual property right interests are not valid. Any claims against us, with or without merit, could be time consuming and costly to defend or litigate, divert our attention and resources, result in the loss of goodwill associated with our service marks or require us to make changes to our website or other of our technologies.


Our products may become obsolete and unmarketable if we are unable to respond adequately to rapidly changing technology and customer demands.


Our industry is characterized by rapid changes in technology and customer demands. As a result, our products and services may quickly become obsolete and unmarketable. Our future success will depend on our ability to adapt to technological advances, anticipate customer demands, develop new products and enhance our current products on a timely and cost-effective basis. Further, our products must remain competitive with those of other companies with substantially greater resources. We may experience technical or other difficulties that could delay or prevent the development, introduction or marketing of new products or enhanced versions of existing products. Also, we may not be able to adapt new or enhanced services to emerging industry standards, and our new products may not be favorably received.

 




15



Our success is dependent upon our marketing efforts.

 

We have limited experience in marketing mobile payment systems and limited financial, personnel and other resources to undertake extensive marketing activities. If we are unable to generate significant market awareness for our products and our brands our operations may not generate sufficient revenues for us to execute our business plan, generate revenues and achieve profitable operations.

 

We will rely, in part, on the efforts of our independent sales distributors and outside networks to augment our internal sales efforts and distribute our product to wholesalers and or retailers to generate revenues. Any change in distributors or our ability to timely replace any given distributor would have a material adverse effect on our business, prospects, financial condition and results of operations.


Our directors may face conflicts of interest in connection with our participation in certain ventures because they are directors of other companies.

 

Our directors Mr. J. Christopher Mizer, and Mr. Steve Scholl are also directors of other companies (including industry related companies) and, if those other companies participate in ventures in which we may participate, our directors may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. It is possible that due to our directors’ conflicting interests, we may be precluded from participating in certain projects that we might otherwise have participated in, or we may obtain less favorable terms on certain projects than we might have obtained if our directors were not also directors of other related companies. In an effort to balance their conflicting interests, our directors may approve terms equally favorable to all of their companies as opposed to negotiating terms more favorable to us but adverse to their other companies. Additionally, it is possible that we may not be afforded certain opportunities to participate in particular projects because those projects are assigned to our directors’ other companies for which the directors may deem the projects to have a greater benefit. Currently Mr. Mizer and Mr. Scholl, spend approximately 40 hours per week working on our Company.


Our future performance is dependent on our ability to retain key personnel, loss of which would adversely affect our success and growth.

 

Our performance is substantially dependent on the performance of our senior management. In particular, our success depends on the continued efforts of Mr. J. Christopher Mizer, our President and Chief Executive Officer, and a Director and Mr. Steve Scholl our Chief Financial Officer, Treasurer and a Director of the Company. The loss of their services could have a material adverse effect on our business, results of operations and financial condition as our potential future revenues would most likely dramatically decline and our costs of operations would rise. We do not have employment agreements in place with any of our officers or our key employees, nor do we have key person insurance covering our employees.


Our future success may be dependent upon our obtaining licenses and intellectual property rights and know-how and protecting these rights.


The key assets of the Company will be in its know-how and the expertise, capabilities and relationships brought to the Company by its management team. The Company may also research the obtaining of additional licenses and intellectual property rights of its mobile payment platform and process and technology in the future. The Company will continue to develop its intellectual property portfolio and licensing rights.  As the business progresses, the Company plans to continually build out its portfolio of owned and licensed intellectual property, and take all appropriate steps to protect these rights. No assurances can be given that the Company will be successful in building out its portfolio of owned and licensed intellectual property and in protecting these rights.

 

RISKS RELATING TO OUR COMMON STOCK

 

Our stock price may be volatile, which may result in losses to our shareholders.

 

The stock markets have experienced significant price and trading volume fluctuations, and the market prices of companies listed on the Over-the-counter Bulletin Board quotation system in which shares of our common stock are listed, have been volatile in the past and have experienced sharp share price and trading volume changes. The



16



trading price of our common stock is likely to be volatile and could fluctuate widely in response to many factors, including the following, some of which are beyond our control:


·

variations in our operating results;

·

changes in expectations of our future financial performance, including financial estimates by securities analysts and investors;

·

changes in operating and stock price performance of other companies in our industry;

·

additions or departures of key personnel; and

·

future sales of our common stock.

Domestic and international stock markets often experience significant price and volume fluctuations. These fluctuations, as well as general economic and political conditions unrelated to our performance, may adversely affect the price of our common stock.  


The price of our common stock is subjected to volatility.

 

The market for IFAN’s common stock is highly volatile. The trading price of IFAN’s common stock is subject to wide fluctuations in response to, among other things, quarterly variations in operating and financial results, and general economic and market conditions. In addition, statements or changes in opinions, ratings, or earnings estimates made by brokerage firms or industry analysts relating to their markets or relating to IFAN could result in an immediate and adverse effect on the market price of our common stock. The highly volatile nature of IFAN’s stock price may cause investment losses for their shareholders. If securities class action litigation is brought against IFAN, such litigation could result in substantial costs while diverting management's attention and resources.


Our common shares may become thinly traded and you may be unable to sell at or near ask prices, or at all.


We cannot predict the extent to which an active public market for trading our common stock will be sustained. The trading volume of our common shares may be sporadically or “thinly-traded,” meaning that the number of persons interested in purchasing our common shares at or near bid prices at a certain given time may be relatively small or non-existent.


This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community who generate or influence sales volume.  Even if we came to the attention of such persons, those persons tend to be risk-averse and may be reluctant to follow, purchase, or recommend the purchase of shares of an unproven company such as ours until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained.


The market price for our common stock may become volatile given our status as a relatively small company, which could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your purchase price if at all, which may result in substantial losses to you.


Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale



17



dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.


We do not anticipate paying any cash dividends to our common shareholders.


We presently do not anticipate that we will pay dividends on any of our common stock in the foreseeable future. If payment of dividends does occur at some point in the future, it would be contingent upon our revenues and earnings, if any, capital requirements, and general financial condition. The payment of any common stock dividends will be within the discretion of our Board of Directors. We presently intend to retain all earnings, to implement our business plan; accordingly, we do not anticipate the declaration of any dividends for common stock in the foreseeable future.


Additional stock offerings may dilute current stockholders.


Given our plans and our expectation that we will need additional capital and personnel, we may need to issue additional shares of capital stock or securities convertible into or exercisable for shares of capital stock, including preferred stock, options or warrants. The issuance of additional shares of capital stock for any of these reasons or pursuant to the exercise of Warrants may dilute the ownership of our current shareholders.


Volatility in our common share price may subject us to securities litigation.

 

The market for our common stock may be characterized by significant price volatility as compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management's attention and resources.


The elimination of monetary liability against our directors, officers and employees under Nevada law and the existence of indemnification rights of our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees.


Our Articles of Incorporation contains a specific provision that eliminates the liability of our directors and officers for monetary damages to our company and shareholders. Further, we are prepared to give such indemnification to our directors and officers to the extent provided for by Nevada law. We may also have contractual indemnification obligations under our employment agreements with our officers. The foregoing indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and resultant costs may also discourage our company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors and officers even though such actions, if successful, might otherwise benefit our company and shareholders.


Our business is subject to changing regulations related to corporate governance and public disclosure that have increased both our costs and the risk of noncompliance.

 

Because our common stock is publicly traded, we are subject to certain rules and regulations of federal, state and financial market exchange entities charged with the protection of investors and the oversight of companies whose securities are publicly traded. These entities, including the Public Company Accounting Oversight Board, the SEC and FINRA, have issued requirements and regulations and continue to develop additional regulations and requirements in response to corporate scandals and laws enacted by Congress, most notably the Sarbanes-Oxley Act of 2002. Our efforts to comply with these regulations have resulted in, and are likely to continue resulting in, increased general and administrative expenses and diversion of management time and attention from revenue-



18



generating activities to compliance activities. Because new and modified laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices.


We are an “emerging growth company” under the JOBS Act of 2012, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

 

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We will remain an “emerging growth company” for up to five years, although we will lose that status sooner if our revenues exceed $1 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any February 28.


There are substantial risks associated with the 2015 Equity Line of Credit with SBII which could contribute to the decline of the price of our Common Shares and have a dilutive impact on our existing stockholders.


In order to obtain needed capital, we entered into the 2015 Equity Line of Credit with SBII. The sale of our Common Shares pursuant to the 2015 Equity Line of Credit will have a dilutive impact on our stockholders. We believe SBII intends to promptly re-sell the Common Shares that we sell to it under the 2015 Equity Line of Credit. Such resales could cause the market price of our Common Shares to decline significantly. Any subsequent sales by us to SBII under the 2015 Equity Line of Credit may, to the extent of any such decline, require us to issue a greater number of Common Shares to SBII in exchange for each dollar of such subsequent sale. Under these circumstances our existing stockholders would experience greater dilution (See: “Management's Discussion and Analysis of Financial Condition and Results of Operations”). The sale of Common Shares under the 2015 Equity Line of Credit could encourage short sales by third parties which could contribute to the further decline of the price of our Common Stock.


Because we have elected to use the extended transition period for complying with new or revised accounting standards for an “emerging growth company” our financial statements may not be comparable to companies that comply with public company effective dates.


We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.  This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.  As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.  Consequently, our financial statements may not be comparable to companies that comply with public company effective dates.  Because our financial statements may not be comparable to companies that comply with public company effective dates, investors may have difficulty evaluating or comparing our business, performance or prospects in comparison to other public companies, which may have a negative impact on the value and liquidity of our common stock.


We may issue additional common shares in the future, which would reduce our current investors’ percentage of ownership and which may dilute our share value.


Our Articles of Incorporation authorizes the issuance of 800,000,000 shares of common stock, of which 84,486,774 shares are issued and outstanding. The future issuance of additional shares of common stock which we are currently



19



authorized to issue may result in substantial dilution in the percentage of our stock held by our then existing stockholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our Common Stock. Additionally, the terms of any preferred stock that we might issue may substantially dilute the voting rights of our then-current stockholders, or may require us to pay significant dividends before any distributions may be made to our other stockholders.


FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.


In addition to the “penny stock” rules described below, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may have the effect of reducing the level of trading activity in our Common Stock. As a result, fewer broker-dealers may be willing to make a market in our Common Stock, reducing a stockholder’s ability to resell shares of our Common Stock.


Our common stock will be subject to the “Penny Stock” Rules of the SEC and the trading market in our securities will be limited, which will make transactions in our stock cumbersome, which may reduce the value of an investment in our stock.


The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions.  For any transaction involving a penny stock, unless exempt, the rules require:


·

that a broker or dealer approve a person’s account for transactions in penny stocks; and

·

that the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.


In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:


·

obtain financial information and investment experience objectives of the person; and

·

make a reasonable determination that the transactions in penny stocks are suitable for that person and that the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.


The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight:


·

sets forth the basis on which the broker or dealer made the suitability determination; and

·

confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction.


Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common shares thus causing a decline in the market value of our stock.


Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock



20



transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.


Because we do not intend to pay any cash dividends on our Common Stock, our stockholders will not be able to receive a return on their shares unless they sell them.


We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless the value of such shares appreciates and they sell them. There is no assurance that stockholders will be able to sell shares when desired.


Voting control of our Common Stock is possessed by Mr. J. Christopher Mizer. This concentration of ownership could discourage or prevent a potential takeover of IFAN Financial, Inc., that might otherwise result in your receiving a premium over the market price for your Common Stock.


The voting control of our Common Stock is possessed by Mr. J. Christopher Mizer, our President, Chief Executive Officer and a Director, who was issued 600,000 shares of our Preferred Stock Holders of our Common Stock are entitled to one non-cumulative vote on all matters submitted to our stockholders. The result of this concentration of ownership and voting control is that Mr. J. Christopher Mizer has the ability to control all matters submitted to our stockholders for approval and to control our management and affairs, including extraordinary transactions such as mergers and other changes of corporate control, and going private transactions. Additionally, this concentration of voting power could discourage or prevent a potential takeover of the Company that might otherwise result in your receiving a premium over the market price for your Common Stock.


Sales of our shares relying upon Rule 144 may depress prices in that market by a material amount.


A large portion of the currently outstanding shares of our Common Stock are ‘‘restricted securities’’ within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted securities, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. Rule 144 provides in essence that a person who has held restricted securities for a prescribed period may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed 1.0% of a company’s outstanding Common Stock. The alternative average weekly trading volume during the four calendar weeks prior to the sale is not available to our stockholders being that the OTCBB or OTC Markets (if and when listed thereon) is not an ‘‘automated quotation system’’ and, accordingly, market based volume limitations are not available for securities quoted only over the OTCBB or the OTC Markets. As a result of revisions to Rule 144 which became effective on or about February 15, 2008, there is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who has not been an officer, director or control person for at least 90 consecutive days) after the restricted securities have been held by the owner for a period of one year. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to registration of shares of Common Stock of present stockholders, may have a depressive effect upon the price of the Common Stock in any market that may develop. 


RISKS RELATED TO THE EQUITY LINE OF CREDIT

 

SBII will pay less than the then-prevailing market price of our common stock, which could cause the price of our common stock to decline.

 

Our common stock to be issued under the Equity Line of Credit Agreement will be purchased at a twenty percent (20%) discount or 80% of the of the average of the 3 lowest vwap of the common stock during a respective Draw Down Pricing Period, or 85% of the price of the common stock on the last trading day of the respective Draw Down Pricing Period.

 

SBII has a financial incentive to sell our shares immediately upon receiving the shares to realize the profit between the discounted price and the market price. If SBII sells our shares, the price of our common stock may decrease. If



21



our stock price decreases, SBII may have a further incentive to sell such shares. Accordingly, the discounted sales price in the Drawdown Agreement may cause the price of our common stock to decline.


We are registering an aggregate of  10,000,000  shares of common stock to be issued under the equity line of credit. The sale of such shares could depress the market price of our common stock.

 

We are registering an aggregate of 10,000,000 shares of common stock under the registration statement of which this prospectus forms a part for issuance pursuant to the equity line of credit. The sale of these shares into the public market by SBII could depress the market price of our common stock.

 

We may not have access to the full amount under the equity line of credit.

 

For the three consecutive trading days prior to July 13, 2015 the closing price of our common stock was $0.10. There is no assurance that the market price of our common stock will increase or remain the same substantially in the near future. The entire commitment under the equity line of credit is $2,000,000. The aggregate number of shares of common stock necessary to raise the entire $2,000,000 at $.10 per share is 20,000,000. We may not have access to the remaining commitment under the equity line of credit unless the market price of our common stock increases or remains stable. Quantitatively, the Company may expect to receive approximately 10% of the full line of credit, resulting in a total drawdown of $200,000. The Company's executive officers and directors fully recognize that the Company may not provide them access to the full line of credit.

 

715,513,226 shares of our common stock (excluding 961,858 shares of preferred stock) remain available for issuance.

 

Our common stock price may decline by our draw on our equity line of credit.

 

Effective May 28, 2015, we entered into the 2015 Equity Line with SBII. Pursuant to the 2015 Equity Line, when we deem it necessary, we may raise capital through the private sale of our common stock to SBII at a price equal to 80% of lowest traded price during the applicable pricing period. Because this price is lower than the prevailing market price of our common stock, to the extent that the put right is exercised, your ownership interest will be diluted in direct proportion.

 

There may not be a sufficient price of our common stock to permit us to acquire adequate funds, which may adversely affect our liquidity.


The Drawdown Agreement provides that the number of shares sold pursuant to each Notice plus the shares held by SBII at that time shall not exceed 4.99% of the issued and outstanding shares of common stock of the Company. If the price our common stock is too low, it is possible that we may not be permitted to draw the full amount of proceeds of the drawdown request, which may not provide adequate funding for our planned operations and may materially decrease our liquidity. Analysis shows that we are not able to make an initial drawdown at current market prices . If our share price is $0.125 a drawdown request will result in a drawdown of 250,000 shares of stock resulting in $25,000 of actual available funds. While the Company cannot predict a quantitative risk factor in specific numbers, it can quantify its initial drawdown expectation.

 

We may draw on our equity line of credit to the extent that a change of control occurs.

 

The Company may continue to make drawdown requests while the Selling Stockholder holds shares of common stock or sells shares to a specific party, thereby causing such purchasing party to gain control of the Company. This could jeopardize the execution of the Company’s business plan and may disrupt operations. The Company does not anticipate making drawdown requests under this scenario.


Future issuances of common shares may be adversely affected by the 2015 Equity Line.


The market price of our common stock could decline as a result of issuances and sales by us, including pursuant to the 2015 Equity Line, or sales by our existing stockholders, of common stock, or the perception that these issuances and sales could occur. Sales by our stockholders might also make it more difficult for us to issue and sell common



22



stock at a time and price that we deem appropriate. It is likely that the sale of shares by SBII will depress the market price of our common stock.


Draw Downs under the 2015 Equity Line may cause dilution to existing shareholders.


SBII has committed to purchase up to $2,000,000 worth of shares of our common stock. From time to time during the term of the 2015 Equity Line, and at our sole discretion, we may present SBII with a Draw Down Notice requiring SBII to purchase shares of our common stock. The purchase price to be paid by SBII will be 80% of the Market Price of our common stock.  We will be entitled to put to SBII on each Draw Down Notice date such number of shares of common stock as equals the lesser of (i) $25,000 or, (ii) 200% of the average daily volume based on the trailing 10 Trading Days preceding the first day of the Draw Down Notice Period; provided that the number of shares to be purchased by SBII shall not exceed the number of such shares that, when added to the number of shares of our common stock then beneficially owned by SBII, would exceed 4.99% of the number of shares of our common stock outstanding. As a result, our existing shareholders will experience immediate dilution upon the purchase of any of the shares by SBII. The issue and sale of the shares under the 2015 Equity Line may also have an adverse effect on the market price of the common shares. SBII may resell some, if not all, of the shares that we issue to it under the 2015 Equity Line and such sales could cause the market price of the common stock to decline significantly. To the extent of any such decline, any subsequent puts would require us to issue and sell a greater number of shares to SBII in exchange for each dollar of the put amount. Under these circumstances, the existing shareholders of our company will experience greater dilution. The effect of this dilution may, in turn, cause the price of our common stock to decrease further, both because of the downward pressure on the stock price that would be caused by a large number of sales of our shares into the public market by SBII, and because our existing stockholders may disagree with a decision to sell shares to SBII at a time when our stock price is low, and may in response decide to sell additional shares, further decreasing our stock price. If we draw down amounts under the 2015 Equity Line when our share price is decreasing, we will need to issue more shares to raise the same amount of funding. There is no guarantee that we will satisfy the conditions to the 2015 Equity Line. Although the 2015 Equity Line provides that we can require SBII to purchase, at our discretion, up to $2,000,000 worth of shares of our common stock in the aggregate, there can be no assurances that we will be able to satisfy the closing conditions applicable for each put. If we fail to satisfy the applicable closing conditions, we will not be able to sell the put shares to SBII. There is no guarantee that we will be able to fully utilize the 2015 Equity Line.  


CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS


This Prospectus contains projections and statements relating to the Company that constitute “forward-looking statements.”  These forward-looking statements may be identified by the use of predictive, future-tense or forward-looking terminology, such as “intends,” “believes,” “anticipates,” “expects,” “estimates,” “may,” “will,” “might,” “outlook,” “could,” “would,” “pursue,” “target,” “project,” “plan,” “seek,” “should,” “assume,” or similar terms or the negatives thereof.  Such statements speak only as of the date of such statement, and the Company undertakes no ongoing obligation to update such statements.  These statements appear in a number of places in this Prospectus and include statements regarding the intent, belief or current expectations of the Company, and its respective directors, officers or advisors with respect to, among other things:


•  trends affecting the Company’s financial condition, results of operations or future prospects

•  the Company’s business and growth strategies

•  the Company’s financing plans and forecasts

•  the factors that management expects to contribute to its success and the Company’s ability to be successful in the future

•  the Company’s business model and strategy for realizing positive results when sales begin

•  competition, including the Company’s ability to respond to such competition and its expectations regarding continued competition in the market in which the Company competes;

•  expenses

•  the Company’s expectations with respect to continued disruptions in the global capital markets and reduced levels of consumer spending and the impact of these trends on its financial results

•  the Company’s ability to meet its projected operating expenditures and the costs associated with development of new projects

•  the Company’s ability to pay dividends or to pay any specific rate of dividends, if declared



23



•  the impact of new accounting pronouncements on its financial statements

•  that the Company’s cash flows from operating activities will be sufficient to meet its projected operating expenditures for the next twelve months

•  the Company’s market risk exposure and efforts to minimize risk

•  development opportunities and its ability to successfully take advantage of such opportunities

•  regulations, including anticipated taxes, tax credits or tax refunds expected

•  the outcome of various tax audits and assessments, including appeals thereof, timing of resolution of such audits, the Company’s estimates as to the amount of taxes that will ultimately be owed and the impact of these audits on the Company’s financial statements

•  the Company’s overall outlook including all statements under Management’s Discussion and Analysis or Plan of Operation

•  that estimates and assumptions made in the preparation of financial statements in conformity with US GAAP may differ from actual results, and

•  expectations, plans, beliefs, hopes or intentions regarding the future.


Potential investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that, should conditions change or should any one or more of the risks or uncertainties materialize or should any of the underlying assumptions of the Company prove incorrect, actual results may differ materially from those projected in the forward-looking statements as a result of various factors, some of which are unknown.  The factors that could adversely affect the actual results and performance of the Company include, without limitation:


•  the Company’s inability to raise additional funds to support operations if required

•  the Company’s inability to effectively manage its growth

•  the Company’s inability to achieve greater and broader market acceptance in existing and new market segments

•  the Company’s inability to successfully compete against existing and future competitors

•  the effects of intense competition that exists in the industry

•  the effects of an economic downturn and its effect on consumer spending

•  the risk that negative industry or economic trends, reduced estimates of future cash flows, disruptions to the Company’s business or lack of growth in the business, may result in significant write-downs or impairments in future periods

•  the effects of events adversely impacting the economy or the effects of the current economic recession, war, terrorist or similar activity or disasters

•  financial community perceptions of the Company and the effect of economic, credit and capital market conditions on the economy and,

•  other factors described elsewhere in this Prospectus, or other reasons.  


Potential investors are urged to carefully consider such factors.  All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements and the “Risk Factors” described herein.


ITEM 4. USE OF PROCEEDS


We will not receive any proceeds from the sale of the common stock by the selling security holder pursuant to this prospectus. All proceeds from the sale of the shares will be for the account of the Selling Stockholder.


However, the Company anticipates receiving up to $2,000,000 gross proceeds pursuant to the 2015 Equity Line with SBII. The maximum amount we can receive is dependent on the price of our common stock, and could be less than $2,000,000. We chose an equity line of $2,000,000 as we require large sums of financing for our staged growth, which will be obtained either through debt financing, or equity financing. 


For illustrative purposes, we’ve set forth below how we plan to use such proceeds in the event we receive $2,000,000, $1,000,000, $500,000 or $100,000 from this offering:




24




Offering Proceeds:

$

2,000,000

$

1,000,000

$

500,000

$

100,000

 

 

 

 

 

Building and Testing E-Commerce Applications

$

125,000

$

125,000

$

75,000

$

25,000

 

 

 

 

 

Website

$

5,000

$

5,000

$

5,000

$

5,000

 

 

 

 

 

Patents

$

15,000

$

15,000

$

10,000

$

-

 

 

 

 

 

Marketing

$

1,205,000

$

365,000

$

160,000

$

20,000

 

 

 

 

 

Future Products (Card Reader; QR Code Reader)

$

350,000

$

250,000

$

100,000

$

50,000

 

 

 

 

 

General and Corporate Expenses

$

300,000

$

240,000

$

150,000

$

-

 

 

 

 

 

Totals

$

2,000,000

$

1,000,000

$

500,000

$

100,000



If the Company receives less than $2,000,000, the priority of funds will be as follows: first priority will be to cover building and testing of our e-commerce applications, which we anticipate to be a minimum of $100,000 for the next twelve month period. Funds raised over $100,000 will be used between general and corporate expenses, website, protecting our patents, marketing, and support in the ordinary course of the Company’s business.


The aggregate amounts of $2,000,000, $1,000,000, $500,000 and $100,000 listed above assume that SBII is able to sell the shares of common stock it receives in each drawdown and therefore, the maximum advance amount of 4.99% of the issued and outstanding shares is never met or exceeded.


Based on the current number of issued and outstanding shares, which was 84,486,774 as of October 9, 2015, and our current share price we would not be able to make an initial drawdown. At a market price of $0.125 the maximum advance amount of shares would be 250,000. This number does not factor in the aggregate common shares post advance. With the closing price of the common stock on the OTC Markets, on October 9, 2015, being $0.075, we would not be able to make a draw down request, At a market price of $0.125 the maximum advance amount would result in the Company receiving $25,000.


We have agreed to bear the certain expenses relating to the registration of the shares for the selling security holder. We anticipate receiving proceeds from any "Draw Down Notices" tendered to SBII under the 2015 Equity Line. Such proceeds from the 2015 Equity Line are intended to be used approximately as follows: to fund our mobile payment applications, research and development, marketing, advertising, distribution efforts, technology development, product line expansion and enhancement and working capital needs.


If the Company requires additional funding, it will seek such funds from friends, family, and business acquaintances of the officers and directors in order to continue operations. As with any form of financing, there are uncertainties concerning the availability of such funds, and the likelihood that such funds will be available to the Company on acceptable terms since the Company has not received any firm commitments or indications of interest from the friends, family members, or business acquaintances of the officers and directors regarding potential investments in the Company.


ITEM 5. DETERMINATION OF OFFERING PRICE


The offering price for the shares sold to SBII under the 2015 Equity Line will equal 80% of the Market Price of our common stock on the date the purchase price is calculated. To the extent that the disparity between the offering price



25



and market price of the common stock is material, such disparity was determined by us to be fair in consideration of SBII establishing a line of credit to facilitate our ongoing operations.


Equity Purchase Agreement


We entered into the Equity Line of Credit Agreement (“2015 Equity Line”) with SBII on May 28, 2015. Pursuant to the 2015 Equity Line, SBII committed to purchase up to $2,000,000 worth of our common stock, over a period of time terminating on the earlier of: (i) 18 months from the date of the agreement; (ii) the date on which SBII has purchase shares of our common stock pursuant to the 2015 Equity Line for an aggregate maximum purchase price of $2,000,000.  We may draw on this facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the 2015 Equity Line. The purchase price to be paid by SBII will be 80% of the Market Price of our common stock.  We will be entitled to put a Draw Down Notice to SBII after the Initial Closing conditions as set forth in the 2015 Equity Line have been satisfied, and that each Draw Down that equals the lesser of (i) $25,000, or (ii) 200% of the average of the dollar volume based on the trailing 10 Trading Days preceding the first day of the Draw Down Notice that constitutes the Draw Down Pricing Period; provided that the number of shares to be purchased by SBII shall not exceed the number of such shares that, when added to the number of shares of our common stock then beneficially owned by SBII, would exceed 4.99% of the number of shares of our common stock outstanding.  The 2015 Equity Line provides for payment to us of the price for the shares delivered to SBII within one business day of electronic delivery of the shares. There are draw down restrictions applied on days between the Draw Down Notice date and the funding date with respect to that particular Draw Down Notice. During such time, we are not entitled to deliver another Draw Down Notice. There are circumstances under which we will not be entitled to issue a Draw Down Notice of shares to SBII, including the following:


-

we will not be entitled to issue a Draw Down Notice to SBII unless there is an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"), to cover the resale of the shares by SBII;


-

we will not be entitled to issue a Draw Down Notice to SBII unless our common stock is current in its SEC filing requirements and continues to be quoted on the OTC Markets and has not been suspended from trading;


-

we will not be entitled to issue a Draw Down Notice to SBII  if an injunction shall have been issued and remain in force against us, or action commenced by a governmental authority which has not been stayed or abandoned, prohibiting the purchase or the issuance of the shares to SBII;


-

we will not be entitled to issue a Draw Down Notice to SBII if during the Draw Down Pricing Period through the Settlement Date, the Common Stock has a price of less than $0.10 per share as quoted on the relevant trading market;


-

we will not be entitled to issue a Draw Down Notice to SBII if we have not complied with our obligations and are otherwise in breach of or in default under, the 2015 Equity Line, our registration rights agreement with SBII (the "Registration Rights Agreement") or any other agreement executed in connection therewith with SBII; and,


-

we will not be entitled to issue a Draw Down Notice to SBII to the extent that such shares would cause SBII's beneficial ownership to exceed 4.99% of our outstanding shares.


The 2015 Equity Line further provides that SBII is entitled to customary indemnification from us for any losses or liabilities it suffers as a result of any material misrepresentation, breach of warranty or non-fulfillment of or a failure to perform any material covenant or agreement contained in the 2015 Equity Line. The 2015 Equity Line also contains representations and warranties of each of the parties. The assertions embodied in those representations and warranties were made for purposes of the 2015 Equity Line and are subject to qualifications and limitations agreed to by the parties in connection with negotiating the terms of the 2015 Equity Line. In addition, certain representations and warranties were made as of a specific date, may be subject to a contractual standard of



26



materiality different from what a stockholder or investor might view as material, or may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts.


ITEM 6. DILUTION


Under the 2015 Equity Line, the purchase price of the shares to be sold to SBII will be at a price equal to 80% of the Market Price of our common stock. The table below illustrates an issuance of shares of common stock to SBII under the 2015 Equity Line of Credit for a hypothetical draw down amount of $25,000 at an assumed Market Price of $0.15.


Draw Down Amount

Price to be Paid by SBII

Number of Shares to be Issued

$25,000

$0.12

208,333


By comparison, if the Market Price of our common stock was $0.10, the number of shares that we would be required to issue in order to have the same draw down amount of $25,000 would be greater, as shown by the following table:


Draw Down Amount

Price to be Paid by SBII

Number of Shares to be Issued

$25,000

$0.08

312,500


Accordingly, there would be dilution of an additional 104,167 shares issued due to the lower stock price of $0.10 per share. In effect, if we are interested in receiving a fixed funding amount, a lower price per share of our common stock means a higher number of shares to be issued to SBII in order to receive that fixed funding amount, which equates to greater dilution of existing stockholders. The effect of this dilution may, in turn, cause the price of our common stock to decrease further, both because of the downward pressure on the stock price that would be caused by a large number of sales of our shares into the public market by SBII, and because our existing stockholders may disagree with a decision to sell shares to SBII at a time when our stock price is low, and may in response decide to sell additional numbers of shares, further decreasing our stock price.


The actual number of shares that will be issued to SBII under the 2015 Equity Line will depend upon the market price of our common stock at the time of our Draw Down Notices to SBII.


Likelihood of Accessing the Full Amount of the 2015 Equity Line


Notwithstanding that the 2015 Equity Line is in an amount of $2,000,000, the likelihood that we would access the full $2,000,000 is low. This is due to several factors including the fact that the 2015 Equity Line's share volume limitations will limit our use of the 2015 Equity Line and the market price may increase and thus fewer shares will need to be issued.


We determined to register in this registration statement a total of 10,000,000 shares, which represent less than one- third of our public float (after subtracting the holdings of insiders and controlling shareholders) in order to allow the greatest possible flexibility under the 2015 Equity Line.  The amount of shares that might be utilized under the 2015 Equity Line cannot be determined at this time as it will fluctuate with the market price of our stock and our financial requirements.


ITEM 7. SELLING STOCKHOLDER


The shares to be offered by the selling stockholder were or will be issued in private placement transactions by us, each of which was exempt from the registration requirements of the Securities Act. The shares offered hereby are "restricted" securities under applicable federal and state securities laws and are being registered under the Securities Act, to give the selling security holder the opportunity to publicly sell these shares. This prospectus is part of a registration statement on Form S-1 filed by us with the Securities and Exchange Commission under the Securities Act covering the resale of such shares of our common stock from time to time by the selling stockholder. No estimate can be given as to the amount or percentage of our common stock that will be held by the selling stockholder after any sales made pursuant to this prospectus because the selling stockholder is not required to sell any of the shares being registered under this prospectus. The following table assumes that the selling stockholder will sell all of the shares listed in this prospectus.



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The following table sets forth the name of each person who is offering for resale, shares of common stock covered by this prospectus, the beneficial ownership of each selling stockholder, the number of shares of common stock that may be sold in this offering and the number of shares of common stock each will own after the offering, assuming they sell all of the shares offered. The term "selling stockholder" includes the stockholder listed below. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. There are no shares of common stock subject to options, warrants and convertible securities.


 

Shares Beneficially Owned Prior to the Offering (1)

Total

Shares

Registered

Shares Beneficially Owned After the Offering (2)

Shareholder Name

Number

Percent

Number

Percent

 

 

 

 

 

 

SBI Investments, L.L.C. (3)

500,000 (4)

-0-

10,000,000

-0-

-0-

Total

 

 

 

-0-

-0-


(1)

Applicable percentage ownership is based on 84,486,774 Common Shares outstanding as of October 9, 2015 and on Common Shares owned by the Selling Stockholder as of October 9, 2015 including Common Shares underlying Warrants or other securities owned by the Selling Stockholder as of October 9, 2015 that are exercisable for or convertible into Common Shares within 60 days of October 9, 2015. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Common Shares underlying Warrants or other securities that are currently exercisable or convertible, or exercisable or convertible within 60 days of May 28, 2015 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person.  

(2)

Assumes that all securities will be sold.

(3)

SBII is the investor under the 2015 Equity Line of Credit. All investment decisions for SBII are made by SBII’s President and Managing Member, Mr. Jonathan Juchno. SBII has informed us that it is an “underwriter” within the meaning of the Securities Act, and to the best of our knowledge no other underwriter or person has been engaged to facilitate the sale of shares in this offering.

(4)

SBII as of May 28, 2015, has 500,000 Warrants issued and outstanding in the Company, as follows:

(a)

250,000 Warrants which are exercisable for the purchase price of $0.50 per warrant and are exercisable for 36 months after issuance.

(b)

250,000 Warrants which are exercisable for the purchase price of $1.00 per warrant and are exercisable for 36 months after issuance


The Selling Stockholder may be deemed to be underwriters within the meaning of the Securities Act in connection with any sales covered by this registration statement.


To the Board’s knowledge, neither the Selling Stockholder nor its beneficial owner:


- Has had a material relationship with IFAN or any of its predecessors or affiliates, other than as a

   shareholder as noted above, at any time within the past three years; or

 

- Has ever been one of its officers or directors or an officer or director of its predecessors or affiliates

 

- Are broker-dealers or affiliated with broker-dealers.


The Company’s officers and directors are personally acquainted with its stockholders, and solicited their investment in the private placement. Its officers and directors did not use any finders or brokers in the solicitation of the investors and did not pay any fees or commissions.


ITEM 8. PLAN OF DISTRIBUTION


Shares Offered by the Selling Stockholder



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A Selling Stockholder may, from time to time, sell any or all of their shares on the OTC Markets or any other stock exchange, market or trading facility on which the Common Shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholder may use any one or more of the following methods when selling its shares:


-

ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers;

-

block trades in which a broker-dealer will attempt to sell shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

-

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

-

an exchange distribution in accordance with the rules of the applicable exchange;

-

privately negotiated transactions;

-

broker-dealers may agree with the Selling Stockholder to sell a specified number of such shares at a stipulated price per share;

-

through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

-

a combination of any such methods of sale; or

-

any other method permitted pursuant to applicable law.


A Selling Stockholder may also sell shares under Rule 144 under the Securities Act, if available, rather than under this Prospectus.


Broker-dealers engaged by a Selling Stockholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from a Selling Stockholder (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction, not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.


In connection with the sale of the shares or interests therein, a Selling Stockholder may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of Common Shares in the course of hedging the positions they assume. A Selling Stockholder may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealers or other financial institutions of shares offered by this Prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this Prospectus (as supplemented or amended to reflect such transaction).


SBII is, and any other Selling Stockholder, broker-dealer or agent that is involved in selling the shares may be deemed to be, an “underwriter” within the meaning of the Securities Act in connection with such sales. Any commissions received by SBII or such other Selling Stockholder, broker dealer or agent, and any profit on the sale of the shares purchased by them, may be deemed to be underwriting commissions or discounts under the Securities Act. SBII has informed the Company that in no event shall any broker-dealer receive fees, commissions or markups which, in the aggregate, would exceed eight percent (8%) of the amount of the relevant sale.


The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the shares. The Company has agreed to indemnify the Selling Stockholder against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.


Because SBII is or may be deemed to be an “underwriter” within the meaning of the Securities Act, they will be subject to the Prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any Common Shares covered by this Prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this Prospectus. SBII has informed the Company that there is no underwriter or coordinating broker acting in connection with the proposed sale of the shares by the Selling Stockholder.




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We agreed to keep this Prospectus effective until the earlier of (i) 18 months from an effective registration statement, or (ii) all of the shares have been resold pursuant to this Prospectus or Rule 144 under the Securities Act or any other rule of similar effect. SBII has informed the Company that the shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In certain states, the shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.


Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the shares may not simultaneously engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholder will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of Common Shares by the Selling Stockholder or any other person. We will make copies of this Prospectus available to the Selling Stockholder and have informed them of the need to deliver a copy of this Prospectus to each purchaser of shares at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).


Rule 144


In general, under Rule 144, as currently in effect, a person, other than an affiliate, who has beneficially owned securities for at least six months, including the holding period of prior owners is entitled to sell his or her shares without any volume limitations; an affiliate, however, can sell such number of shares within any three-month period as does not exceed the greater of:


•  1% of the number of shares of common stock then outstanding


Sales under Rule 144 are also subject to manner-of-sale provisions, notice requirements and the availability of current public information about an issuer.  In order to effect a Rule 144 sale of common stock, the transfer agent requires an opinion from legal counsel.  Further, the six month holding period is applicable only to issuers who have been subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 for at least 90 days. Once a market has been developed for the Company’s Common Stock, the shares may be sold or distributed from time to time by the Selling Stockholder directly to one or more purchasers or through brokers or dealers who act solely as agents, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The distribution of the shares may be effected in one or more of the following methods:

 

·

ordinary brokers transactions, which may include long or short sales,

·

transactions involving cross or block trades on any securities or market where the common stock is trading,

·

through direct sales to purchasers or sales effected through agents,

·

through transactions in options, swaps or other derivatives (whether exchange listed or otherwise), or

·

any combination of the foregoing.


Brokers, dealers, or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholder and/or the purchasers of shares for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). Neither the Selling Stockholder nor the Board Directors of the Company can presently estimate the amount of such compensation. It knows of no existing arrangements between the Selling Stockholder and any other stockholder, broker, dealer or agent relating to the sale or distribution of the shares. The Company will not receive any proceeds from the sale of the shares of the Selling Stockholder pursuant to this prospectus. The Company has agreed to bear the expenses of the registration of the shares, including legal and accounting fees.


The Selling Stockholder must comply with the requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 in the offer and sale of their common stock. In particular, during times that the Selling Stockholder may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law.



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State Securities – Blue Sky Laws


Transfer of our Common Stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as "Blue Sky" laws. Absent compliance with such individual state laws, our Common Stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue-sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. Accordingly, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time.

 

We will consider applying for listing in Standard & Poor’s, Corporate Manual., a leading provider of business and financial information on publicly listed companies, which, once published, will provide the IFAN Financial, Inc., with “manual” exemptions in approximately 33 states as indicated in CCH Blue Sky Law Desk Reference at Section 6301 entitled “Standard Manuals Exemptions.” However, we may not be accepted for listing in Standard & Poor’s, Corporate Manual, or similar services designed to obtain manual exemptions if we are considered to be a "shell company" at the time of application.

 

Thirty-three states have what is commonly referred to as a "manual exemption" for secondary trading of securities such as those to be resold by Selling Stockholder under this registration statement. In these states, so long as we obtain and maintain a listing in Standard and Poor's Corporate Manual, or Mergent, Inc., secondary trading of our Common Stock can occur without any filing, review or approval by state regulatory authorities in these states. These states are: Alaska, Arizona, Arkansas, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Texas, Utah, Washington, West Virginia and Wyoming. We cannot secure this listing, and thus this qualification, until after our registration statement is declared effective. If we secure this listing, secondary trading can occur in these states without further action.

 

Because the Company is a “reporting issuer” under Section 12(g) of the Exchange Act, as amended, the Company’s shares of common stock  are “covered securities,” or “federally covered securities” as described in some states’ laws, which means that unless you are an “underwriter” or “dealer,” you will have a “secondary trading” exemption under the laws of most states (and the District of Columbia, Guam, the Virgin Islands and Puerto Rico) to resell the shares of common stock you purchase in this offering. However, four states do impose filing requirements on the Company: Michigan, New Hampshire, Texas and Vermont.


We currently do not intend to and may not be able to qualify securities for resale in other states which require shares to be qualified before they can be resold by our stockholders


Regulation M


Regulation M prohibits certain market activities by persons selling securities in a distribution. To demonstrate their understanding of those restrictions and others, Selling Stockholder will be required, prior to the release of un-legended shares to themselves or any transferee, to represent as follows: that they have delivered a copy of this prospectus, and if they are effecting sales on the Electronic Bulletin Board or inter-dealer quotation system or any electronic network, that neither they nor any affiliates or person acting on their behalf, directly or indirectly, has engaged in any short sale of the Company’s Common Stock; and for a period commencing at least 5 business days before his first sale and ending with the date of his last sale, bid for, purchase, or attempt to induce any person to bid for or purchase the Company’s Common Stock.


ITEM 9. DESCRIPTION OF SECURITIES TO BE REGISTERED


Market Information


Our common stock is not traded on any exchange.  Our common stock is quoted on the OTC Markets under the trading symbol “IFAN”.  We cannot assure you that there will be a market in the future for our common stock.  



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OTC Markets securities are not listed and traded on the floor of an organized national or regional stock exchange.  Instead, OTC Markets securities transactions are conducted through a telephone and computer network connecting dealers.  OTC Markets issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a national or regional stock exchange.


Our common stock is currently quoted on the OTC Markets. Our common stock has been quoted since October 30, 2013, trading under the symbol “IFAN”. Because we are quoted on the OTC Markets, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.


The following table sets forth the high and low bid prices for our Common Stock per quarter as reported by the OTC Markets since September 1, 2013 based on our fiscal year end August 31. These prices represent quotations between dealers without adjustment for retail markup, markdown or commission and may not represent actual transactions.  


Fiscal Year Ended

 

Bid Prices

August 31,

Period

High

Low

2014

First Quarter

N/A

N/A

 

Second Quarter

N/A

N/A

 

Third Quarter

N/A

N/A

 

Fourth Quarter

2.00

1.60

 

 

 

 

2015

First Quarter

0.61

0.10

 

Second Quarter

0.89

0.39

 

Third Quarter

0.325

0.101

 

Fourth Quarter

0.1249

0.601


Common Stock


We are authorized to issue up to 800,000,000 shares of common stock, par value of $0.001 per share, and 10,000,000 shares of preferred stock, par value of $0.001. Each outstanding share of common stock entitles the holder thereof to one vote per share on all matters. Our bylaws provide that any vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board of directors. Stockholders do not have pre-emptive rights to purchase shares in any future issuance of our common stock.


The holders of shares of our common stock are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a dividend and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiary and other holdings and investments. In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to receive, ratably, the net assets available to stockholders after payment of all creditors.


All of the issued and outstanding shares of our common stock are duly authorized, validly issued, fully paid and non-assessable. To the extent that additional shares of our common stock are issued, the relative interests of existing stockholders will be diluted.


Preferred Stock


We are authorized to issue up to 10,000,000 shares of preferred stock, par value of $0.001. We have designated 1,000,000 of our 10,000,000 shares as Series A preferred stock. Each outstanding share of Series A preferred stock includes the right to vote in aggregate, on all shareholder matters equal to 700 votes per share of Series A Preferred Stock and each Series A Preferred Stock share is convertible into shares of our common stock at a conversion rate of 700 shares of common stock for each one (1) share of Series A Preferred Stock.




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Share Purchase Warrants


As of May 19, 2015, the Company has 500,000 Warrants issued and outstanding, as follows:


(a)

250,000 Warrants which are exercisable for the purchase price of $0.50 per warrant and are exercisable for 36 months after issuance.

(b)

250,000 Warrants which are exercisable for the purchase price of $1.00 per warrant and are exercisable for 36 months after issuance.


As promptly as reasonably possible after each exercise of the purchase rights represented by a Warrant, the Company shall deliver to the relevant holder thereof (each, a “Warrant Holder”) a certificate representing the Common Shares so purchased (or such will be electronically delivered to the Warrant Holder if such Warrant is held in electronic form) and, unless such Warrant has been fully exercised, expired or redeemed, a new Warrant Certificate (or such will be electronically delivered to the Warrant Holder if such Warrant is held in electronic form) representing the balance of the Common Shares subject to such Warrant. Warrant Holders do not have any voting or other rights as a stockholder of our Company by virtue of being a Warrant Holder. The person entitled to receive the Common Shares issuable upon any exercise of the purchase rights represented by the Warrants, shall be treated for all purposes as the holder of such Common Shares of record as of the close of business on the date of exercise. The Warrants may be exercised only for whole Common Shares.


The Warrants are transferrable and a Warrant Holder may transfer all or part of the Warrants (but no fractional Warrants) at any time on the books of the Company upon surrender of the Warrant Certificate(s), properly endorsed. Upon such surrender, the Company shall issue and deliver to the transferee a new Warrant Certificate representing the Warrants so transferred (or such will be electronically delivered to the Warrant Holder if such Warrant is held in electronic form). Upon any partial transfer, the Company shall issue and deliver to the Warrant Holder a new Warrant Certificate representing the Warrants not so transferred.


During the period within which the Warrants may be exercised, the Company shall at all times have authorized and reserved for issuance enough Common Shares for the full exercise of the purchase rights represented by the then unexercised Warrants. If the Company dissolves, liquidates or winds up its business before the exercise, expiration or redemption of the Warrants, any Warrant Holder shall be entitled, upon exercising its Warrants, to receive in lieu of the Common Shares receivable upon such exercise, the same kind and amount of assets as would have been issued, distributed or paid to such Warrant Holder upon any such dissolution, liquidation or winding up with respect to such Common Shares, had such Warrant Holder been the holder of record on the record date for the determination of those entitled to receive any such liquidating distribution or, if no record is taken, upon the date of such liquidating distribution. The Company shall pay all issue and other taxes that may be payable in respect of any issue or delivery of Common Shares upon the exercise of Warrants. The Warrants are governed by and shall be construed and enforced in accordance with the laws of the State of Nevada.


Options


We have not issued and do not have outstanding any options to purchase shares of our Common Stock. We do not have any stock option plans.


Convertible Securities


We have not issued and do not have outstanding any securities convertible into shares of our Common Stock or any rights convertible or exchangeable into shares of our Common Stock.


Voting Rights


Directors of the Company are elected at the annual meeting of stockholders by a plurality of the votes cast at the election.  Holders of shares of the Company’s Common Stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in such event, the holders of the remaining shares will not be able to elect any of its directors. Stockholders have no pre-emptive rights.



33




Cash Dividends


As of the date of this prospectus, the Company has not paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of the Board of Directors and will depend upon the earnings of the Company, if any, its capital requirements and financial position, the general economic conditions, and other pertinent conditions.  It is the Company’s present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in its business operations.


ITEM 10. INTERESTS OF NAMED EXPERTS AND COUNSEL


None of the below described experts or counsel have been hired on a contingent basis and none of them will receive a direct or indirect interest in the Company.


The audited financial statements for the year ending August 31, 2014 that have been included in this prospectus have been audited by Kyle L. Tingle, CPA.  Included are the financial statements in reliance on their report, given upon their authority as experts in accounting and auditing.  


The Law Office of Andrew Coldicutt has passed upon the validity of the shares being offered and certain other legal matters and is representing the Company in connection with this offering.


ITEM 11.  INFORMATION WITH RESPECT TO THE REGISTRANT


A. Description of the Business


The Company was incorporated on June 11, 2010, under the laws of the State of Nevada.  The Company is currently a development stage company and, since its formation, it has not realized any revenues from operations. The Company originally intended to develop and distribute an organic clothing line designed for children. All our clothing would be made of only natural materials. The Company now intends to commence operations in the electronic transfer of funds using mobile applications.


Since inception we have worked toward the introduction and development of our website.  We have no revenues, have achieved losses since inception, have been issued a going concern opinion by our auditors and rely upon the sale of our securities to fund operations. 


On April 25, 2014, J. Christopher Mizer (“Mr. Mizer”) acquired control of Seven Million One Hundred Twenty Two Thousand Thirty (7,122,030) shares of common stock of the Company, representing approximately 97.1% of the Company’s total issued and outstanding common stock, from Danielle Joan Borrie (“Ms. Borrie”) in accordance with a Stock Purchase Agreement between Ms. Borrie and Mr. Mizer.


On April 28, 2014, Danielle Joan Borrie resigned as the Company’s Board of Directors and as the Company’s President, Chief Executive Officer, Chief Financial Officer, and Treasurer.


On April 28, 2014, Nopporn Sadmai resigned as the Company’s Secretary.


On April 28, 2014, J. Christopher Mizer was appointed as a member of the Company’s Board of Directors and as the Company’s President, Chief Executive Officer.


On April 28, 2014, Steve Scholl was appointed as a member of the Company’s Board of Directors and as the Company’s Chief Financial Officer, Treasurer, and Secretary.


On May 8, 2014, the Board of Directors of the Company, with the approval of a majority of its shareholders by written consent, approved the issuance of 600,000 shares of Series A Preferred Stock (as defined and described under Item 3.2) (the “Series A Preferred Stock”) to J. Christopher Mizer, and 300,000 shares of Series A Preferred Stock to Steve Scholl (“Preferred Shareholders”) in exchange for J. Christopher Mizer’s cancellation of 6,764,887



34



shares, representing the ownership of approximately 92.2%, of the Company’s Common Stock.  J. Christopher Mizer, retained an ownership of 357,143 shares of common stock in the Company after this cancellation.


On May 8, 2014, the Board of Directors, with the approval of a majority vote of its shareholders approved the filing of a Certificate of Designation establishing the designations, preferences, limitations and relative rights of the Company’s Series A Preferred Stock (the “Designation” and the “Series A Preferred Stock”).  The Board of Directors authorized the issuance of 900,000 shares of Series A Preferred Stock, which the Board agreed to issue to the Preferred Shareholders or its assigns, upon the Company filing the Certificate of Designation with the Nevada Secretary of State. The terms of the Certificate of Designation of the Series A Preferred Stock, which was filed with the State of Nevada on May 8, 2014, include the right to vote in aggregate, on all shareholder matters equal to 700 votes per share of Series A Preferred Stock and each Series A Preferred Stock share is convertible into shares of our common stock at a conversion rate of 700 shares of common stock for each one (1) share of Series A Preferred Stock.


On May 8, 2014, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase its authorized capital to Eight Hundred Ten million shares (810,000,000) of which Eight Hundred Million (800,000,000) shall be shares of Common Stock, par value $0.001 per share, and ten million (10,000,000) shall be shares of Preferred Stock, par value $0.001 per share with one million (1,000,000) of such shares being designated as Series A Preferred Stock. The Increase in Authorized was effective with the Nevada Secretary of State on May 8, 2014, when the Certificate of Amendment was filed. The Increase in Authorized was approved by the Board of Directors and the shareholders holding a majority of the total issued and outstanding shares of common stock on May 8, 2014.


On August 4, 2014, the Directors of the Company, receiving the majority vote of the Company’s Shareholders, approved: (i) a change in the Company name from “Infantly Available, Inc.” to “IFAN Financial, Inc.” and (ii) an 140-for-1 forward stock split of the issued and outstanding shares of common stock of the Company, which shall be payable as a dividend and upon surrender.  On August 5, 2014, the Company filed a Certificate of Amendment with the Secretary of State of Nevada, giving effect to the name change, among other things.


Effective September 3, 2014, in accordance with approval from the Financial Industry Regulatory Authority (“FINRA”), our company changed its name from Infantly Available, Inc. to IFAN Financial, Inc.


On June 6, 2014, the Company signed the share exchange agreement (“Agreement”) with Mobicash America, Inc. D/B/A Quidme, a company incorporated under the laws of the State of California (“Quidme”), and the shareholders of Quidme (the “Selling Stockholders”) pursuant to a share exchange agreement by and among the Company, Quidme and the Selling Stockholders. The Company will acquire 100% of the issued and outstanding securities of Quidme in exchange for the issuance of 43,000,000 shares of IFAN common stock, par value $0.001 per share. The Company will also fund $500,000 over the next six months, to support the continued development and commercialization of Quidme’s technology.  As a result of the Agreement the Selling Stockholders will acquire up to 35% of the Company’s currently issued and outstanding shares of common stock.  Upon completion of the Agreement, Quidme will become the wholly-owned subsidiary and the Company acquired the business and operations of Quidme.  Further, on the closing date of the Agreement, Christopher Menya, shall also be appointed the Chief Technology Officer and as a Director of IFAN and as President of the Quidme operating Subsidiary, and John C. De Puy will be appointed as a Director of Quidme. The Agreement is to be completed contingent on the successful financial audit of Mobicash America, Inc.


On October 3, 2014, we received the audited financials of Mobicash, America, Inc., and we closed the share exchange by acquiring Mobicash America, Inc. and through an amended Share Exchange Agreement (the “Amended Agreement”) we issued the 61,858 shares of Series A preferred stock to the shareholders of Mobicash America, Inc., d/b/a Quidme.  


On April 3, 2015, Christopher Menya resigned as the Company’s Chief Technical Officer and as a Director.


On April 8, 2015, John De Puy was appointed as a member of the Company’s Board of Directors.




35



We have never declared bankruptcy, have never been in receivership, and we have never been involved in any legal action or proceedings. Neither we, nor our officers, directors, promoters or affiliates, have had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements or understandings with, any representatives of the owners of any business or company regarding the possibility of another acquisition or merger.


Since we have a specific business plan, which we have begun to execute, and we have no plan to engage in a merger or acquisition of another entity, we believe that we are not a blank check company described in Rule 419 under the Securities Act of 1933.


We are a development stage company and have not generated any revenue to date. Besides our Officers and Directors we currently have two (2) employees.


As discussed in the Notes to Financial Statements included in this Registration Statement, as of August 31, 2014, we had no revenue and had negative cash flow of approximately $41,798 and net loss of $2,097,212 for the nine months ended May 31, 2015, respectively. These factors raise substantial doubt that we will be able to continue operations as a going concern, and our independent auditors included an explanatory paragraph regarding this uncertainty in their report on our financial statements for the period from June 11, 2010 (commencement of operations) to August 31, 2014. Our ability to continue as a going concern is dependent upon our generating cash flow sufficient to fund operations. Our business strategy may not be successful in addressing these issues. If we cannot continue as a going concern, our stockholders may lose their entire investment in us.


The Company


Business Prior to the Closing of the Share Exchange Agreement


The objective of this corporation was to develop and distribute an organic clothing line designed for children and market these products primarily in the western states of the United States of America. We planned to be our clients’ premier source for designer clothes for infants and toddlers and to provide the right outfit at the right price. We intended to offer the latest fashions from some of the world's top designers. Our plan was to negotiate a commission based on the sales with these designers. We also planned on licensing various clothing designs from designers and find the suitable suppliers and tailors to produce the clothing. There were no arrangements, agreements or understandings with any designer and there was no assurance that we would be able to secure any deal with any top designer.


Our business model was to be based on e-Commerce, using the internet as an expected mean to lower overhead costs. We believed that this was going to be a way to compete against big retail chains.


We were unsuccessful in raising sufficient capital to implement our children’s natural clothing line.  In the winter of 2013, prior management began analyzing the various alternatives available to our company to ensure our survival and to preserve our shareholder's investment in our common shares. In that regard, our management began identifying and evaluating opportunities to acquire significant assets or businesses.


License Agreement


On May 15, 2014, the Company entered into a two (2) year License Agreement (the “License Agreement”) with IPIN Debit Network, Inc., a New Brunswick, Canada corporation (“IPIN”) for the former’s use and distribution of IPIN’s technology, systems and products in the nature of electronic payments processing and its United States Letters Patents. After the two (2) year period, the License Agreement shall be automatically renewable for successive one (1) year periods for an additional ten (10) years provided that IPIN has received a minimum of Five Million ($5,000,000) dollars in Royalty payments for each of the three (3) through twelve (12) successive years from the signing of the License Agreement.


Under the terms of the License Agreement, IPIN grants to the Company and its sub-licensees, for the term of the License Agreement an exclusive, assignable, right and license to make, use, and sell the Intellectual Property in order to develop, implement, process, prepare and sell the Licensed Products using the Intellectual Property in the countries identified in Schedule A (“the United States of America and its territories, The United Mexican States,



36



Japan, and the Republic of South Korea”) that is attached to the License Agreement (“Schedule A”).  IPIN further grants to the Company and its sub-licensees, for the term of the License Agreement a non-exclusive, assignable, right and license to make, use, and sell the Intellectual Property in order to develop, implement, process, prepare and sell the Licensed Products using the Intellectual Property in all other countries which are not identified in Schedule A.


As per the License Agreement, the Company will provide IPIN with the opportunity to bid to provide front-end processing services to the Company, with the terms of providing such merchant processing services being subject to a separate agreement and are not included within the License Agreement.


Payments


Pursuant to the License Agreement, the Company will be required to pay IPIN Two Hundred Fifty Thousand ($250,000) Dollars in the following amounts as per the terms of the License Agreement:


a)

in consideration for the licenses granted hereunder, the Company agrees to pay to IPIN Two Hundred Fifty Thousand United States Dollars ($250,000) (hereinafter the “License Fee”).

b)

the License Fee owed IPIN shall be payable according to the following schedule when IPIN achieves certain benchmarks:

i.

Ten Thousand United States Dollars ($10,000) upon execution of this License Agreement;

ii.

Twenty Thousand United States Dollars ($20,000) when IPIN successfully demonstrates the integration, publishing design, and on-boarding screens of its technology with the Android application package file (apk);

iii.

Twenty Thousand United States Dollars ($20,000) when IPIN successfully integrates the Android app with the IPIN device as demonstrated by transferring the transaction details to the app after a card swipe occurs;

iv.

Sixty Thousand United States Dollars ($60,000) when IPIN successfully demonstrates a card transaction including posting the status to the merchant call back uniform resource locator (url);

v.

Sixty Thousand United States Dollars ($60,000) when IPIN successfully demonstrates a front end data base set up that enables an IPIN device user to affect an IPIN device transaction;

vi.

Sixty Thousand United States Dollars ($60,000) when IPIN successfully demonstrates the completed, back-end development of the IPIN device Android app including any and changes needed to support it; and

vii.

Twenty Thousand United States Dollars ($20,000) when IPIN successfully demonstrates the completed testing and deployment for in house participants applying the IPIN device Android app to the IPIN device for Apple IOS app, including testing and deployment.

c)

all payments due IPIN shall be made in United States currency by check or wire transfer drawn on a United States bank, unless otherwise specified by IPIN;

d)

the License Fee may be offset by the amount of any financial obligations with IPIN has incurred to the Company or any of its affiliates. Such financial obligations are estimated to be Fifty Seven Thousand United States Dollars ($57,000) as of the date hereof;



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e)

the Company agrees to pay to IPIN the royalty recited in Schedule A (hereinafter the “Royalty”) based on the Company’s net sales of licensed products, as follows:

i.

Royalty Rate is Five Percent (5%) of Net Sales;

ii.

The Royalty owed to IPIN shall be calculated on a monthly basis (the “Royalty Period”), and shall be payable no later than forty-five (45) days after the termination of the preceding monthly period;

iii.

For each Royalty Period, the Company shall provide IPIN with a written royalty statement;

iv.

‘Net Sales’ shall mean the Company’s actual cash collections from sales of Licensed Products; and,

v.

All payments due to IPIN shall be made in United States currency.

f)

the Company agrees to issue to IPIN one million (1,000,000) shares of the Company’s restricted common stock, which shall be restricted from trading according to security law rules and regulations.

g)

IPIN agrees to issue to the Company one million (1,000,000) shares of IPIN’s restricted common stock, which shall be restricted from trading according to security law rules and regulations.

h)

no delay or failure of IPIN to meet any of the benchmarks enumerated in the above section b) shall reduce or limit any of the rights conveyed to the Company under section 1 of the License Agreement.

The foregoing summary description of the terms of the License Agreement may not contain all information that is of interest to the reader. For further information regarding the terms and conditions of the License Agreement, this reference is made to such agreement, which was filed on May 21, 2014 with the Securities and Exchange Commission as Exhibit 10.1 to our Current Report on Form 8-K and is incorporated herein by this reference.


Company Overview Subsequent to the Closing of the Share Exchange Agreement


The Company and its wholly owned subsidiaries, iPIN Technologies and Mobicash America, design, develop and distribute software that enhances and enables mobile payments. Based in San Diego the company has a growing portfolio of solutions, including the ability to use a debit card and corresponding PIN number while purchasing online via mobile phone, tablet, or computer and peer-to-peer cash transfers.


Our platform product, the ‘IFAN Platform’, is a unique mobile wallet system that utilizes the text messaging function of a mobile phone, allowing the technology to operate on almost any phone or network, with or without data service. The functionality of the IFAN platform allows users to pay bills, purchase goods and services, and to send money to friends and relatives located locally or internationally via simple text message. All transactions and functions will be centrally located and take place internally through the mobile wallet.


We will additionally develop b2b ‘white label’ online/mobile enterprise solutions allowing for mid to large sized merchants to fully customize their customers’ e-commerce experience. Our enterprise solutions will be available for sale to merchants and will allow for mobile payments which will be processed by us. Merchants will have three solution options based on their business size and customer needs. Every IFAN enterprise solution will come with a payment gateway already embedded. For lower revenue merchants or businesses already possessing an online/mobile solution, we will offer customizable HTML coding available for download from ifanfinancial.com allowing the merchant to integrate our hosted ‘checkout button’ for payment processing through their existing site. Our hosted buttons will be fully customizable and at a significantly lower processing cost to the merchant.


We will continue to explore opportunities to expand our product portfolio to meet the growing demands for consumer/merchant convenience, speed and security within the mobile commerce market. Products in development



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will combine the functionality of social media, e-commerce and banking with the broader conveniences of the mobile environment.


Products and Services


Our Mobile Payment System and Interactive Social Networking photo/video sharing App is a unique solution that does not require subscribers to have existing bank accounts or Social Security Numbers to open accounts. It is a solution for those ignored by the banking industry and for those who are not well served by existing financial institutions.


We will also offer an array of services to enhance the payments industry. Under the role of a private bank, the IFAN Platform will be a unique mobile wallet allowing for consumers to load funds into the platform for web and in-store purchases, peer-to-peer cash transfers and international remittances. Through the IFAN platform consumers will be able to make direct online purchases via their mobile wallet both within the wallet platform on merchant and consumer listed items, as well as externally on merchant online and mobile sites. We are working to eliminate the need for traditional plastic debit and credit cards to be physically carried. The future will be comprised of payments from mobile devices whether scanned off the phone, by Near-Field-Communication (NFC), or by manually entering the card number presented on the screen of the phone. We intend to be on the forefront of this new technology while additionally building a ‘social commerce’ network within the app that combines the best features of Facebook, Craigslist, and Venmo.


In addition we will provide ‘white label’ solutions for merchants seeking to transition to, or add on mobile commerce to their business. The solutions will be fully customized to the merchant’s specifications. We will have the ability to process all transactions made through the solutions and have the merchant receive their funds within 1-2 business days.


We plan to offer merchants the ability to add a ‘checkout button’ onto their existing online or mobile sites to process consumer transactions. We will generate and provide customized HTML code to the merchant’s specifications that can be copied and pasted by merchants into their new or existing online or mobile sites.


Markets


Our IFAN Platform mobile wallet/social network system will be targeted towards individual consumers. This new form of ‘social commerce’ will be aimed at a user base of all ages, with 18 – 35 as the first adopters. Merchants will be targeted to develop their online and mobile commerce businesses using our 1.5% all around processing fees for both enterprise solutions and ‘checkout buttons’. The market is currently suffering from high processing fees averaging 2.9% plus $0.30 per transaction. We seek to capture markets in mobile wallet merchant acceptance, ‘white label’ mobile enterprise solutions, and customized payment codes for integrating a checkout button experience into new and existing online or mobile commerce site.


The “IFAN Platform”


Our innovative technology and approach to the mobile payments industry will addresses key issues within the payment processing industry and will provide superior solutions to traditional payment methods. The IFAN Platform holds key patents, enabling the company to prevent exposure of personal customer data during mobile business transactions. Our instantaneous method of processing transactions eliminates extended payment clearance time which in turn dramatically reduces the cost burdened on merchants. The platform allows cost savings of approximately 55% when compared to traditional money remittance services such as MoneyGram and Western Union. Cheaper, quicker and more secure transactions come as a result of the proprietary debit text payment technology we have developed. No personal data will be given away on any transaction processed through the IFAN Platform.


Unlike competitors, the IFAN Platform will be a completely unhindered mobile-based solution and one that works without data coverage. While others offer fragmented applications, the IFAN Platform will be a pioneer in the mobile payments industry with a comprehensive, innovative solution. The platform will work on any phone or tablet



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allowing for the instant transfer of funds for purchases without releasing sensitive personal or bank account information.


IFAN Platform Target Market


The IFAN Platform mobile wallet targets all individuals with a smartphone and/or tablet, especially benefiting those in the rapidly growing under-banked and un-banked populations. These consumers need cost-effective, convenient, and secure methods to access their money and remittance technology in order to make payments and send cash worldwide. This population comprises roughly 16% of the U.S. population and 2.2 billion consumers globally. It may become an increasing share of the U.S. market, as 45% of the tech-savvy millennial generation now only use debit cards and cash, not credit cards, as their primary source of payment. We hope to capture a large share of this market with the debit friendly IFAN Platform.


IFAN Platform can be used by anyone, but the demographics below constitute our niche:


Millennials (age 18 to 35)

Parents (with college age children)

Immigrants

The Under-banked and the Un-banked

Non Profit Organizations, Churches, Fundraising Drives

Small Businesses Emphasizing Startups


Potential Consumers


Mobile payments and electronic money are rapidly developing and exploding worldwide. The remarkable growth in access to mobile telephony has created the possibility of delivering new financial services by leveraging secure, low-cost mobile networks and platforms. IFAN Platform’s mission is to bring a fundamental innovation in convenience and easy access to banking and payment services to all, especially those not served or under-served by financial institutions.


The IFAN Platform products and services will be designed to appeal primarily to consumers living in households that earn less than $250,000 annually across the following four consumer segments:


Never-banked — households in which no one has ever had a bank account,

Previously-banked — households in which at least one member has previously had a bank account, but no one has one currently,

Underbanked — households in which at least one member currently has a bank account, but that also use non-bank financial service providers to conduct routine transactions like check cashing or bill payment,

Fully-banked — households that primarily rely on traditional financial services.


Customers in these four different segments will tend to purchase and use the IFAN wallet for different reasons and in different ways. For example, never-banked consumers will use the IFAN Platform as a safe, controlled way to spend cash and as a means to access channels of trade, such as online purchases, where cash cannot be used. Previously-banked consumers will use the IFAN wallet as a convenient and affordable substitute for a traditional checking account by depositing payroll checks via direct deposit within the mobile wallet. Those funds can then be used to pay bills and shop online while monitoring spending. Users on the IFAN Platform using the mobile wallet will be able to use their IFAN digital debit card (or issued traditional plastic card) that is linked to their account to make purchases in the same way they would a major label bank card.


The IFAN Platform appeals significantly to the un-banked and underbanked population. According to the Pew Research Center, an estimated 51 million adults reside in under-banked households. The demographics of the un-banked and under-banked range from low skill workers to college students and other younger Americans (the so-



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called Millennials) to individuals who have simply been priced out of the bank accounts by high and rising bank fees. Many of these individuals have smartphones and/or tablets that are compatible with the IFAN mobile wallet. Research indicates that demand for mobile payment solutions will continue to increase. The company’s SMS-based system of transferring funds will revolutionize the way consumers use P2P local and long distance cash transfers.


Underbanked consumers will use the IFAN Platform in ways similar to those of the never- and previously-banked segments, but additionally view the IFAN Platform as a traditional credit card and debit card substitute. For example, underbanked consumers will use the mobile wallet to make purchases at physical and online merchants locations, pay bills, make travel arrangements and guarantee reservations through either their platform account balance which will be essentially a digital IFAN debit card, or if needed, through use of a traditional hard-copy of an IFAN issued debit card.


Fully-banked consumers will use the IFAN Platform as companion product to their bank checking account, segregating funds into separate accounts for a variety of uses. With the ability to store various checking and savings accounts in one central location, users will be able to stay on top of their finances and use IFAN’s additional features to benefit their commercial experiences. For example, fully-banked consumers may use digital IFAN issued debit cards to shop on the Internet without providing their bank debit card account information online. These consumers will likely also use the product to control spending, designate funds for specific uses, prevent overdrafts in their checking accounts, or load funds into specific accounts. As the new mobile wallet platform gains acceptance, IFAN Financial believes that fully-banked consumers will use it in the same way that they their bank checking accounts.


Based on data from the Federal Deposit Insurance Corporation, or FDIC, the Federal Reserve Bank, the U.S. Census, the Center for Financial Services Innovation and our proprietary data, IFAN Financial believes the addressable portions of these four consumer segments collectively represent a market opportunity of approximately 270 million people in the United States for the products and services.


All four categories of the market will be able to benefit from the social media aspect of the platform. As long as the individual has a smartphone or tablet he or she will be able to interact with their peers buying, selling, and chatting all through our IFAN Platform.


As a text based (SMS) system, the IFAN Platform will work with nearly all smartphones and additionally will not require the user to have a data plan. The result is a potential user base in the United States of over 90% of all mobile phone users.


In 2018, Mulpuru estimates that mobile commerce sales will top $293 billion with total e-commerce sales (both online and mobile) in the U.S. expected to grow from $294 billion this year to $414 billion in 2018. The introduction of debit transactions and mobile commerce within the e-payments industry is undeveloped and will thus give birth to numerous opportunities within this new mobile world. In the past, consumers weren’t able to remotely use debit transactions with the security of a PIN present transaction. With our new technology, however, the ability for remote, instant and secure transactions has been developed. Whether it will be a digital IFAN issued card linked to the account balance or an external brand bank card saved within the wallet, the future consumer will now have the ability to make purchases online via IFAN triple encrypted security protections.


Web merchants can currently only receive payments via “card not present” protocols, which results in higher transaction rates and with an increased chance of chargebacks than with being paid by “card present” (walk in retail face to face) transactions. Through the IFAN Platform, web merchants will now be able to receive a same as cash payment by debit card with the customers ‘same-as-cash’ transactions or to be paid by the equivalent of a credit card present payment at a rate lower than industry standards. Our patented technology will allow online retailers to accept mobile commerce payments as if the customer was present in the store. We will actively seek to save businesses money though our IFAN wallet platform.


IFAN Enterprise Solutions


Our innovative white label solutions will allow merchants and businesses to seamlessly integrate mobile payments into their new or existing business. White label solutions will come fully developed and ready for instant customization and use. We will process transactions through the integrated payment gateway that will come with



41



each of the three solutions (Basic, Custom, and Full Enterprise). We plan to process all transactions through the selected enterprise solution and subtract a 1.5% processing fee.


Enterprise Solutions Target Market


Our ‘white label’ solutions will target both developing and established businesses who are seeking to integrate mobile payments into their new or existing business. We will actively seek partnerships with companies to become their online and mobile payment processor. Initially we will primarily seek partnerships with businesses able to finance upfront the cost of integration for the selected ‘white label’ enterprise solution.


IFAN will initially focus on five sectors for mobile payment integration:


1.

Regional Banks/Credit Unions – Needing to facilitate mobile payment services for their customers. This could also include the customer’s account information and other features vital to the businesses mobile application. In the United States this population of businesses is approximately 13,000.


2.

E-Commerce Companies – Looking to implement a mobile application to complement their already existing e-commerce site. The mobile customer experience could include product listings with purchase options as well as other integrated features upon request. Currently this ever-expanding market represents 110,000 English-language e-commerce sites.


3.

Web Developers – Needing to specify payment solutions as part of applications. We plan to be able to integrate a payment solution with all the back-end processing into a developing project. There are currently around 140,000 web development groups who could benefit from our mobile payment capabilities.


4.

Content Providers – Wanting fulfillment of online transactions settlement between traffic aggregates, advertisers, and user distribution. As the need for digital content grows, so will the need for processing the accompanied payments. There are approximately 192 million active content providers with the number growing daily.


Current Partnerships:


GTV – We recently partnered with GTV, a digital media company focused on production and distribution of commercial video content through GTV.com and network O&O sites. We will provide payment services for both online and mobile. We will continue to target similar developing businesses as their exclusive payment processor.


Blue Like Neon – We have recently reached an agreement with Blue Like Neon to have our payment services implemented into their existing services. Blue Like Neon will also work with us to uncover new integration opportunities through their customer base.


Trailer Made – We are working to further develop the partnership with Trailer Made to integrate our payment processing into all their services. Trailer Made is an ‘Airbnb’ style site for motorhomes and mobile trailers.


TCCI – Our partnership with TCCI will dramatically simplify the oversight responsibilities that we have. Instead of having to manage and audit multiple program managers and back offices, we rely on TCCI to carry out these tasks.


According to the World Payments Report non-cash payments are believed to reach 800 billion within the next decade with debit card use growing at a faster rate than credit card use at around 13.5% and 10% respectively. We have the opportunity to capitalize on these trends as a leader in non-cash payment acceptance through the ‘white label’ solutions. Non-cash payments are growing at around 22% a year in developed countries requiring merchants to adapt to the growing demand for online and mobile payment accepting platforms. We have the ability to



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accommodate these needs at a fee significantly lower than the competition. The biggest trend in the non-cash payments sector is the move toward mobile payments over traditional online payments. Customers are becoming more adept at using their smartphones and tablets for making purchases with mobile payments growing at a rate of around 60% a year. IFAN Financial will be ready to meet this growing demand by consumers by building user friendly mobile solutions for merchants that are ready for instant customization and integration.


Our Revenue Model


IFAN Platform


IFAN Platform’s mobile wallet will be able to generate revenue from both consumers and payment receiving merchants. Consumers will be charged a 1.5% loading fee to put funds into the wallet. Funds can then be loaded via debit card or linked to a bank account (ACH). The 1.5% will be of the total dollar amount being loaded and will be paid by the consumer as a fee every time he or she loads money into the platform. The 1.5% will be subtracted from the total amount loaded into the mobile wallet reflecting the reduced amount in the account. No fee will be charged for the storing of an outside credit card, debit card, checking account, or savings account. The 1.5% fee will only occur when funds from one of these sources are transferred, or ‘loaded,’ onto the digital IFAN debit card reflecting the current cash balance of the mobile wallet. Once the funds are loaded into the platform they can be used without any charge to the consumer. The sender and receiver in all peer-to-peer and remittance transfers will also have no additional charges. All funds received via P2P transfer will automatically be added to the digital IFAN debit card reflecting an increase in the accounts cash balance.


Consumers will be able to unload their IFAN Platform funds via the digital IFAN issued debit card by manually entering the card information or by using the e-commerce services and pooling external checkouts into the wallet and completing the transaction. Either way, the consumer will be using the mobile wallets available account balance. All in-store near-field-communication or NFC purchases will be processed directly through the platform and deduct funds from the available balance through the digital IFAN debit card. As the issuing bank, we will collect interchange fees of $0.30 for all merchant transactions.  Merchant transactions will be defined as transactions made through the mobile wallet via the customers digital IFAN debit card and the corresponding account balance or a pre-stored non-IFAN issued card. The interchange fees will be subtracted from the purchase amount being transferred to the acquiring bank. NFC transactions will be treated the same, incurring a $0.30 charge as the payment will originate from the IFAN Platform. Merchants will also be charged 1.5% in an unloading fee for acceptance of the transaction which will also be subtracted from the total prior to transfer to the acquiring bank. This fee will be for the security and convenience of receiving payments through our IFAN Platform.


IFAN Financial Enterprise Solutions


IFAN Financial Enterprise Solutions will generate revenue through the sale of ‘white label’ solutions that allow for online and mobile payment processing. The cost will include full customization and integration of the mobile service:


1.

Basic Solution: $35,000

2.

Custom Solution: $75,000

3.

Full Enterprise Solution: $175,000


We will work to build a database of potential businesses and build strategic relationships to integrate the appropriate enterprise solution.


All solutions will come pre-installed with the IFAN Payment Gateway. The gateway fee will be $0.08 per transaction and will cover all purchases completed through the gateway both online and mobile. Custom and Full Enterprise solutions will have the ability to fully customize the payment gateway with additional appearance themes.


All transactions processed through an IFAN enterprise solution will incur a 1.5% processing fee to be collected from the merchant. Add on features and maintenance fees will be included in all solutions:





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i)

Recurring Monthly Payments: $30/month

ii)

Advanced Fraud Management Filters: $20/month + $0.05 per transaction

iii)

Account Monitoring: $25 set-up + $18/month

iv)

Maintenance & Update Fee: 7% of solution cost


Recurring monthly payments will give the merchant the ability to process customer cards on a recurring basis. This will allow merchants to offer services such as subscriptions and automatic billing to their customers. Our pricing is calculated to be competitive with the industry standard of $30 per month for this ability.


Advanced fraud management filters will screen data such as credit card and addresses information, lists of high-risk indicators, and additional transaction characteristics. This will help protect merchants from attempts of fraudulent transactions by recognizing fraudulent indicators. Businesses that fall prey to fraudulent activity are often burdened with the loss of the fund in the transaction. Once the money has been refunded it is very difficult to recover the value of the lost sale. We intend to help prevent these losses by using algorithmic screening to detect any activity that is deemed suspicious and potentially fraudulent. Our pricing is designed to save merchants money in the long-run while remaining competitive to PayPal and the industry standard which charges $20/month +$0.05 per transaction.


Our account monitoring will provide premium protection against unauthorized use of merchants account. This will include transaction monitoring by trained security professionals who will work to identify fraudulent account activity prior to settlement and use proactive notifications to the merchant of all suspicious account events. All businesses will have a call-in number to a security representative to discuss suspicious account activity, and are entitled to a complete investigation with in-depth research of suspicious account events. Security representatives will use the information gathered through the advanced fraud management filters to help prevent fraud and save merchants money. Account monitoring coupled with the advanced fraud management filters have the potential to significantly reduce transactional fraud for any merchants using an IFAN enterprise solution.


All three solutions will incur a 7% annual fee calculated from the solution cost for system maintenance and updates. This will include all customer support and fixes to software issues. All updates and improvements to the existing software will be pushed out to merchants and included in the 7% annual fee. The annual cost to the consumer breaks down to the following:


1.

Basic Solution:$2,450

2.

Custom Solution: $5,250

3.

Full Enterprise: $12,250


Checkout Button


Our checkout buttons will be free to download and customize from our website. We will collect a fee of 1.5% of the transaction value of all purchases made through our hosted checkout button. Fees will be collected from the value sent to the merchant upon completion of the purchase. Merchants will receive payment minus the 1.5% to their register account.


This value will be of significant savings to merchants in the target market compared to competitors such as PayPal which charge 2.9% of the transaction plus a $0.30 per transaction. Merchants of this caliber will be looking to maximize their revenue potential and we will have a solution for them with immediate payment integration available at a lower cost.


Once processed through our hosted site the merchant’s funds will be deposited via the registered method, either through an IFAN Platform account or registered and verified email linked account with us prior to downloading


Products and Technology


IFAN Platform


Keeping pace with the evolution of payments, We intend to provide consumers with a central location to store all their credit, debit, and loyalty cards within the secure IFAN mobile wallet on their phone or tablet. Taking the



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process a step further and distinguishing the IFAN mobile wallet from competition will be the ability to use the mobile wallet platform as a function of daily life. As a ‘social commerce’ platform, defined as combining the best aspects of social media and online shopping, we will be able to centralize the consumers life eliminating the need for multiple phone/tablet applications to perform daily functions.


Our new method of online selling through the mobile wallet using stored cards enables card users to make transactions and cash transfers via mobile phone, tablet, or computer without providing the merchant their confidential card information.


Identity theft and card fraud is a growing problem globally. Every year around 50 million Americans have their identity’s stolen with a combined $50 billion in resulting damages. In accordance with identity theft, U.S. citizens loose approximately a combined $12 billion annually to credit and debit card fraud. Most stolen information occurs at the point of sale and every time a customer’s enters his or her personal information into the internet to make a purchase there is always a risk of fraud. IFAN Financial has a solution to this problem with the development of the IFAN platform processing system through the mobile wallet. We will store card information and create an electronic copy of the card stored behind triple encrypted security. The mobile wallet itself will require a security pin code for access which will be created by the user. This is much more secure than the traditional method of carrying cards in a physical wallet or purse. If the phone or tablet is lost or stolen we will have procedures to protect the information stored within the device and even removing all personal content.


Keeping current with the rapid development of online purchasing and social media, Our mobile wallet platform product utilizes the text messaging function of a mobile phone allowing the technology to operate on almost any phone or network, with or without data service to develop the first full ‘social commerce’ experience. No longer will be the days of Wi-Fi hunting just to send an in-app message or make a purchase.


The functionality of the IFAN platform will allow users to complete a wide array of functions all directly through the platform wallet. We will assume the role of a private bank and social media outlet allowing users to pay bills, to purchase goods and services, send money to friends and relatives locally or internationally and socially interact with their peers within the platform.


The IFAN Platform will be comprehensive in that it will integrate with and incorporate the best functionality of Facebook, e-Bay, Craigslist, Instagram, Venmo, Amazon, PayPal, Western Union and other progressive leaders. Termed “social commerce,” we will build a powerful and revolutionary platform to foster safe, secure, and simple social commerce for the benefit of both consumers and merchants. We currently have three patents pending that will help the company to secure a position of leadership and innovation in this rapidly expanding industry.


Once past the initial security pin, IFAN platform users will have the ability to load funds into the wallet. This will be facilitated by either Automated-Clearing-House (ACH) where the users links the platform wirelessly to his or her bank account or by transferring in funds from a credit or debit card by entering in the card information for a single transfer or saving the information within the wallet for repeat transfers. Consumers will have the ability to use the cash balance within the wallet as well as digitally stored cards within the platform to participate in the mobile commerce aspect of our “social commerce” experience. The social aspect of the platform will revolve around peer-to-peer selling of goods and the ability to share and connect online. Additionally funds can be accrued from the delivery of incoming peer-to-peer cash transfers either locally or internationally.


A. Remittance


The IFAN Platform will provide users with the ability to transfer money peer-to-peer both within the United States and internationally through the IFAN wallet. The platform is approved for all Apple iPhones and tablets as well as most Android devices. The platform will offer easy peer-to-peer transfers, as well as online payments between anyone with a telephone number and text capability in a secure environment. Money transfers will be facilitated via short-message-service (SMS). Traditionally a peer-to-peer (P2P) transfer or long distance remittance can only occur on mobile devices between two individuals with internet connection, we will bypass this hindrance and allow for funds to be transferred by anyone with a mobile device even when no internet is available.





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B. Card Operations


We plan to assume the role of a private bank through the IFAN Platform. As an electronic card-issuing bank, consumers will be able to make purchases via credit and debit cards stored within the wallet. We will generate a digital IFAN issued debit card within the wallet that can be used for purchase including NFC, online/mobile, scanned, or manually entered at brick-and-mortar stores. Hard copy IFAN issued (plastic traditional) cards will also be made available upon request and directly linked to the platform and allow for purchases using the account balance from the consumers mobile wallet. We believe that the use of the consumers in-wallet ‘cash balance’ and IFAN issued debit cards will be primary methods by users unload funds from the platform for activities such as in-store purchases. Consumers will want to spend the funds within the platform and will have the ability to make purchases at stores and online directly through the wallet. In addition, all funds received by P2P or international remittance will be registered within the wallet under the receivers account balance and available for use through a digital or hard-copy IFAN issued debit card.


C. E-Commerce


The IFAN Platform will facilitate both internal and external consumer purchases online through the wallet. The platform, as a mobile wallet will be available to consumers as a purchasing method both online and via near-field-communication (NFC) terminals. In addition, consumers will be able to pool online purchases within the wallet from separate web-based locations and process a single checkout internally in the platform via our secure wallet.  Users will have the option to pay using IFAN the same way that they are currently available to pay using PayPal and other similar services. Consumers will be able to use their wallet cash balance or digitally stored cards to complete purchases. For these transactions no personal information will be shared with the merchant. We will provide only the funds to the merchant as a method of protecting the customer from potential card fraud. In accordance with our social commerce, consumers and retail merchants will also be able to list products for sale and sell them directly within the mobile wallet. This feature will resemble a better developed ‘Craigslist type’ service whereas items can be listed in the wallet under the ‘shop’ section. Users will be able to search for peer and merchant listed items via direct search, by browsing categories, or by local searches to see what is available within their determined vicinity. Purchases of both peer and merchant items will be completed through the IFAN Platform and funds will be transferred to the sellers account at the close of the sale.


In recent years P2P selling has had many issues and dangers associated with it including robbery and card fraud. We seek to greatly reduce these risks by transferring funds of an agreed purchase into a digital escrow account until the purchasing party inspects the good and agrees to complete the purchase. The transaction will take place between both users mobile wallets. This will eliminate cash transactions where the purchaser is at risk of robbery as well as eliminating card transactions where the purchaser could be subject to fraudulent card transactions. We will be able to keep a record of transactions to prevent crimes being solicited or completed through the company’s platform. In addition all platform users will have a detailed transaction history for viewing within the wallet.


IFAN Enterprise Solutions


We will provide fully developed ‘white label’ solutions for sale to merchants and consumers to customize and facilitate mobile payments.


Mobile commerce is continually becoming a primary method for business transactions. We intend to become a leader in this evolutionary process by designing and developing customizable ‘white label’ mobile commerce solutions for businesses. These white label solutions will be fully developed and coded for specific industry targets. Businesses from many different industries will have the ability to take these ‘white label’ solutions and customize the appearance and basic functionalities to meet their customers’ needs. All solutions will be ‘powered by IFAN’ and all transactions will be processed through IFAN with assistance of our back-office affiliates.


Three types of white label solutions will be available. Each representing a different size of business and their respective needs. The three types of solutions are as follows:



46




A. Basic Solution

Under 6000 SKU’s

SSL Set Up

Install the Latest basic IFAN Enterprise Edition

Product and Category Setup and Configuration

Integrate/Install a chosen Theme into the latest stable version of IFAN Enterprise

No Integration with Back Office Systems

Simple Design Implementation

Integrate Payment Processor such as IFAN, Authorize.net and alternative payment methods from PayPal, Amazon, Google etc.

Set up Transactional Emails with Logo

Basic Shipping & Tax Configuration Set Up

Inventory System or POS Integration

Testing, Internal quality assurance (QA) to ensure cross-browser compatibility and functioning of all feature


B. Custom Solution

More than 6000 SKU’s

Different Pricing for Wholesale, Partners, and Retail Customers

SEO Starter Package or SEO Advanced Package

One Page Checkout with address Validation at Checkout

Inventory System or POS Integration

Advanced Reviews, Auto-Complete Search, Gift Registry

Multilingual Store Front

WordPress Blog Integration, Social Media Sharing Option, Facebook Login

Advanced 301 Redirects

Connection With Back office Accounting Systems, Sales Force, Rewards Program, and Other Affiliate Marketing Systems

Custom Home Page Design, Check Out Page, Custom Banner/Graphics, Product Landing Page etc

Testing/ QA and Data Migration

Code Documentation/ Warranty and Support

Advanced Shipping Configuration


C.

Full Enterprise Solution

Includes all features included in the Custom IFAN Solution in addition to:

Mobile Commerce

Free Professional Customer Support

Multiple Stores

Built in Modules

Full Page Caching

Large Amount of SKU’s

Private Sales, Wholesale, Gift Registries, and Custom Coupons

Hosted By IFAN

Search Engine Optimization

Customer Segmentation

Targeted Promotions & Merchandising

Return Management Authorization



Checkout Button


To accommodate smaller level businesses or those already possessing online or mobile solutions, we will offer merchants the ability to place a ‘checkout button’ on their online and/or mobile sites to allow for customers to purchase their products or services via clicking on the button. We will host and process transactions externally from the merchant site and redirect the customer back upon the completion of the transaction.


Purchase details will include the item of sales name and price. We will be able to generate code which will be copied into the coding on the merchant’s site. Moderate customization will be available including descriptions and color themes. Merchant payments will be received via an IFAN Platform account whereas payments can be directly deposited into the merchant’s company or personal mobile wallet or by an account set up through us whereas the payments will be received via email. Merchants will have the ability to control their customer’s checkout experience at affordable pricing.



47




For the checkout process on the user end, buyers will load their item(s) into the merchants digital shopping cart and proceed with checkout by clicking on our ‘buy button’. From there he or she will enter their billing information and their contact information – email address and phone number – so that we can process their purchase send them their transaction receipts and can contact them if necessary to complete the transaction. Prior to purchase completion the customer will have the ability to review their order to ensure all products and prices are correct. Upon verification the customer will proceed with the purchase. Upon completion of the transaction the customer will be directed back to the merchant site.


If merchant website gathers information about buyers, the merchant can define the code to pre-populate (prefill) the corresponding billing information fields (targeted at repeat customers.) In this case, the buyers see a collapsed version of the billing information section. For example, if the merchant prefills the billing address, the address information will display on the page without the entry fields. Each prefilled section of information will be followed by a change link to let the buyers modify the information, if necessary. We will display a transaction confirmation page to let buyers confirm the details before they complete their transactions and authorize their payments the same as with the non pre-populated transactions.


We will display a payment confirmation page after buyers pay to let them know that they have completed their transactions and authorized their payments successfully prior to redirection back to the merchant site.


Once the checkout is completed, the buyer will be left on our website. Merchants will have one of the following techniques to enhance the checkout experience so that buyers return to their website:


1)

Return URL – Lets buyers return to a page on the merchant website by clicking a return link or button on the IFAN hosted payment confirmation page

2)

Auto Return – We can return people automatically to a page on the merchants website upon transaction completion.


IFAN will recommend that merchants turn on the Payment-Data-Transfer feature when using the Auto Return method. With Auto Return, We will redirect buyers to the merchant website from our alternative payment confirmation page, which does not allow them to print IFAN produced receipts. Payment-Data-Transfer will provide the transaction information from the merchant to let buyers print receipts from their website.


The Payment-Data-Transfer feature includes information about the completed transaction when the merchant uses the return URL or Auto Return feature to send customers back to their website. They will use the information that Payment-Data-Transfer provides to display a "thank you, print your receipt" page on their website.


Merchants will be required to create an account with us, either through the website (ifanfinancial.com) or register through their IFAN platform account prior to customization and downloading of the checkout button code. If the merchant does not have an IFAN Platform account and wishes to use that method they will be required to create an account prior to proceeding. For accounts created on our website, merchants will need to enter their personal information as well as their bank account information to allow for ACH deposits of the funds associated with their registered email for sales through our hosted checkout button. For accounts registered through the IFAN Platform, funds will be directly added to the merchants account balance within the mobile wallet.


Competition


We operate in highly competitive and rapidly changing markets which have become increasingly competitive. Unlike many companies operating in the prepaid financial services industry, we will provide simple, low-cost and convenient money management solutions to a broad base of U.S. consumers through the combination of our innovative products and services, broad retail distribution and proprietary technology. Consequently, we will compete against a full spectrum of companies across the prepaid financial services industry as well as companies providing traditional banking services. In addition to the direct competitors described below, we will compete for access to retail distribution channels and for the attention of consumers at the retail level.




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There is currently limited direct competition to IFAN’s ubiquitous text messaging money transfer payment system in the United States. However, there is segmented competition for various ancillary services we offer our subscribers.


For already banked customers, there may be competition from existing banks that may offer person-to-person transfers between account holders. Most of these features, however, are app driven and, as such, only work with smart phones that have data plans. Our system is not restricted to any bank, specific geographical location and/or hours of operation. IFAN appeals to customers who travel frequently or work long hours and have few breaks. For the un-banked and under-banked, competition emanates from check cashing facilities and prepaid card providers. However, these are very expensive options and, if lost, prepaid cards may not offer protection against that loss. Competition for money transfer is from established players like Money Gram and Western Union. Our services are significantly more affordable and offer convenience and speed.


Merchant service competition is from other card readers like Square, PayPal, Authorize.net, etc. IFAN’s solution is intended to be less expensive and less burdensome.


Some of the more evident companies in our field include:


·

Ribbon

·

Drync

·

Dwolla

·

Gobank

·

Venmo

·

Delectable

·

Vinted

·

Magento

·

Thredup

·

BigCommerce


Many of our competitors have longer operating histories, better brand recognition and greater financial resources than we do. In order for us to successfully compete in our industry we will need to:


·

establish our products’ competitive advantage with customers;

·

develop a comprehensive marketing system; and

·

increase our financial resources.

However, there can be no assurance that even if we do these things we will be able to compete effectively with the other companies in our industry.


We believe that we will be able to compete effectively in our industry because of a competitive advantage offered by our products.  We believe that the products we are able to offer will be attractive to consumers due to their low cost. We will attempt to inform our potential customers of this competitive advantage through various online marketing techniques and positive word of mouth advertising.


As we are a newly-established company, we face the same problems as other new companies starting up in an industry, such as lack of available funds. Our competitors may be substantially larger and better funded than us, and have significantly longer histories of research, operation and development than us. In addition, they may be able to provide more competitive products than we can and generally be able to respond more quickly to new or emerging technologies and changes in legislation and regulations relating to the industry. Additionally, our competitors may devote greater resources to the development, promotion and sale of their products or services than we do. Increased competition could also result in loss of key personnel, reduced margins or loss of market share, any of which could harm our business.




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Intellectual Property


We will rely on a combination of patent, trademark, licenses, copyright laws and trade secret protection in the United States, as well as confidentiality procedures and contractual provisions, to protect the intellectual property rights related to our products and services.


Provisional Patents


Two provisional patents related to our technology have been filed, Provisional Patent numbers: 61949773 and 61949780.  They provide for the following:


·

Omni-cart or Omni-web checkout – An innovation providing an online shopper purchasing merchandise from several sites the ability to pay for all purchases from one checkout screen by entering his/her phone number; and,

·

Ubiquitous SMS based money transfer - Peer-to-peer money transfer independent of phone type, network carrier or owning a bank account


Government Regulation


Compliance with legal and regulatory requirements is a highly complex and integral part of our day-to-day operations. Our products and services are generally subject to federal, state and local laws and regulations, including:


·

anti-money laundering laws;

·

money transfer and payment instrument licensing regulations;

·

escheatment laws;

·

privacy and information safeguard laws;

·

banking regulations; and

·

consumer protection laws.


These laws are often evolving and sometimes ambiguous or inconsistent, and the extent to which they apply to us is at times unclear. Any failure to comply with applicable law could result in restrictions on our ability to provide our products and services, as well as the imposition of civil fines and criminal penalties and the suspension or revocation of a license or registration required to sell our products and services.


We will have to continually monitor and enhance our compliance program to stay current with the most recent legal and regulatory changes. We will also implement policies and programs and adapt our business practices and strategies to help us comply with current legal standards, as well as with new and changing legal requirements affecting particular services or the conduct of our business generally. These programs include dedicated compliance personnel and training and monitoring programs, as well as support and guidance to our retail distributors and network acceptance members on compliance programs.




50



Anti-Money Laundering Laws


Our products and services are generally subject to federal anti-money laundering laws, including the Bank Secrecy Act, as amended by the USA PATRIOT Act, and similar state laws. On an ongoing basis, these laws require us, among other things, to:


·

report large cash transactions and suspicious activity;

·

screen transactions against the U.S. government’s watch-lists, such as the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control;

·

prevent the processing of transactions to or from certain countries, individuals, nationals and entities;

·

identify the dollar amounts loaded or transferred at any one time or over specified periods of time, which requires the aggregation of information over multiple transactions;

·

gather and, in certain circumstances, report customer information;

·

comply with consumer disclosure requirements; and

·

register or obtain licenses with state and federal agencies in the United States and seek registration of our retail distributors and network acceptance members when necessary.


Anti-money laundering regulations are constantly evolving. We continuously monitor our compliance with anti-money laundering regulations and implement policies and procedures in order to comply with the most current legal requirements. We cannot predict how these future regulations might affect us. Complying with future regulation could be expensive or require us to change the way we operate our business.


Money Transmitter Licensing Regulations


We will be subject to money transmitter licensing regulations. We will have to obtain licenses to operate as a money transmitter in 39 states, Puerto Rico and Washington, D.C. The remaining U.S. jurisdictions either do not currently regulate money transmitters or have rendered a regulatory determination or a legal interpretation that the money services laws of that jurisdiction do not require us to obtain a license in connection with the conduct of our business. As a licensee, we are subject to certain restrictions and requirements, including reporting, net worth and surety bonding requirements and requirements for regulatory approval of controlling stockholders, agent locations and consumer forms and disclosures. We are also subject to inspection by the regulators in the jurisdictions in which we are licensed, many of which conduct regular examinations.


In addition, we must at all times maintain “permissible investments” in an amount equivalent to all “outstanding payment obligations.” The definition and interpretation of outstanding payment obligations may vary by jurisdiction and, in some cases, may include the balances on our card products even though technically, the outstanding payment obligations represented by the balances on our card products are liabilities of the issuing bank. Accordingly, it is possible that some states will require us to maintain permissible investments in an amount equal to the outstanding payment obligations of the bank that issues our cards. The types of securities that are considered “permissible investments” vary from state to state, but generally include cash and cash equivalents, U.S. government securities and other highly rated debt instruments.




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Escheatment Laws


Unclaimed property laws of every U.S. jurisdiction require that we track certain information on our card products and services and that, if customer funds are unclaimed at the end of an applicable statutory abandonment period, the proceeds of the unclaimed property be remitted to the appropriate jurisdiction. We will have to agree with the banks that issue our cards to manage escheatment law compliance with respect to our card products and services and have an ongoing program to comply with those laws. Statutory abandonment periods that will be applicable to our card products and services typically range from three to seven years.


Privacy and Information Safeguard Laws


In the ordinary course of our business, we collect certain types of data, which subjects us to certain privacy and information security laws in the United States, including, for example, the Gramm-Leach-Bliley Act of 1999, or the GLB Act, and other laws or rules designed to regulate consumer information and mitigate identity theft. We are also subject to privacy laws of various states. These state and federal laws impose obligations with respect to the collection, processing, storage, disposal, use and disclosure of personal information, and require that financial institutions have in place policies regarding information privacy and security. In addition, under federal and certain state financial privacy laws, we must provide notice to consumers of our policies and practices for sharing nonpublic information with third parties, provide advance notice of any changes to our policies and, with limited exceptions, give consumers the right to prevent use of their nonpublic personal information and disclosure of it to unaffiliated third parties. Certain state laws may, in some circumstances, require us to notify affected individuals of security breaches of computer databases that contain their personal information. These laws may also require us to notify state law enforcement, regulators or consumer reporting agencies in the event of a data breach, as well as businesses and governmental agencies that own data. In order to comply with the privacy and information safeguard laws, we will have to implement confidentiality/information security standards and procedures in place for our business activities and with network acceptance members and our third-party vendors and service providers. Privacy and information security laws evolve regularly, requiring us to adjust our compliance program on an ongoing basis and presenting compliance challenges.


Consumer Protection Laws


We are subject to state and federal consumer protection laws, including laws prohibiting unfair and deceptive practices, regulating electronic fund transfers and protecting consumer nonpublic information. We believe that we have appropriate procedures in place for compliance with these consumer protection laws, but many issues regarding our service have not yet been addressed by the federal and state agencies charged with interpreting the applicable laws.


In order to permit the direct deposit of federal benefits and other federal funds to our products, we will comply with the requirements of the Electronic Fund Transfer Act of the Federal Reserve Board, or Regulation E, as they relate to payroll cards, including disclosure of the terms of our electronic fund transfer services to consumers prior to their use of the service, 21 days' advance notice of material changes, specific error resolution procedures and timetables, and limits on customer liability for transactions that are not authorized by the consumer.


In June 2011, the Consumer Financial Protection Bureau, or CFPB, issued a notice and request for comment on defining what kinds of companies should be included as “larger participants” for its nonbank supervision program. The CFPB subsequently published its first "larger participant" proposed rule, in February 2012, defining nonbank “larger participants” as entities engaged in consumer debt collection and consumer reporting. The CFPB published final rules regarding “larger participants” engaged in consumer reporting and consumer debt collection in, respectively, July 2012 and October 2012. Although the CFPB did not include prepaid card issuers in these rules, the CFPB may take actions in the future, including other rulemakings that subject us or our products and services to its oversight and regulation.


In May 2012, the CFPB issued an Advanced Notice of Proposed Rulemaking seeking information from the public regarding prepaid cards. Although rules were not published in the Advanced Notice of Proposed Rulemaking, we believe that the CFPB is focused on whether some or all of the provisions of Regulation E should apply to prepaid cards and on the product fees, disclosures and product features of prepaid cards.



52




Payment Networks


In order to provide our products and services, we, as well as the banks that issue our cards, must register with Visa and, as a result, are subject to payment network rules that could subject us to a variety of fines or penalties that may be levied by the payment networks for certain acts or omissions. The banks that issue our cards are specifically registered as “members” of the Visa payment networks. Visa set the standards with which we and the card issuing banks must comply.


Amount Spent on Research and Development the Last Two Fiscal Years


IFAN has not spent any money during each of the last two fiscal years on research and development activities.


Additionally, Quidme has spent from the period of inception (June 11, 2010) until May 31, 2013, $235,972 in research and development and then for the nine months ended May 31, 2014, Quidme has spent an additional $248,487.


Employees


J. Christopher Mizer is an officer and director of the Company who serves on a full-time basis. Steve Scholl is also an officer and director of the Company and works on a full-time basis. Other than our officers and directors we do not have any employees. None of the employees are represented by a labor union for purposes of collective bargaining. The Company considers its relations with the employees to be good.


B. Description of Property


Our principal executive offices are located at 3517 Camino Del Rio South, Suite 407, San Diego, 92108 , which is currently provided free of rent by our Chief Executive Officer. We believe that these offices are adequate for our purposes. We do not own any real property or significant assets. Management believes that this office space will meet our needs for the next 12 months.


C. Legal Proceedings


The Company is not involved in any pending legal proceeding nor is it aware of any pending or threatened litigation against us.


D. Market for Common Equity and Related Stockholder Matters


No public market currently exists for shares of the Company’s Common Stock.  Following completion of this offering, the Company intends to contact an authorized market maker for sponsorship to have its common stock quoted on the Over-the-Counter Bulletin Board or OTC Markets.


Penny Stock Rules


The Securities and Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).


A purchaser is purchasing penny stock which limits the ability to sell the stock. The shares offered by this prospectus constitute penny stock under the Securities and Exchange Act.  The shares will remain penny stocks for the foreseeable future.  The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment.  Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in the Company will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act.  Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.



53




The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document, which:


a.

contains a description of the nature and level of risk in the market for penny stock in both public offerings and secondary trading;

b.

contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the Securities Act of 1934, as amended;

c.

contains a brief, clear, narrative description of a dealer market, including "bid" and "ask"  price for the penny stock and the significance of the spread between the bid and ask price;

d.

contains a toll-free telephone number for inquiries on disciplinary actions;

e.

defines significant terms in the disclosure document or in the conduct of trading penny stocks; and

f.

contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;


The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:


1)

the bid and offer quotations for the penny stock;

2)

the compensation of the broker-dealer and its salesperson in the transaction;

3)

the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

4)

monthly account statements showing the market value of each penny stock held in the customer's  account.


In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.  These disclosure requirements will have the effect of reducing the trading activity in the secondary market for the Company’s stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.


Holders of The Company’s Common Stock


As of the date of this Prospectus, the Company has approximately Twenty-One (21) stockholders of record.


Reports


Upon the effectiveness of the Registration Statement of which this Prospectus is a part, the Company will be subject to certain reporting requirements and will file with the SEC annual reports including annual financial statements, certified by the Company’s independent accountants, and un-audited quarterly financial statements in its quarterly reports filed electronically with the SEC. All reports and information filed by the Company can be found at the SEC website, www.sec.gov.


Stock Transfer Agent


The Company does not have a Stock Transfer Agent as of this filing, but will appoint one in the near future.


E.  Financial Statements


The Company's financial statements are below on page F-1. 


F.  Selected Financial Data


Working Capital



54






 

August 31,

2014

$

August 31,

2013

$

Total Assets

281,141

1,355

Total Liabilities

310,708

30,936

Working Capital (Deficit)

(29,567)

(29,581)



Cash Flows


 

Year Ended  August 31, 2014 $

Year Ended  August 31, 2013 $

Cash Flows from (used in) Operating Activities

(92,493)

(9,885)

Cash Flows from (used in) Investing Activities

(60,000)

-

Cash Flows from (used in) Financing Activities

151,138

11,050

Net Increase (decrease) in Cash During Period

(1,355)

1,165



G.  Supplementary Financial Information


Included with the Financial Statements beginning on Page F-1 below.


H. Management's Discussion and Analysis or Plan of Operation


THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ TOGETHER WITH THE FINANCIAL STATEMENTS OF IFAN FINANCIAL, INC., AND THE NOTES TO FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REGISTRATION STATEMENT ON FORM S-1.


RESULTS OF OPERATIONS


Results for the Quarter Ended May 31, 2015 Compared to the Quarter Ended May 31, 2014


Revenues:


The Company’s revenues were $0 for the quarter ended May 31, 2015 compared to $0 in 2014.  


Expenses :


General and administrative expenses for the quarters ended May 31, 2015 and 2014 were $574,577 and $27,328, respectively. General and administrative expenses consisted primarily of stock-based compensation, consulting fees, professional fees, management fees, office expenses and preparing reports and SEC filings relating to being a public company. The increase was primarily attributable to an increase in marketing consulting due to increased corporate activity as a result of the acquisition of Mobicash and stock-based compensation.  The Company incurred $11,284 and $0 of research and development expense during the three months ended May 31, 2015 and 2014, respectively. During the three months ended May 31, 2015, the Company recorded license fee amortization of $7,000 and $0, respectively.


Net Loss:


Net loss for the quarter ended May 31, 2015 was $595,627 compared with a net loss of $26,328 for the quarter ended February 28, 2014.  The increased net loss is largely due to cost related to share-based compensation and license fee amortization.


Results for the Nine Months Ended May 31, 2015 Compared to the Nine Months Ended May 31, 2014


Revenues:



55




The Company’s revenues were $0 for the nine month ended May 31, 2015 compared to $0 in 2014.  


Expenses :


General and administrative expenses for the nine months ended May 31, 2015 and 2014, were $1,721,224 and $37,534, respectively. General and administrative expenses consisted primarily of stock-based compensation, consulting fees, professional fees, management fees, office expenses and preparing reports and SEC filings relating to being a public company. The increase was primarily attributable to an increase in marketing consulting due to increased corporate activity as a result of the acquisition of Mobicash and stock-based compensation.  The Company incurred $186,701 and $0 of research and development expense during the nine months ended May 31, 2015 and 2014, respectively. The Company recorded an impairment expense on its investment of $164,621 during the nine months ended May 31, 2015.  During the nine months ended May 31, 2015, the Company recorded license fee amortization of $22,000 and $0, respectively.


Net Loss:


Net loss for the nine months ended May 31, 2015, was $2,097,212 compared with a net loss of $36,534 for the nine months ended May 31, 2014.  The increased net loss is largely due to higher stock-based compensation and cost related to debt issuance.


Impact of Inflation


We believe that the rate of inflation has had a negligible effect on our operations.


Liquidity and Capital Resources


Working Capital


 

May 31, 2015

$

August 31, 2014

$

Current Assets

 301,972 

 86,620 

Current Liabilities

 1,192,407 

 310,708 

Working Capital (Deficit)

 (890,435)

 (224,088)


The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. Since its inception, the Company has been funded by related parties through capital investment and borrowing funds.


As of May 31, 2015, total current assets were $301,972.


As of May 31, 2015, total current liabilities were $1,192,407, which consisted of notes payable, accrued expenses and accounts payable, related party payables and common stock payable.  We had negative net working capital of $890,435 as of May 31, 2015.


Cash Flows


 

Nine Months Ended

 

May 31, 2015

May 31, 2014

 

$

$

Cash flows used in operating activities

(423,795)

(95,729)

Cash flows used in investing  activities

(10,000)

(10,000)

Cash Flows from (used in) financing  activities

689,147 

104,374 

Net increase (decrease) in cash during period

255,352 

(1,355)





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Cashflows from Operating Activities


During the nine months ended May 31, 2015, cash used in operating activities was $423,795 compared to $95,729 for the nine months ended May 31, 2014.  The increase in the amounts of cash used for operating activities was primarily due a higher loss incurred by the Company.  


Cashflows from Investing Activities


During the nine months ended May 31, 2015 cash used in investing activities was $10,000 compared to $10,000 for the nine months ended May 31, 2014.


Cashflows from Financing Activities


During the nine months ended May 31, 2015, cash provided by financing activities was $689,147 compared to $104,374 for the nine months ended May 31, 2014.  The increase in cash provided by financing activities is due to receiving proceeds for the sale of common stock and the third party borrowing.


Quarterly Events


On April 3, 2015, the Company terminated the private placement agreement with the accredited investor due to a lack of performance. The Company worked diligently with the investor to try and find a solution but ultimately the investor was no longer able to provide the funds as agreed to. The investor ended up funding the Company $250,000 out of the total of $1,000,000. As per the terms of the private placement there are no penalties against the Company for the termination of private placement agreement.


Termination of the private placement means that the accredited investor will no longer have the option to purchase the remaining 2,777,777 shares of stock at $0.27 per share.


On April 3, 2015, the Company accepted the resignation of Mr. Christopher Menya, from his positions as Chief Technical Officer and as a Director with the Company. Mr. Menya has indicated that he may still consider a consulting role with the Company in the future. In recognition of his service Mr. Menya will keep his Preferred Shares in the Company and the Company will compensate him for his time spent with the Company. In his letter of resignation, Mr. Menya, stated that his resignation was due to his interest in pursuing other business opportunities.


On April 8, 2015, the Board of Directors of the Company appointed Mr. John De Puy as a Director of the Company.


The following sets forth biographical information for Mr. John De Puy is set forth below:

 

John De Puy, Age 83 , Since 1993, Mr. De Puy has been the founder and President of OakTree Ventures, a financial services firm that specializes in capital formation. Mr. De Puy’s business background includes more than 25 years as an entrepreneur, CEO, management consultant and civic leader. He has been instrumental in investing in and advising more than 600 technology companies.  John has also authored three books on aspects of entrepreneurial leadership.  John completed the advanced management program at the Wharton School of Business at the University of Pennsylvania.  He is a member Wharton Alumni Club, Los Angeles Ventures Association, Southern California Software Council, San Diego Software and Internet Council, and Association for Corporate Growth.  He has also served as President and Chairman of the Board of USA Volleyball and is listed in Who’s Who in Leading Americans .  As a Director of IFAN, he will advise the Company on capital formation and marketing strategy. Due to Mr. De Puy’s strong background in management and entrepreneurial ventures, we are excited to add his talents to our Company.




57



Secured Promissory Note Agreement


On May 28, 2015, the Company and SBI Investments, LLC (“SBII”), completed a financing transaction that consisted of a Securities Purchase Agreement (the “SPA”), Two Secured Promissory Notes (the “Notes”), Stock Pledge Agreement (the “Pledge”), and Warrant Agreement, pursuant to which SBII has agreed to loan to the Company an aggregate of $550,000. The first note for $275,000 was issued by the Company on May 28, 2015 pursuant to the SPA and is due and payable on May 14, 2016 and accrues interest at 10% per annum payable at three, six and nine months from the issuance date. The second note will be issued upon the filing of a Form S-1 Registration Statement, pursuant to the SPA, and is due and payable on the one year anniversary of the filing date of the Form S-1 Registration Statement, and accrues interest at 10% per annum payable at three, six and nine months from the issuance date. Pursuant to the Pledge, the Company’s CEO and CFO pledged 11,000,000 shares of their restricted common stock to guarantee payment of the Notes issued pursuant to the SPA.  


In connection with the issuance of the $275,000 note payable, the Company received cash proceeds of $235,000 and recorded a debt discount of $40,000 for the difference between the face value of the note and the cash proceeds.  The Company also issued the lender 250,000 warrants in connection with the issuance of this debt with an exercise price of $0.50 and a term of 3 years. The Company determined the relative fair value of the warrants as of their issuance date using the following inputs; 3-year term; 152% volatility; 1% risk free rate; $0 dividends and determined the fair value was $19,523, which the Company recorded as debt discount.  The Company will issue the lender an additional 250,000 warrants with a 3 year life and a $1.00 exercise price upon the issuance of the second note


Equity Line Agreement and Registration Rights Agreement with SBI Investments, LLC.


Completed on May 28, 2015, effective as of May 14, 2015, the Company has entered into a second Securities Purchase Agreement (the “Equity Line Agreement”) with SBII, pursuant to which the Company may issue and sell to SBII Two Million Dollars ($2,000,000) of the Company’s registered common stock (the “Shares”). The parties also entered into a Registration Rights Agreement dated May 14, 2015, whereby the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended (the “Securities Act”), and applicable state laws (the “Registration Agreement”, and together with the Equity Line Agreement, the “Agreements”). Pursuant to the Agreements, the Company shall register the Shares pursuant to a registration statement on Form S-1 (or on such other form as is available to the Company within 60 days of the execution of the Agreements) (the “Registration Statement”). In addition, the Company agreed to use its best efforts to cause such registration statement to be declared effective within one hundred eighty (180) days after the initial filing with the Securities Exchange Commission (“SEC”).  Pursuant to the terms of the agreements, the Company shall reserve a sufficient number of shares of the Company’s common stock for the purpose of enabling the Company to issue Shares pursuant to the Agreements.


Subject to the terms and conditions of the Equity Line Agreement, the Company, at its sole and exclusive option, may issue and sell to SBII, and SBII shall purchase from the Company, the Shares upon the Company’s delivery of written notices to SBII.  The aggregate maximum amount of all purchases that SBII shall be obligated to make under the Equity Line Agreement shall not exceed $2,000,000.  Once a written notice is received by SBII, it shall not be terminated, withdrawn or otherwise revoked by the Company.


The amount for each purchase of the Shares as designated by the Company in the applicable draw down notices shall be equal to the lesser of (i) $25,000 or, (ii) two hundred percent (200%) of the average daily volume of the Company’s common stock based on the trailing ten (10) trading days preceding the first day of the draw down notice period delivery by the Company to SBII,  and that the draw down amount requested will not cause the aggregate holdings of SBII shares of common stock of the Company to be greater than 4.99% of the issued and outstanding shares of common stock of the Company.


The purchase price for the Shares to be paid by SBII shall be eighty percent (80%) of the average of the three (3) lowest closing daily prices of the Company’s common stock during the five (5) consecutive trading days prior to the date of the Draw Down Notice from the Company to SBII or eighty five percent (85%) of the price on the fifth trading day of the Draw Down Pricing Period. During such five (5) consecutive trading day period, the Company shall not subdivide or combine its common stock, or pay a common stock dividend or make any other purchase of its common stock.



58




During the term of the Equity Line Agreement (18 months unless sooner terminated), the Company shall not enter into any purchase or sale of future priced securities of any type whatsoever that are, or may become, convertible or exchangeable into shares of its common stock pursuant to any equity line financing registered with the SEC on a Form S-1.


Also, during such term, the Company shall not enter into, amend, modify, or permit any transaction or arrangement with any of its officers, directors, persons who were officers or directors at any time during the previous two years, shareholders (and any of their family members) who beneficially own 5% or more of the common stock, or affiliates, except for (i) customary employment arrangements and benefit programs on reasonable terms, (ii) any arms-length agreement or transaction on terms no less favorable than terms which would have been obtainable from a disinterested third party, or (iii) any transaction or arrangement approved by a majority of the disinterested directors of the Company.


These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.


For all the terms and provisions of the Secured Promissory Note, Stock Pledge Agreement, Warrant Agreement, Equity Line of Credit, and Registration Rights Agreement, reference is hereby made to such documents that were filed with the SEC on June 2, 2015, as part of our Current Report on Form 8-K. All statements made herein concerning the foregoing are qualified in their entirety by reference to said exhibits.


Going Concern.


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive purchasing of manufacturing equipment and raw materials. For these reasons, the auditors stated in their report on the Company’s audited financial statements that they have substantial doubt that the Company will be able to continue as a going concern without further financing.


The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs for the next fiscal year and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. As of the nine months ending May 31, 2015, the Company has a net loss of $2,097,212, and if the Company is unable to obtain adequate capital, it could be forced to cease operations.


Over the next 12 months, the Company plans to start manufacturing and selling its mobile payment platform and electronic payment related products. Upon securing a contract with companies who want to use our electronic payment systems we will begin receiving revenues; however, the Company cannot estimate the amount of time that it will take for those activities to generate sufficient revenues. In order to continue as a going concern during the next fiscal year, the Company if it does not raise enough funds from this Offering will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.


Future Financings.


We will continue to rely on equity sales of the Company’s common shares in order to continue to fund business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that the Company will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned research and development of our mobile payment platform and electronic payment products.





59



Critical Accounting Policies.


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.


Management regularly evaluates the accounting policies and estimates that are used to prepare the financial statements. A complete summary of these policies is included in Note 2 of the Company’s audited financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Recently Issued Accounting Pronouncements.


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


Off-Balance Sheet Arrangements.


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


I. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.


Changes In Registrant’s Certifying Accountant.


(a)  Dismissal of Independent Registered Public Accounting Firm.


On April 3, 2015, the Company, after review and recommendation by its board of directors, dismissed Kyle L. Tingle, CPA, LLC (“Tingle”) as the Registrant’s independent registered public accounting firm.  The resignation was accepted by the Board of Directors of the Company (the “Board”).


During the two most recent fiscal years and through the date of this report, there were no (1) disagreements with Tingle on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to its satisfaction would have caused Tingle to make reference in its reports on the Company’s financial statements for such years to the subject matter of the disagreement, or (2) “reportable events,” as such term is defined in Item 304(a)(1)(v) of Regulation S-K.


The audit reports of Tingle on the financial statements of the Company, during the periods from August 31, 2011 through April 3, 2015, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except that the reports stated there is substantial doubt about the Company’s ability to continue as a going concern.


The Company has requested that Tingle furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the above statements and, if not, stating the respects in which it does not agree.  When received, a copy of Tingle’s response letter will be filed as an Exhibit to an amendment of this Current Report.


(b)  Engagement of New Independent Registered Public Accounting Firm.




60



On April 3, 2015, the Board of Directors approved the appointment of GBH CPAs, PC as the independent registered public accounting firm of the Company.


During the Company’s two most recent fiscal years and the subsequent interim periods preceding GBH CPAs, PC engagement, neither the Company nor anyone on behalf of the Company consulted with GBH CPAs, PC regarding the application of accounting principles to any specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company’s financial statements, and GBH CPAs, PC did not provide any written or oral advice that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue or any matter that was the subject of a “disagreement” or a “reportable event,” as such terms are defined in Item 304(a)(1) of Regulation S-K.


There have been no disagreements with either independent registered accounting firm on issues of accounting or financial disclosure.


J.  Quantitative and Qualitative Disclosures about Market Risk


None.


K.  Directors, Executive Officers, Promoters and Control Persons


Directors of the Company are elected by the stockholders to a term of one year and serve until their successors are elected and qualified.  Officers of the Company are appointed by the Board of Directors to a term of one year and serve until their successors are duly appointed and qualified, or until the officer is removed from office. The Board of Directors has no nominating, auditing or compensation committees.


The name, address, age and position of the company officer and director is set forth below:



Name and Business Address

Age

Position

Director Since

Mr. J. Christopher Mizer

48

President, CEO,  and Director

April 28, 2014

Mr. Steve Scholl

64

Treasurer, CFO, Secretary and Director

April 28, 2014

John De Puy

83

Director

April 8, 2015



Mr. J. Christopher Mizer and Mr. Steve Scholl, were appointed on April 28, 2014, to their respective office/positions, both are expected to hold said offices/positions until the next annual meeting of the stockholders. Mr. De Puy was appointed on April 8, 2015, as a Director and is expected to hold said position until the next annual meeting of the stockholders. The persons named above are the company’s only officers, directors, promoters and control persons.


Background Information about The Company’s Officers and Directors


Mr. J. Christopher Mizer, age 48: Mr. Mizer founded Vivaris, Ltd. in 1998 and is currently its President and Chief Executive Officer. Mr. Mizer has over 20 years of corporate finance, investment banking and management experience ranging from being an accountant at Ernst and Young to founding Vivaris, Ltd., a company that invests in and acquires middle-market businesses that are leaders in their market niches.  Mr. Mizer is also, a former Vice President and Officer of the investment banking division of Key Corp., where he focused on merger, acquisition, and financing projects for Fortune 500 clients, private companies and successful entrepreneurs. The Board of Directors believes that Mr. Mizer’s financial and accounting knowledge as well as his business acumen would be a valuable asset to the Company.





61



Mr. Steve Scholl, age 64: Mr. Scholl is, currently the Vice-President of Vivaris, Ltd. In 2007, Mr. Scholl founded, and is currently the president of Dr. Horsepower, Inc., a firm that develops marketing and distribution strategies to introduce consumer products to the retail markets. Previously, Mr. Scholl was a Principal of National Schedule Masters, a software and consulting business focused on the land development and construction industries. While with National Schedule Masters, he built a national sales force and operational processes for entitlement and construction strategies for municipal, military and private-sector clients.


Mr. John De Puy, Age 83: Since 1993, Mr. De Puy has been the founder and President of OakTree Ventures, a financial services firm that specializes in capital formation. Mr. De Puy’s business background includes more than 25 years as an entrepreneur, CEO, management consultant and civic leader. He has been instrumental in investing in and advising more than 600 technology companies.  John has also authored three books on aspects of entrepreneurial leadership.  John completed the advanced management program at the Wharton School of Business at the University of Pennsylvania.  He is a member Wharton Alumni Club, Los Angeles Ventures Association, Southern California Software Council, San Diego Software and Internet Council, and Association for Corporate Growth.  He has also served as President and Chairman of the Board of USA Volleyball and is listed in Who’s Who in Leading Americans.  As a Director of IFAN, he will advise the Company on capital formation and marketing strategy. Due to Mr. De Puy’s strong background in management and entrepreneurial ventures, we are excited to add his talents to our Company.


Corporate Governance


The Company does not have a compensation committee and it does not have an audit committee financial expert. It does not have a compensation committee because its Board of Directors consists of only three directors two of which are not independent as they are also an officer.  There is no independent audit committee financial expert because it is believed the cost related to retaining a financial expert at this time is prohibitive due to the current circumstances of the Company. Further, because there are only minimal operations, at the present time, it is believed the services of a financial expert are not warranted.


Conflicts of Interest


The Company does not currently foresee any conflict of interest.


Section 16(a) Beneficial Ownership Reporting Compliance


16(a) of the Securities Exchange Act of 1934 requires the company directors and executive officers, and persons who own more than ten percent of the Company’s Common Stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes of ownership of its common stock. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the company with copies of all Section 16(a) forms they file.  The Company intends to ensure to the best of its ability that all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners are complied with in a timely fashion.


L.  Executive Compensation and Corporate Governance


The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the year ended August 31, 2014, in all capacities for the accounts of our executives, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

 



62



SUMMARY COMPENSATION TABLE


 

 

 

 

 

Stock

Option

All Other

 

 

 

 

Salary

Bonus

Awards

Awards

Compensation

Total

Name and Principal Position

 

Year

($)

($)

($)

($)

($)

($)

J. Christopher Mizer

President, CEO, Director

 

2014

Nil

Nil

Nil

Nil

Nil

Nil

 

2013

Nil

Nil

Nil

Nil

Nil

Nil

Steve Scholl

Treasurer, CFO, Secretary,

Director

 

2014

Nil

Nil

Nil

Nil

Nil

Nil

 

2013

Nil

Nil

Nil

Nil

Nil

Nil

Chris Menya

CTO, Director

 

2014

Nil

Nil

Nil

Nil

Nil

Nil

 

2013

Nil

Nil

Nil

Nil

Nil

Nil

Danielle Joan Borrie,

Former Director, President, and Chief Executive Officer

 

2014

Nil

Nil

Nil

Nil

Nil

Nil

 

2013

Nil

Nil

Nil

Nil

Nil

Nil



Narrative Disclosure to Summary Compensation Table


There are no compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.


Outstanding Equity Awards at Fiscal Year-End


No executive officer received any equity awards, or holds exercisable or unexercisable options, as of the year ended August, 2014.


OPTION AWARDS

 

STOCK AWARDS

Name

 

Number of Securities Underlying Unexercised Options (#) Exercisable

 

 

Number of Securities Underlying Unexercised Options (#) Unexercisable

 

 

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options

(#)

 

 

Option Exercise Price ($)

 

Option Expiration Date

 

Number of Shares or Units of Stock that have not Vested (#)

 

 

Market Value of Shares or Units of Stock that have not Vested

($)

 

 

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested

($)

 

 

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested

($)

(a)

 

(b)

 

 

(c)

 

 

(d)

 

 

(e)

 

(f)

 

(g)

 

 

(h)

 

 

(i)

 

 

(j)

None

 

0

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

0

 

 

0

 

 

0



Long-Term Incentive Plans


There are no arrangements or plans in which the Company would provide pension, retirement or similar benefits for directors or executive officers.





63



Compensation Committee


The Company currently does not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.


Compensation of Directors


Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.


Director Independence


The Board of Directors is currently composed of three members. Mr. J. Christopher Mizer and Mr. Steve Scholl do not qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market, because they are also officers of the Company. Mr. John De Puy, does qualify as an independent director as he is not an officer of the Company. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of the Company’s employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, the board of directors has not made a subjective determination as to each director that no relationships exist which, in the opinion of the board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had the board of directors made these determinations, the board of directors would have reviewed and discussed information provided by the directors and the Company with regard to each director’s business and personal activities and relationships as they may relate to the Company and its management.


Security Holders Recommendations to Board of Directors


The Company welcomes comments and questions from the stockholders. Stockholders can direct communications to the Chief Executive Officer, Mr. J. Christopher Mizer, at our executive offices. However, while the Company appreciates all comments from Stockholders, it may not be able to individually respond to all communications. Management attempts to address stockholder questions and concerns in press releases and documents filed with the SEC so that all stockholders have access to information about the Company at the same time. Mr. J. Christopher Mizer, collects and evaluates all shareholder communications. All communications addressed to the director and executive officer will be reviewed by Mr. J. Christopher Mizer, unless the communication is clearly frivolous.


M. Security Ownership of Certain Beneficial Owners and Management


The following table sets forth certain information at July 13, 2015, with respect to the beneficial ownership of shares of Common Stock by (i) each person known to the Company who owns beneficially more than 5% of the outstanding shares of Common Stock (based upon reports which have been filed and other information known to the Company), (ii) each of the Directors, (iii) each of the Executive Officers and (iv) all of the Executive Officers and Directors as a group. Unless otherwise indicated, each stockholder has sole voting and investment power with respect to the shares shown. As of October 9 , 2015, the Company had 84,486,774 shares of Common Stock issued and outstanding.


Beneficial

Name of

Owner

No. of Shares Before Offering(1)

No. of Shares After Offering(1)

Percentage of Ownership Before Offering (2)

Percentage of Ownership After Offering

Mr. J. Christopher Mizer

455,000,020(3)

455,000,020(3)

60.4%

60.4%

Mr. Steve Scholl

225,000,000(4)

225,000,000(4)

29.7%

29.7%

All Officers and

Directors as a Group

680,000,020

680,000,020

90%

90%



64






(1)

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding.

(2)

Based on 757,787,374 shares issued and outstanding, when fully converted.

(3)

Is based upon the conversion of 600,000 shares of our Series A Preferred Stock.

(4)

Is based upon the conversion of 300,000 shares of our Series A Preferred Stock.


Changes in Control


There are no present arrangements or pledges of the Company’s securities which may result in a change in control of the Company.


Future Sales by Principal Stockholders


A total of 50,000,020 common shares have been issued to the company officers, directors and affiliates and are restricted securities, as that term is defined in Rule 144 of the Rules and Regulations of the SEC promulgated under the Act. Under Rule 144, such shares can be publicly sold, subject to volume restrictions and certain restrictions on the manner of sale, commencing one year after their acquisition. Any sale of these shares (after applicable restrictions expire) may have a depressive effect on the price of the Company’s Common Stock in any market that may develop, of which there can be no assurance.  The principal Stockholders do not have any plans to sell their shares at any time after this offering is complete.


N. Transactions With Related Persons, Promoters And Certain Control Persons


On October 3, 2014, in conjunction with the closing of our share exchange with Mobicash America, Inc., we issued 61,858 shares of Series A preferred stock to acquire up to 43,300,600 shares of our common stock to the Shareholders of Mobicash America, Inc., as follows:


First Name

Last Name

Series A Preferred Shares

Christopher

Menya

45,948

Irene

Kitimbo

9,278

Patrick

Ngabonziza

3,093

Deborah  

Schuch

1,547

Dennis

Bays

1,547

Joseph

Begumisa

306

Brenda

Mukiibi

57

Solomey

Mukiibi

23

Marvin

Muhumuza

16

Alex

Mutebi

16

Erina

Kunobwa

14

Arthur

Ntozi

13

 

 

61,858



65







As of February 28, 2015 and August 31, 2014, the Company has related party notes payable of $226,518 and $146,187, respectively, related to services provided to the Company that are non-interest bearing with no specific repayment terms. As of February 28, 2015, there were loans payable to five officers for $180,708, $6,599, $33,961, $3,250 and $2,000, respectively. As of August 31, 2014, there were loans payable to two officers for $128,554 and $17,633, respectively.   


Our company has not had any other transaction since our last two fiscal years ended August 31, 2014 and 2013, and up until the period ending February 28, 2015, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under “Executive Compensation”).


Other than the foregoing, neither the director nor executive officer of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.


With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manor:

 

·

Disclosing such transactions in reports where required;

·

Disclosing in any and all filings with the SEC, where required;

·

Obtaining disinterested directors consent; and

·

Obtaining shareholder consent where required.



INDEMNIFICATION


Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the By-Laws of the Company, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act, and is, therefore unenforceable.  


In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or other control person in connection with the securities being registered, the Company will, unless in the opinion of legal counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it, is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.


AVAILABLE INFORMATION


The Company has filed a registration statement on Form S-1, of which this prospectus is a part, with the U.S. Securities and Exchange Commission (the “SEC”). We are subject to the informational requirements of the Exchange Act and, in accordance therewith, will file all requisite reports, such as Forms 10-K, 10-Q and 8-K, proxy statements, pursuant to Section 13(a) or 15(d) of the Exchange Act, and other information as required. Such reports, proxy statements, this registration statement and other information, may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street NE, Washington, D.C. 20549. Copies of all materials may be obtained from the Public Reference Section of the SEC’s Washington, D.C. office at prescribed rates.  You may obtain information regarding the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC at http://www.sec.gov. The Company will voluntarily provide electronic or paper copies of its filings with the SEC free of charge upon request.




66





IFAN FINANCIAL, INC.

(A Development Stage Company)

August 31, 2014


INDEX

Report of Independent Registered Public Accounting Firm

F–1


Balance Sheets

F–2


Statements of Operations

F–3


Statements of Stockholders Equity

F–4


Statements of Cash Flows

F–5


Notes to the Financial Statements

F–6





67





Report of Independent Registered Public Accounting Firm



To the Board of Directors

IFAN Financial, Inc.

San Diego, California



We have audited the accompanying balance sheets of IFAN Financial, Inc. as of August 31, 2014 and 2013 and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly,   we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit  also  includes  assessing  the  accounting principles  used  and  significant  estimates  made  by  management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IFAN Financial, Inc. as of August 31, 2014 and 2013 and the results of its operations and cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has limited operations and has no established source of revenue.  This raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





Kyle L. Tingle, CPA, LLC



December 2, 2014

Las Vegas, Nevada




F-1






IFAN Financial, Inc.

F/k/a Infantly Available, Inc.

BALANCE SHEETS

 

 

 

 

 

 

 

 

August 31,

2014

 

August 31,

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash

 

 

 

 

$

$

1,355 

Prepaid expense

 

 

 

 

 

56,620 

 

Advances

 

 

 

 

 

30,000 

 

TOTAL CURRENT ASSETS

 

 

 

 

86,620 

 

1,355 

OTHER ASSETS

 

 

 

 

 

 

 

Investment

 

 

 

 

164,521 

 

Intangible assets

 

 

 

 

30,000 

 

TOTAL OTHER ASSETS

 

 

 

 

194,521 

 

TOTAL ASSETS

 

 

 

$

281,141 

$

1,355 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

$

21,049 

Due to related party

 

 

 

 

146,187 

 

9,887 

Other liability

 

 

 

 

164,521 

 

TOTAL CURRENT LIABILITIES

 

 

 

310,708 

 

30,936 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

Preferred stock, $0.001 par value

 

 

 

 

 

 

Authorized

 

 

 

 

 

 

      10,000,000 shares of preferred stock, $0.001 par value

 

 

 

 

 

 

Issued and outstanding

 

 

 

 

 

 

 

       900,000 shares of preferred stock

 

 

$

900 

$

Common stock, $0.001 par value

 

 

 

 

 

 

Authorized

 

 

 

 

 

 

 

 

      800,000,000 shares of common stock, $0.001 par value,

 

 

 

 

Issued and outstanding

 

 

 

 

 

 

 

      79,960,020 and 1,027,044,200 shares of common stock

 

 

79,960 

 

1,027,044 

Additional paid in capital

 

 

 

(26,576)

 

(1,014,572)

Accumulated deficit

 

 

 

 

 

 

(83,851)

 

(42,053)

TOTAL STOCKHOLDERS' DEFICIT

 

 

 

 

 

$

(29,567)

$

(29,581)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

$

281,141 

$

1,355 

 

 

 

 

 

 

 

 

 

 

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

 




F-2








IFAN Financial, Inc.

F/k/a Infantly Available, Inc.

STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve months

 

Twelve months

 

 

 

 

 

 

 

 

ended

 

ended

 

 

 

 

 

 

 

 

August 31, 2014

 

August 31, 2013

 

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

$

$

 

 

Total revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office and general

 

 

 

 

 

28,973 

 

4,509 

 

 

Professional fees

 

 

 

 

 

13,825 

 

14,700 

 

 

Total expenses

 

 

 

 

 

42,798 

 

19,209 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

1,000 

 

 

 

NET LOSS

 

 

 

 

 

(41,798)

 

(19,209)

 

 

Deemed dividend for beneficial conversion of preferred stock

 

 

 

 

 

(1,750,161)

 

 

 

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

 

 

 

 

$

(1,791,959)

$

(19,209)

 

 

BASIC LOSS PER COMMON SHARE

 

 

 

 

$

(0.00)

$

(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 

 

 

 

 

715,674,059 

 

1,014,944,364 

 

 

DILUTED LOSS PER COMMON SHARE

 

 

 

 

$

(0.00)

$

(0.00)

 

 

WEIGHTED AVERAGE NUMBER OF DILUTED COMMON SHARES OUTSTANDING

 

 

 

 

 

922,797,346 

 

1,014,944,364 

 

 

 

 

 

 

 

 

 

 

 

 

 

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




F-3








IFAN Financial, Inc.

F/k/a Infantly Available, Inc.

 

 STATEMENT OF STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

Common Stock

 

Additional

 

 

 

 

 

 

 

Shares

 

Par Value

 

Shares

 

Par Value

 

Paid-In Capital

 

Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, August 31, 2012

-

$

-

 

1,027,044,200 

$

1,027,044 

$

(1,014,572)

$

(22,844)

$

(10,372)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

-

 

 

 

 

(19,209)

 

(19,209)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, August 31, 2013

-

 

-

 

1,027,044,200 

 

1,027,044 

 

(1,014,572)

 

(42,053)

 

(29,581)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares cancelled for preferred shares

 

900,000

 

900

 

(947,084,180)

 

(947,084)

 

946,184 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contributed capital

-

 

-

 

 

 

41,812 

 

 

41,812 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deemed dividend for beneficial conversion feature of preferred stock

-

 

-

 

 

 

 

1,750,161 

 

1,750,161 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(1,791,959)

 

(1,791,959)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, August 31, 2014

900,000

$

900

 

79,960,020 

$

79,960 

$

(26,576)

$

(83,581)

$

(29,567)

 

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




F-4







IFAN Financial, Inc.

F/k/a Infantly Available, Inc.

STATEMENTS OF CASH FLOW

 

 

 

 

Twelve months

 

Twelve months

 

 

 

 

 

ended

 

ended

 

 

 

 

 

August 31, 2014

 

August 31, 2013

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net loss

$

(41,798)

$

(19,209)

 

 

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

Increase in prepaid expense

 

(56,620)

 

 

 

 

Decrease in accounts payable and accrued expenses

 

5,925 

 

9,324 

 

 

 

 

 

 

 

 

 

 

NET CASH USED IN OPERATING ACTIVITIES

 

(92,493)

 

(9,885)

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

     Advances to Mobicash America, Inc.

 

(30,000)

 

 

 

 

     Payment of license purchase

 

(30,000)

 

 

 

 

 

 

 

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

 

(60,000)

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

Proceeds from related party payable

 

151,138 

 

5,700 

 

 

 

Proceeds from common stock issuance

 

 

5,350 

 

 

 

 

 

 

 

 

 

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

151,138 

 

11,050 

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH

 

(1,355)

 

1,165 

 

 

 

 

 

 

 

 

 

 

CASH, BEGINNING OF PERIOD

 

1,355 

 

190 

 

 

 

 

 

 

 

 

 

 

CASH, END OF PERIOD

$

$

1,355 

 

 

 

 

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

Interest

$

$

 

 

 

 

 

 

 

 

 

 

 

Income taxes

$

$

 

 

 

 

 

 

 

 

 

 

 

Payables converted to capital, net of cash

$

41,812 

$

 

 

 

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



F-5





IFAN Financial, Inc.

F/k/a Infantly Available, Inc.

(A Development Stage Company)

 NOTES TO THE FINANCIAL STATEMENTS


August 31, 2014



NOTE 1 – FINANCIAL STATEMENTS


The Company was incorporated in the State of Nevada as a for-profit Company on June 11, 2010 and established a fiscal year end of August 31. The initial business plan was to develop and distribute an organic clothing line designed for children. All our clothing would have been made of natural fibers only.


During the year, the Company abandoned the business plan as an organic children’s clothing company.  In June 2014, the Company signed an agreement with MobiCash America, Inc. to develop technology solutions in the mobile payment and social media markets.  


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Going Concern


The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.


In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.


The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


Basis of Presentation


The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.


Cash and Cash Equivalents


The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.  As of August 31, 2014 and August 31, 2013 there were no cash equivalents.


Use of Estimates and Assumptions


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.




F-6





Income Taxes


The Company follows the liability method of accounting for income taxes. 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 balances.  Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the date of enactment or substantive enactment.


Financial Instruments


As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.


The three levels of the fair value hierarchy are described below:


Level 1  Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;


Level 2  Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;


Level 3  Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).


Stock-based Compensation


The Company has not adopted a stock option plan and has not granted any stock options.  Accordingly, no stock-based compensation has been recorded to date.


Share Based Expenses


FASB ASC 718 “Compensation – Stock Compensation” prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock option, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (A) the option to settle by issuing equity instruments lacks commercial substance or (B) the present obligation is implied because of an entity’s past practice or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.


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


Basic and Diluted Net Loss per Share


The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common



F-7





shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are the same.


Recently Issued Accounting Pronouncements


In June 2014, the Financial  Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915), Elimination of Certain Financial Reporting Requirements, Including an Amendment to  Variable  Interest Entities Guidance in Topic  810, "Consolidation” (“ASU 2014-10”). The amendments in ASU 2014-10 remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from accounting principles generally accepted in the United States of America (“U.S. GAAP”). In addition,  the amendments eliminate  the requirements for development stage entities to: (i) present inception-to-date information in the statements of income,  cash flows, and shareholder equity; (ii) label the financial statements as those of a development stage entity; (iii) disclose a description  of the development  stage activities in which the entity is engaged; and (iv) 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 presentation and disclosure requirements in ASC Topic 915, "Development Stage Entities" are no longer required for interim and annual reporting periods beginning after December 15, 2014. The revised consolidation standards will take effect in annual periods beginning after December 15, 2015, however, early adoption is permitted. The Company has elected to early adopt the provisions of ASU 2014-10 for this unaudited condensed consolidated financial statements.


Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification (ASC) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company’s present or future financial statements.


NOTE 3 – STOCK ISSUANCE


The Company’s capitalization is 800,000,000 common shares with a par value of $0.001 per share, 10,000,000 shares preferred shares with a par value of $0.001. As of August 31, 2014, 79,960,020 common shares were issued and outstanding and 900,000 preferred shares were issued and outstanding.


During the year, the Company had a change of control of majority shareholders.  In conjunction with the change of control, liabilities of $41,989, offset by $177 cash held in escrow owed to and incurred by prior management are not to be repaid and were included as contributed capital.


On May 8, 2014, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase its authorized capital to Eight Hundred Ten million shares (810,000,000) of which Eight Hundred Million (800,000,000) shall be shares of Common Stock, par value $0.001 per share, and ten million (10,000,000) shall be shares of Preferred Stock, par value $0.001 per share with one million (1,000,000) of such shares being designated as Series A Preferred Stock.


On May 8, 2014, the Board of Directors, with the approval of a majority vote of its shareholders approved the filing of a Certificate of Designation establishing the designations, preferences, limitations and relative rights of the Company’s Series A Preferred Stock. The terms of the Certificate of Designation of the Series A Preferred Stock, include the right to vote in aggregate, on all shareholder matters equal to 700 votes per share of Series A Preferred Stock and each Series A Preferred Stock share is convertible into shares of our common stock at a conversion rate of 700 shares of common stock for each one (1) share of Series A Preferred Stock. 


Effective May 8, 2014, the Board of Directors of the Company approved the issuance of 600,000 shares of Series A Preferred Stock to J. Christopher Mizer, and 300,000 shares of Series A Preferred Stock to Steve Scholl in exchange for J. Christopher Mizer’s cancellation of 6,764,887 shares, representing the ownership of approximately 92.2%, of the Company’s Common Stock.  J. Christopher Mizer, will retain an ownership of 357,143 shares of common stock in the Company after this cancellation.




F-8





On August 4, 2014, the Directors of the Company, receiving the majority vote of the Company’s Shareholders, approved (i) a change in the Company name from “Infantly Available, Inc.” to “IFAN Financial, Inc.” and (ii) a 140-for-1 forward stock split of the issued and outstanding shares of common stock of the Company, which shall be payable as a dividend and upon surrender.  All statements have been retroactively restated to reflect this change. On August 5, 2014, the Company filed a Certificate of Amendment with the Secretary of State of Nevada, giving effect to the name change, among other things.


NOTE 4 – RELATED PARTY TRANSACTIONS


The Company neither owns nor leases any real or personal property.  An officer provides office services without charge.  Such costs are immaterial to the financial statements and accordingly, have not been reflected therein.  The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities.  If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest.  The Company has not formulated a policy for the resolution of such conflicts.


As of August 31, 2014, there were loans payable to two officers for $128,554 and $17,633, respectively that are non-interest bearing with no specific repayment terms.  As of August 31, 2014, neither officer had made demand for repayment of funds.


NOTE 5 – LICENSE AGREEMENT


On May 15, 2014, the Company entered into a two (2) year License Agreement (the “License Agreement”) with IPIN Debit Network, Inc., a New Brunswick, Canada corporation (“IPIN”) for the former’s use and distribution of IPIN’s technology, systems and products in the nature of electronic payments processing and its United States Letters Patents. After the two (2) year period, the License Agreement shall be automatically renewable for successive one (1) year periods for an additional ten (10) years provided that IPIN has received a minimum of Five Million ($5,000,000) dollars in Royalty payments for each of the three (3) through twelve (12) successive years from the signing of the License Agreement.


Pursuant to the License Agreement, the Company will be required to pay IPIN Two Hundred Fifty Thousand ($250,000) Dollars in the following amounts as per the terms of the License Agreement:


(a)

in consideration for the licenses granted hereunder, the Company agrees to pay to IPIN Two Hundred Fifty Thousand United States Dollars ($250,000) (hereinafter the “License Fee”).


(b)

the License Fee owed IPIN shall be payable according to the following schedule when IPIN achieves certain benchmarks:


i)

$10,000 upon execution of this License Agreement;

ii)

$20,000 when IPIN successfully demonstrates the integration, publishing design, and on-boarding screens of its technology with the Android application package file (apk);

iii)

$20,000 when IPIN successfully integrates the Android app with the IPIN device as demonstrated by transferring the transaction details to the app after a card swipe occurs;

iv)

$60,000 when IPIN successfully demonstrates a card transaction including posting the status to the merchant call back uniform resource locator (url);

v)

$60,000 when IPIN successfully demonstrates a front end data base set up that enables an IPIN device user to affect an IPIN device transaction;

vi)

$60,000 when IPIN successfully demonstrates the completed, back-end development of the IPIN device Android app including any and changes needed to support it; and


As of August 31, 2014, the Company paid $30,000 in License Fees and prepaid License Fees of $56,620 to IPIN. The Company received 1,000,000 common shares from iPIN. The Company has not issued 1,000,000 shares to IPIN. The Company recorded this investment at $164,521(as par value Euro 0.12) and other liability $164,521.




F-9





NOTE 6 – INCOME TAXES


We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Accounting for Uncertainty in Income Taxes when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit.  We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period.


The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of and 2014 and 2013 are as follows:


 

August 31,

2014

August 31,

2013

 

 

 

Net operating loss carry forward   

$

83,581  

$

42,053  

Effective tax rate

35%

35%

Deferred tax asset

29,347  

14,719  

Less: Valuation allowance

(29,347) 

(14,719) 

Net deferred tax asset

$

-  

$

-  



The reconciliation of income taxes computed at the statutory rate to the income tax recorded is as follows:


 

August 31, 2014

August 31, 2013

 

 

 

Net operating loss carry forward

$

41,798  

$

19,209  

Effective tax rate

35%

35%

Deferred tax assets

14,629  

6,723  

Less: Valuation allowance

(14,629) 

(6,723) 

Net deferred tax asset

$

-  

$

-  



The net federal operating loss carry forward will expire between 2031 and 2034.  This carry forward may be limited upon the consummation of a business combination under IRC Section 381.


NOTE 7 – SUBSEQUENT EVENTS, ACQUISITION OF MOBICASH AMERICA, INC.


On June 6, 2014, the Company signed the share exchange agreement with MobiCash America, Inc. D/B/A Quidme. The Company will acquire 100% of the issued and outstanding securities of Quidme in exchange for the issuance of 43,000,000 shares of IFAN common stock, par value $.001 per share. The Company will fund $500,000 to support the continued development and commercialization of Quidme’s technology.  


On October 3, 2014, the Company closed the share exchange by acquiring Mobicash America, Inc. and through an amended Share Exchange Agreement we issued 61,858 shares of Series A preferred stock to the shareholders of Mobicash America, Inc., D/B/A Quidme.


Effect of Acquisition of Mobicash America, Inc.


If the acquisition of Mobicash America, Inc. had been completed as of August 31, 2014, the consolidated balance sheet and statement of operations would have appeared as follows:



F-10






IFAN FINANCIAL, INC.

CONSOLIDATED PRO FORMA BALANCE SHEETS

 

 

 

 

IFAN

 

 

 

MOBICASH

 

 

Pro-forma

Adjustments

 

 

 

Pro forma

 

 

 

AUG 31,

2014

 

 

AUG 31,

2014

 

 

AUG 31,

2014

 

 

AUG 31,

2014

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

-- 

 

 

$

14,471 

 

 

$

-- 

 

 

$

14,471 

 

Advances

     

 

30,000 

 

 

 

-- 

 

 

 

(30,000)

 

 

 

-- 

 

Prepaid expenses

 

 

56,620 

 

 

 

-- 

 

 

 

-- 

 

 

 

56,620 

 

Total current assets

 

 

86,620 

 

 

 

14,471 

 

 

 

(30,000)

 

 

 

81,091 

 

           Property, plant & equipment, net

    

 

-- 

 

 

 

4,774 

 

 

 

-- 

 

 

 

4,774 

 

OTHER ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment

 

 

164,521 

 

 

 

-- 

 

 

 

-- 

 

 

 

164,521 

 

           Intangible assets

 

 

30,000 

 

 

 

-- 

 

 

 

-- 

 

 

 

30,000 

 

                Total other assets

 

 

194,521 

 

 

 

-- 

 

 

 

-- 

 

 

 

194,521 

 

TOTAL ASSETS 

 

281,141 

 

 

19,245 

 

 

 $

(30,000)

 

 

270,836 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payables and accrued liabilities

 

 $

-- 

 

 

294,954 

 

 

 $

-- 

 

 

 $

294,954 

 

Related party payable

 

 

146,187 

 

 

 

45,122 

 

 

 

-- 

 

 

 

191,309 

 

Other liabilities

 

 

164,521 

 

 

 

-- 

 

 

 

-- 

 

 

 

164,521 

 

Advances

 

 

-- 

 

 

 

30,000 

 

 

 

(30,000)

 

 

 

 

 

Total current liabilities

 

 

310,708 

 

 

 

370,076 

 

 

 

(30,000)

 

 

 

650,784 

 

Long-term loans

 

 

 

 

 

 

5,000 

 

 

 

-- 

 

 

 

5,000 

 

           TOTAL LIABILITIES

 

 

310,708 

 

 

$

375,076 

 

 

 

(30,000)

 

 

 

655,784 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock $0.001 par value, 900,000 authorized, 962

          issued and outstanding

 

 

900 

 

 

$  

-- 

 

 

 

62 

 

 

 

962 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock $0.001 par value, 800,000 authorized, 79,960,143

          issued and outstanding

 

 

79,960 

 

 

$

534,302 

 

 

 

(534,302)

 

 

 

79,960 

 

Additional paid in capital

 

 

26,576 

 

 

 

-- 

 

 

 

534,240 

 

 

 

507,664 

 

Accumulated income (deficit)

 

 

(83,851)

 

 

 

(890,133)

 

 

 

-- 

 

 

 

(973,984)

 

Total stockholders’ equity (deficit)

 

 

(29,567)

 

 

 

(355,828)

 

 

 

 

--

 

 

(385,398)

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

$

281,141 

 

 

$

19,245 

 

 

$

30,000 

 

 

$

270,386 

 


 



F-11






IFAN FINANCIAL, INC.

CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS

 

 

 

 

YEAR ENDED

AUGUST 31,

2014

 

 

 

YEAR ENDED

AUGUST 31,

2014

 

 

 

YEAR ENDED

AUGUST

31, 2014

 

 

 

YEAR ENDED

AUGUST

31,2014

 

 

 

 

IFAN

 

 

 

MOBICASH

 

 

 

Adjustments

 

 

 

Pro forma

 

REVENUE

 

$

-- 

 

 

$

-- 

 

 

$

--

 

 

$

-- 

 

COST OF REVENUE

 

 

-- 

 

 

 

-- 

 

 

 

--

 

 

 

-- 

 

GROSS PROFIT

 

 

-- 

 

 

 

-- 

 

 

 

--

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

-- 

 

 

 

4,751 

 

 

 

--

 

 

 

4,751 

 

Professional fees and related expenses

 

 

13,825 

 

 

 

-- 

 

 

 

--

 

 

 

13,825 

 

Office and general expenses

 

 

28,973 

 

 

 

-- 

 

 

 

--

 

 

 

28,973 

 

Research and development

 

 

-- 

 

 

 

440,638 

 

 

 

--

 

 

 

440,638 

 

TOTAL OPERATING EXPENSES

 

 

42,798 

 

 

 

445,389 

 

 

 

--

 

 

 

488,187 

 

OPERATING INCOME (LOSS)

 

$

(42,798)

 

 

 

(445,389 

)

 

$

--

 

 

 

(488,187)

 

OTHER EXPENSE (INCOME), non-operating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

 

1,000 

 

 

 

-- 

 

 

 

--

 

 

 

1,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(41,798 

)

 

 

(445,389 

)

 

 

--

 

 

 

(487,167 

)

Deemed dividend for beneficial conversion of preferred stock

 

 

1,750,161 

 

 

 

-- 

 

 

 

--

 

 

 

1,750,161 

 

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

 

 

1,791,959 

 

 

 

(445,389)

 

 

 

--

 

 

 

2,237,358 

 

BASIC LOSS PER SHARE

 

$

-- 

 

 

$

-- 

 

 

$

--

 

 

$

-- 

 

WEIGHTED AVERAGE NUMBER

OF COMMON SHARES OUTSTANDING

 

 

715,674,029 

 

 

 

-- 

 

 

 

--

 

 

 

715,674,029 

 


Entry into a Material Definitive Agreement


Pursuant to a subscription agreement executed on November 25, 2014, IFAN Financial, Inc. closed a private placement to one accredited investor, for an aggregate of 3,703,703 restricted common shares at a price of $0.27 per share, and an equal amount of warrants that are exercisable until December 31, 2015 at an exercise price of $1.00 per Warrant Share for total gross proceeds of $1,000,000.  The restricted common shares were offered by the Company pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended.  The private placement was fully subscribed to by one non-U.S. person.  The Units payment schedule is as follows:


1.

$200,000 to be paid upon the execution of the Subscription Agreement;

2.

$200,000 to be paid by December 8, 2014;

3.

$200,000 to be paid by December 29, 2014;

4.

$200,000 to be paid by January 19, 2015; and

5.

$200,000 to be paid by February 9, 2015.


Except as disclosed above, the Company has evaluated subsequent events from August 31, 2014 through the date the financial statements were issued, and concluded there were no events or transactions occurring during this period that required recognition or disclosure in its financial statements.



F-12






CONSOLIDATED FINANCIAL STATEMENTS



IFAN Financial, Inc.


For the Period Ending

May 31, 2015

 (Unaudited)



Financial Statement Index


Consolidated Balance Sheets

F-14


Consolidated Statements of Operations

F-15


Consolidated Statements of Cash Flows

F-16


Notes to the Consolidated Financial Statements

F-17




F-13






 

IFAN Financial, Inc. and Subsidiaries

 

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

 

 

 

 

 

May 31,

2015

 

August 31,

2014

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash

 

 

 

 

$

255,352 

$

Prepaid expense

 

 

 

 

 

46,620 

 

56,620 

Advance

 

 

 

 

 

 

30,000 

TOTAL CURRENT ASSETS

 

 

 

 

 

301,972 

 

86,620 

 

 

 

 

 

 

 

 

 

Fixed assets, net

 

 

 

 

 

2,002 

 

Investment, net

 

 

 

 

 

 

164,521 

License agreement, net

 

 

 

 

 

28,000 

 

30,000 

Other assets

 

 

 

 

 

675 

 

Goodwill

 

 

 

 

 

4,704,264 

 

TOTAL ASSETS

 

 

 

 

$

5,036,913 

$

281,141 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

 

 

$

351,689 

$

Due to related party

 

 

 

 

 

362,945 

 

146,187 

Short term notes payable, net of discount $56,777 and $0, respectively

 

 

 

 

 

223,223 

 

Common stock payable

 

 

 

 

 

254,550 

 

164,521 

TOTAL CURRENT LIABILITIES

 

 

 

 

 

1,192,407 

 

310,708 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value,

 

 

 

 

 

 

 

 

 

10,000,000 shares authorized,

 

 

 

 

 

 

 

961,858 and 900,000 issued and outstanding, respectively

 

 

 

962 

 

900 

Common stock, $0.001 par value,

 

 

 

 

 

 

 

 

 

 800,000,000 shares authorized, 84,486,774 and 79,960,020 shares

 

 

 

 

 

 issued and outstanding, respectively

 

 

84,487 

 

79,960 

Additional paid-in capital (deficit)

 

 

 

 

 

5,940,120 

 

(26,576)

Accumulated deficit

 

 

 

 

 

(2,181,063)

 

(83,851)

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

3,844,506 

 

(29,567)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

$

5,036,913 

$

281,141 

 

 

 

 

 

 

 

 

 

 

 

 

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



F-14






IFAN Financial, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three months

 

Three months

 

Nine months

 

Nine months

 

 

ended

 

ended

 

ended

 

ended

 

 

May 31, 2015

 

May 31, 2014

 

May 31, 2015

 

May 31, 2014

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

$

$

$

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

11,284 

 

 

186,701 

 

Selling, general and administrative

 

574,577 

 

27,328 

 

1,721,224 

 

37,534 

Amortization of license agreement

 

7,000 

 

 

22,000 

 

Impairment expense

 

 

 

164,521 

 

Total expenses

 

592,861 

 

27,328 

 

2,094,446 

 

37,534 

 

 

 

 

 

 

 

 

 

Interest income (expense)

 

(2,766)

 

1,000 

 

(2,766)

 

1,000 

 

 

 

 

 

 

 

 

 

NET LOSS

$

(595,627)

$

(26,328)

$

(2,097,212)

$

(36,534)

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED LOSS PER COMMON SHARE

$

(0.01)

$

(0.00)

$

(0.03)

$

(0.01)

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED

 

84,100,808 

 

5,644,808 

 

81,807,787 

 

6,766,094 

 

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




F-15







IFAN Financial, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Nine months

 

Nine months

 

 

 

 

 

ended

 

ended

 

 

 

 

 

May 31, 2015

 

May 31, 2014

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net loss

$

(2,097,212)

$

(36,534)

 

 

 

Adjustments to reconcile net income loss to net

cash used in operating activities:

 

 

 

 

 

Depreciation expense

 

2,772 

 

 

 

 

Amortization of debt discount

 

2,766 

 

 

 

 

Amortization of license agreement

 

22,000 

 

 

 

 

Impairment expense

 

164,521 

 

 

 

 

Stock-based compensation

 

1,425,111 

 

 

 

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

   Prepaid expense

 

 

(66,620)

 

 

 

   Other assets

 

29,325 

 

 

 

 

   Accounts payable and accrued expenses

 

26,922 

 

7,425 

 

 

NET CASH USED IN OPERATING ACTIVITIES

 

(423,795)

 

(95,729)

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

               Payment for license

 

(10,000)

 

(10,000)

 

 

NET CASH USED IN INVESTING ACTIVITIES

 

(10,000)

 

(10,000)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

   Proceeds from  sale of common stock

 

286,600 

 

 

 

 

   Proceeds from related party payable

 

167,547 

 

104,374 

 

 

 

   Proceeds from note payable

 

235,000 

 

 

 

NET  CASH PROVIDED BY FINANCING ACTIVITIES

 

689,147 

 

104,374 

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

255,352 

 

(1,355)

 

 

 

 

 

 

 

 

 

 

CASH, BEGINNING OF PERIOD

 

 

1,355 

 

 

 

 

 

 

 

 

 

 

CASH, END OF PERIOD

$

255,352 

$

 

 

 

 

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

Interest

$

$

 

 

 

Income taxes

$

$

 

 

 

 

 

 

 

 

 

 

NONCASH  FINANCING AND INVESTING ACTIVITIES:

 

 

 

 

 

 

Common stock issued to IPIN for common stock payable

$

164,521 

$

 

 

Preferred stock issued for acquisition of Mobicash

$

4,330,060 

$

 

 

Reclassification of prepaid expense to license agreement, net

$

10,000 

$

 

 

Relative fair value of warrants issued as debt discount

$

19,543 

$

 

 

Original issuance discount

$

40,000 

$

 

 

 

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




F-16





IFAN Financial, Inc.

Notes to the consolidated financial statements

May 31, 2015
(Unaudited)


NOTE 1 – NATURE OF BUSINESS


The Company was incorporated in the State of Nevada on June 11, 2010 and established a fiscal year end of August 31. The initial business plan was to develop and distribute an organic clothing line designed for children.


On April 2014, the Company abandoned the business plan as an organic children’s clothing company.  In June 2014, the Company signed an agreement with MobiCash America, Inc. to develop technology solutions in the mobile payment and social media markets. The Company acquired MobiCash America on October 3, 2014.


The accompanying unaudited interim consolidated financial statements of IFAN Financial, Inc. and subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report on Form 10-K filed with the SEC on December 16, 2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year ended

August 31, 2014, as reported in Form 10-K, have been omitted.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MobiCash America, Inc. Intercompany balances are eliminated upon consolidation.


Cash and Cash Equivalents


The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.  


Goodwill


Goodwill represents the excess of the cost over the fair value of net tangible and intangible assets of acquired businesses.  Goodwill is assessed for impairment by applying fair value based tests annually or whenever events or changes in circumstances indicate the carrying amount may not be recoverable.  The goodwill impairment test consists of a two-step process. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit to its carrying value, including goodwill.  The second step, if required, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The fair value of a reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. If the carrying amount of the reporting unit's goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess.


Use of Estimates and Assumptions


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 the



F-17





reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Basic and Diluted Net Loss per Share


Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. Because the Company incurred a net loss during the periods ended May 2015 and 2014, respectively, diluted loss excludes all potential common shares from diluted loss per share.  At May 31, 2015 and August 31, 2014, the Company had 673,300,600 and 630,000,000, respectively, potentially issuable shares upon the conversion of Series A preferred stock into common stock.  At May 31, 2015 and August 31, 2014, the Company had 1,175,926 and 0, respectively, of potentially issuable shares upon the conversion of warrants into common stock.


Recently Issued Accounting Pronouncements


In April, the FASB issued ASU 2015-03 to simplify the presentation of debt issuance costs. Debt issuance costs are specific incremental third party costs—other than those paid to the lender—that are directly attributable to issuing a debt instrument. Under the new guidance, debt issuance costs will be presented as a direct deduction from the carrying value of the associated debt, consistent with the existing presentation of a debt discount. Before the FASB issued this simplification, debt issuance costs were capitalized as an asset (i.e., a deferred charge).  Early adoption is permitted. The Company has adopted this accounting pronouncement effective immediately.


NOTE 3 – GOING CONCERN


The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.


In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.


The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


NOTE 4 – ACQUISITION


On October 3, 2014, the Company acquired Mobicash America, Inc. (“Mobicash” d/b/a “Quidme”), a company incorporated under the laws of the State of California, through a Share Exchange Agreement whereby the Company issued 61,858 shares of Series A convertible preferred stock convertible into common stock at a conversion ratio of 700 common shares for 1 Series A preferred stock (the “Conversion Ratio”) to the shareholders of Mobicash.  The Company determined that the fair value of the Series A convertible preferred stock was $4,330,060 on October 3, 2014.


The acquisition was accounted for as a business combination. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on estimates of their respective fair values at the date of acquisition. The Company’s purchase price allocation for the acquired company is preliminary and subject to revision as a more detailed analysis is completed and additional information about the fair value of assets and liabilities becomes



F-18





available. The amounts related to the acquisition were allocated to the assets acquired and the liabilities assumed on the date of acquisition as follows:


 

 

 

 

October 3, 2014

Total consideration

 

 

 

$

4,330,060 

 

 

 

 

 

Fixed assets

 

 

 

4,774 

Total assets acquired

 

 

 

4,774 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

 

324,767 

Loans to related party

 

 

 

49,211 

Note payable

 

 

 

5,000 

Total liabilities assumed

 

 

 

378,978 

 

 

 

 

 

Net liabilities assumed

 

 

 

$

(374,204)

 

 

 

 

 

Goodwill

 

 

 

$

4,704,264 



NOTE 5 – LICENSE AGREEMENT


On May 15, 2014, the Company entered into a two-year License Agreement (the “License Agreement”) with IPIN Debit Network, Inc., a New Brunswick, Canada corporation (“IPIN”) for the Company’s use and distribution of IPIN’s technology, systems and products related to electronic payment processing and its United States Letters Patents.  After the two-year period, the License Agreement shall be automatically renewable for successive one-year periods up to an additional ten years provided that IPIN has received a minimum of $5,000,000 in royalty payments for each of the three (3) through twelve (12) successive years from the signing of the License Agreement.


In connection with the License Agreement, the Company was required to issue 1,000,000 shares of the Company’s common stock to IPIN and IPIN was required to issue 1,000,000 shares of IPIN common stock to the Company.  The Company was issued the IPIN common stock during the year ended August 31, 2014 and recorded the estimated fair value of the IPIN common stock of $164,521 as an investment and recorded a corresponding common stock payable.   The 1,000,000 shares of common stock of the Company was issued to IPIN during the six months ended February 28, 2015.  The Company recorded an impairment of $164,521 for its investment in IPIN common stock during the three months ended November 30, 2014.     


Pursuant to the License Agreement, the Company was required to pay $250,000 to IPIN in the following amounts upon achieving the below benchmarks:


(a)

$10,000 upon execution of the License Agreement (“Benchmark A”);

(b)

$20,000 when IPIN successfully demonstrates the integration, publishing design, and on-boarding screens of its technology with the Android application package file (“Benchmark B”);

(c)

$20,000 when IPIN successfully integrates the Android app with the IPIN device as demonstrated by transferring the transaction details to the app after a card swipe occurs (“Benchmark C”);

(d)

$60,000 when IPIN successfully demonstrates a card transaction including posting the status to the merchant call back uniform resource locator (“Benchmark D”);

(e)

$60,000 when IPIN successfully demonstrates a front end data base set up that enables an IPIN device user to affect an IPIN device transaction (“Benchmark E”);

(f)

$60,000 when IPIN successfully demonstrates the completed, back-end development of the IPIN device Android app including any and changes needed to support it (“Benchmark F”); and



F-19





(g)

$20,000 when IPIN successfully demonstrates the completed testing and deployment for in house participants applying the iPIN device Android app to the iPIN device for Apple iOS app, including testing and deployment (“Benchmark G”).

The Company pre-paid IPIN $66,620 at the inception of the License Agreement, which the Company recorded as prepaid expense.  The Company achieved Benchmarks A and Benchmark B during the year ended August 31, 2014 and applied $10,000 of its prepaid expense against the milestone payments and paid IPIN $20,000.  The Company achieved Benchmark C during the nine months ended May 31, 2015 and applied $10,000 of its prepaid expense against the milestone payment and paid IPIN $10,000. The Company amortizes each milestone payment using the straight line method over the term of the remaining useful life of the license agreement which ends May 15, 2016.  The Company has additional benchmarks to be achieved which aggregate to $200,000, of which $46,620 has been paid and is recorded as prepaid expense in the consolidated balance sheet as of May 31, 2015.


During the nine months ended May 31, 2015, the Company has recorded amortization related to the milestone payments of $22,000.


NOTE 6 – FIXED ASSETS


The Company’s fixed assets consist of used computer equipment acquired in connection with the acquisition of Mobicash and have a remaining estimated useful life of one year.  Property and equipment consist of the following:


 

February 28, 2015

 

August 31, 2014

Computer and Equipment

$

4,7744 

 

$

-

Less accumulated depreciation

(2,772)

 

-

Total

$

2,002 

 

$

-



The Company recorded depreciation expense of $2,772 and $0 during the nine months ended May 31, 2015 and 2014, respectively.


NOTE 7 – NOTE PAYABLE


The Company has a $5,000 note payable to an individual due in November 2015.  The note bears interest at 10% per annum.


Secured Promissory Note Agreement


On May 28, 2015, the Company and SBI Investments, LLC (“SBII”), completed a financing transaction that consisted of a Securities Purchase Agreement (the “SPA”), Two Secured Promissory Notes (the “Notes”), Stock Pledge Agreement (the “Pledge”), and Warrant Agreement, pursuant to which SBII has agreed to loan to the Company an aggregate of $550,000. The first note for $275,000 was issued by the Company on May 28, 2015 pursuant to the SPA and is due and payable on May 14, 2016 and accrues interest at 10% per annum payable at three, six and nine months from the issuance date. The second note will be issued upon the filing of a Form S-1 Registration Statement, pursuant to the SPA, and is due and payable on the one year anniversary of the filing date of the Form S-1 Registration Statement, and accrues interest at 10% per annum payable at three, six and nine months from the issuance date. Pursuant to the Pledge, the Company’s CEO and CFO pledged 11,000,000 shares of their restricted common stock to guarantee payment of the Notes issued pursuant to the SPA.


In connection with the issuance of the $275,000 note payable, the Company received cash proceeds of $235,000 and recorded a debt discount of $40,000 for the difference between the face value of the note and the cash proceeds.  The Company also issued the lender 250,000 warrants in connection with the issuance of this debt with an exercise price of $0.50 and a term of 3 years. The Company determined the relative fair value of the warrants as of their issuance date using the following inputs; 3-year term; 152% volatility; 1% risk free rate; $0 dividends and determined the fair value was $19,523, which the Company recorded as debt discount.  The Company will issue the lender an additional 250,000 warrants with a 3 year life and a $1.00 exercise price upon the issuance of the second note




F-20





During the nine months ended May 31, 2015, the Company recognized $2,766 of amortization expense and have $56,777 in unamortized debt issuance costs as of May 31, 2015.


NOTE 8 – EQUITY


Common stock


During the nine months ended May 31, 2015, the Company received $36,600 of cash proceeds pursuant to subscription agreements with third parties to purchase the common stock of the Company for $0.25 per share.  During the nine months ended May 31, 2015, the Company has issued 128,200 shares of common stock pursuant to these subscription agreements.  As of May 31, 2015, the Company has recorded a common stock payable of $4,550 as the Company has an obligation to issue the remaining 18,000 shares of common stock pursuant to the subscription agreements.  


During the nine months ended May 31, 2015, the Company received $250,000 of cash proceeds pursuant to a subscription agreement with an investor to purchase common stock of the Company for $0.27 per share and an equal number of warrants.  As of May 31, 2015, the Company has recorded a common stock payable of $250,000 related to its obligation to issue 925,926 shares of the Company’s common stock.  See Warrants below.


During the nine months ended May 31, 2015, the Company issued 3,398,554 shares of common stock for services.  The Company recorded stock-based compensation expense of $1,425,111 based on the grant date fair value of the common stock of the Company on the issuance dates.


During the nine months ended May 31, 2015, the Company issued 1,000,000 shares of the Company’s common stock valued at $164,521 to IPIN which were recorded as common stock payable at August 31, 2014.  The 1,000,000 shares were issued in January 2015.


Equity line of Credit


During May 2015, the Company entered into a second Securities Purchase Agreement (the “Equity Line Agreement”) with SBII, pursuant to which the Company may issue and sell to SBII $2,000,000 of the Company’s registered common stock (the “Shares”).  The aggregate maximum amount of all purchases that SBII shall be obligated to make under the Equity Line Agreement shall not exceed $2,000,000.  The purchase price for the Shares to be paid by SBII shall be eighty percent (80%) of the average of the three (3) lowest closing daily prices of the Company’s common stock during the five (5) consecutive trading days prior to the date of the draw down notice from the Company to SBII or eighty five percent (85%) of the price on the fifth trading day of the draw down pricing period.


The Company did not sell any shares pursuant to the Equity Line Agreement during the nine months ended May 31, 2015.


Preferred stock


The Company issued 61,858 shares of Series A preferred stock convertible into common stock of the Company as consideration for the acquisition of Mobicash.  See Note 5.


Warrants


Pursuant to a subscription agreement with an investor to purchase the Company’s common stock at $0.27 per share, the Company also issued warrants to the investor to purchase 925,926 shares of the Company’s common stock with a $1.00 exercise price.  The warrants expire on December 31, 2015.  The Company determined the fair value of the warrants as of their issuance date using the following inputs; 1-year term; 152% volatility; 1% risk free rate; $0 dividends and determined the fair value was approximately $246,000.   


Pursuant to the Secured Promissory Note Agreement (See Note 7), the Company issued 250,000 warrants to a  lender. The Company determined the relative fair value of the warrants as of their issuance date using the following inputs; 3-year term; 170% volatility; 1% risk free rate; $0 dividends and determined the fair value was $19,523, which the Company recorded as debt discount.  



F-21






 

 

Number of Warrants

 

Weighted

Average

Exercise Price

 

Aggregate

Intrinsic

Value

 

Weighted

average

remaining

contractual

life (years)

Outstanding at August 31,2014

 

 

-

 

$

-

 

 

-

 

$

-

Granted

 

 

1,175,926

 

 

0.89

 

 

-

 

 

0.81

Exercised

 

 

 

 

 

-

 

 

 

 

 

 

Expired

 

 

-

 

 

-

 

 

 

 

 

 

Outstanding and exercisable at May 31, 2015

 

 

1,175,926

 

$

0.89

 

$

-

 

$

0.81



NOTE 9 – RELATED PARTY TRANSACTIONS


As of May 31, 2015 and August 31, 2014, the Company had related party notes payable of $362,945 and $146,187, respectively, related to services provided to the Company that are non-interest bearing with no specific repayment terms. As of May 31, 2015, there were loans payable to five officers for $199,587, $128,688, $29,420, $3,250 and $2,000, respectively. As of August 31, 2014, there were loans payable to two officers for $128,554 and $17,633, respectively.


NOTE 10 – COMMITMENTS AND CONTINGENCIES


The Company and certain former owners and officers of Mobicash are in a dispute related to the acquisition of Mobicash by the Company.  The Company has not determined if this dispute will result in additional obligations to the Company.



F-22





PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 13.  Other expenses of issuance and distribution.


Expenses incurred or expected relating to this Prospectus and distribution are as follows:


SEC Filings

$

250

Transfer Agent

1,000

Misc. Expenses

5,000

Legal and Accounting

28,750

Total Offering Expenses

$

35,000



Item 14.  Indemnification of directors and officers


Our articles of incorporation provide that no director or officer shall be personally liable for damages for breach of fiduciary duty for any act or omission unless such acts or omissions involve intentional misconduct, fraud, knowing violation of law, or payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes.


Our bylaws provide that we shall indemnify any and all of our present or former directors and officers, or any person who may have served at our request as director or officer of another corporation in which we own stock or of which we are a creditor, for expenses actually and necessarily incurred in connection with the defense of any action, except where such officer or director is adjudged to be liable for negligence or misconduct in performance of duty. To the extent that a director has been successful in defense of any proceeding, the Nevada Revised Statutes provide that he shall be indemnified against reasonable expenses incurred in connection therewith.


We do not currently maintain standard policies of insurance under which coverage is provided (a) to our directors, officers, employees and other agents against loss arising from claims made by reason of breach of duty or other wrongful act, and (b) to us with respect to payments which may be made by us to such officers and directors pursuant to the above indemnification provision or otherwise as a matter of law, although we may do so in the future.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy and is, therefore, unenforceable.


Item 15.  Recent sales of unregistered securities.


Set forth below is information regarding the issuance and sales of securities without registration since inception.  No such sales involved the use of an underwriter; no advertising or public solicitation was involved; the securities bear a restrictive legend; and no commissions were paid in connection with the sale of any securities.


On or about August 4, 2011, we issued 7,122,030 common shares to our sole officer and director for total consideration of $7,122, or $0.001 per share. The Company believes that this issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, as a transaction by an issuer not involving any public offering.


Effective May 8, 2014, the Board of Directors of the Company approved the issuance of 600,000 shares of Series A Preferred Stock to J. Christopher Mizer, and 300,000 shares of Series A Preferred Stock to Steve Scholl in exchange for J. Christopher Mizer’s cancellation of 6,764,887 shares, representing the ownership of approximately 92.2%, of the Company’s Common Stock.  J. Christopher Mizer, will retain an ownership of 357,143 shares of common stock in the Company after this cancellation.


On June 6, 2014, the Company signed the share exchange agreement (“Agreement”) with Mobicash America, Inc. D/B/A Quidme, a company incorporated under the laws of the State of California (“Quidme” or “Mobicash America, Inc.”), and the shareholders of Quidme (the “Selling Stockholders”) pursuant to a share exchange agreement by and among the Company, Quidme and the Selling Stockholders. The Company will acquire 100% of the issued and outstanding securities of Quidme in exchange for the issuance of 43,000,000 shares of IFAN common



II-1





stock, par value $0.001 per share. The Company will also fund $500,000 over the next six months, to support the continued development and commercialization of Quidme’s technology.  As a result of the Agreement the Selling Stockholders will acquire up to 35% of the Company’s currently issued and outstanding shares of common stock.  Upon completion of the Agreement, Quidme will become the wholly-owned subsidiary and the Company acquired the business and operations of Quidme.  Further, on the Closing date of the Agreement, Christopher Menya, shall also be appointed the Chief Technology Officer and as a Director of IFAN, as President of the Quidme operating Subsidiary, and John C. De Puy will be appointed as a Director of Quidme. The Agreement is to be completed contingent on the successful financial audit of Mobicash America, Inc.


On October 3, 2014, we received the audited financials of Mobicash, America, Inc., and we closed the share exchange by acquiring Mobicash America, Inc. and through an amended Share Exchange Agreement (the “Amended Agreement”) we issued the 61,858 shares of our Series A preferred stock to the shareholders of Mobicash America, Inc., d/b/a Quidme.  


During the six months ended February 28, 2015, the Company received $36,600 of cash proceeds pursuant to subscription agreements with third parties to purchase the common stock of the Company for $0.25 per share.  During the six months ended February 28, 2015, the Company has issued 128,200 shares of common stock pursuant to these subscription agreements.  As of February 28, 2015, the Company has recorded a common stock payable of $4,550 as the Company has an obligation to issue the remaining 18,000 shares of common stock pursuant to the subscription agreements.  


During the six months ended February 28, 2015, the Company received $250,000 of cash proceeds pursuant to a subscription agreement with an investor to purchase common stock of the Company for $0.27 per share and an equal number of warrants.  As of February 28, 2015, the Company has recorded a common stock payable of $250,000 related to its obligation to issue 925,926 shares of the Company’s common stock


During the six months ended February 28, 2015, the Company issued 2,023,000 shares of common stock for services.  The Company recorded stock-based compensation expense of $990,029 based on the grant date fair value of the common stock of the Company.


During the six months ended February 28, 2015, the Company issued 1,000,000 shares of the Company’s common stock valued at $310,000 to IPIN which were recorded as common stock payable at August 31, 2014.  The 1,000,000 shares were issued in January 2015.

 

All of the above offerings and sales were deemed to be exempt under rule 903 of Regulation S, Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, and transfer was restricted by IFAN Financial, Inc., 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 all of the purchasers in the Regulation S offering were not US persons as defined in Regulation S. Except as expressly set forth above, the individuals and entities to whom we issued securities as indicated in this section of the registration statement are unaffiliated with us.


Item 16. Exhibits

 

The following exhibits are included in this registration statement:


Exhibit Number

 

 

Description of Exhibit

 

 

 

Filing

 

3.01

Articles of Incorporation.

 

Filed with the SEC on December 27, 2011 as part of our Registration of Securities on Form S-1.

3.01(a)

Amended and Restated Articles of Incorporation.

 

Filed with the SEC on May 12, 2014 as part of our Current Report on Form 8-K.

3.02

Bylaws.

 

Filed with the SEC on December 27, 2011 as part of our Registration of Securities on Form S-1.



II-2








3.03

Certificate of Designation.

 

Filed with the SEC on May 12, 2014 as part of our Current Report on Form 8-K.

4.01

2015 Equity Compensation Plan.

 

Filed with the SEC on February 5, 2015 as part of our Form S-8 Registration.

4.02

Form of Registration Rights Agreement.

 

Filed with the SEC on June 2, 2015 as part of our Current Report on Form 8-K.

5.01

Opinion of the Law Office of Andrew Coldicutt.

 

Filed with the SEC on July 15, 2015 as part of our Registration of Securities on Form S-1.

10.01

License Agreement by and between the Company and IPIN Debit Network Inc., dated May 15, 2014.

 

Filed with the SEC on May 21, 2014, as part of our Current Report on Form 8-K.

10.02

Share Exchange Agreement by and between the Company and MobiCash America, Inc. D/B/A Quidme, dated June 6, 2014.

 

Filed  with the SEC on July 21, 2014, as part of our Quarterly Report on Form 10-Q.

10.03

Amended Share Exchange Agreement by and between the Company and Mobicash America, Inc. D/B/A Quidme, dated October 3, 2014.

 

Filed with the SEC on October 6, 2014, as part of our Current Report on Form 8-K.

10.04

Form of Subscription Agreement.

 

Filed with the SEC on December 2, 2014, as part of our Current Report on Form 8-K.

10.05

Form of Warrant Agreement.

 

 Filed with the SEC on December 2, 2014, as part of our Current Report on Form 8-K.

10.06

Form of Secured Promissory Note.

 

Filed with the SEC on June 2, 2015, as part of our Current Report on Form 8-K.

10.07

Form of Stock Pledge Agreement.

 

Filed with the SEC on June 2, 2015, as part of our Current Report on Form 8-K.

10.08

Form of Warrant Agreement.

 

Filed with the SEC on June 2, 2015, as part of our Current Report on Form 8-K..

10.09

Form of Equity Line of Credit.

 

Filed with the SEC on June 2, 2015, as part of our Current Report on Form 8-K..

16.01

Responsive Letter from Anton & Chia, LLP.

 

Filed with the SEC on October 15, 2014 as part of our Amended Current Report on Form 8-K/A.

16.02

Responsive Letter from Kyle L. Tingle.

 

Filed with the SEC on April 27, 2015, as part of our Amended Current Report on Form 8-K/A.

21.01

List of Subsidiaries

 

Filed with the SEC on October 6, 2014, as part of our Current Report on Form 8-K.

23.01

Auditor Consent

 

Filed Herewith.

23.02

Consent of the Law Office of Andrew Coldicutt (included in Exhibit 5.01)

 

Filed with the SEC on July 15, 2015 as part of our Registration of Securities on Form S-1.


Item 17.  Undertakings.


(A) Rule 415 Offering. The undersigned Registrant hereby undertakes:


(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:


(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;


(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum



II-3





offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.


(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;


(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.


(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.


(B) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.


(C) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:


(i) each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.


(D) For the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:


(i) that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:


(a) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;


(b) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;


(c) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and


(d) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.



II-4





SIGNATURES

 

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and authorized this registration statement to be signed on its behalf by the undersigned, in San Diego, California, on October 9, 2015.



 

 

IFAN FINANCIAL, INC.

 

 

by:

/s/Mr. J. Christopher Mizer

 

Mr. J. Christopher Mizer

 

Chief Executive Officer, Director



Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.


/s/ Mr. J. Christopher Mizer

Chief Executive Officer

October 9, 2015

Mr. J. Christopher Mizer

Title

Date


/s/ Mr. Steve Scholl

Principal Financial Officer

October 9, 2015

Mr. Steve Scholl

Title

Date


/s/ Mr. Steve Scholl

Principal Accounting Officer

October 9, 2015

Mr. Steve Scholl

Title

Date


/s/ Mr. J. Christopher Mizer

Director

October 9, 2015

Mr. J. Christopher Mizer

Title

Date


/s/ Mr. Steve Scholl

Director

October 9, 2015

Mr. Steve Scholl

Title

Date






II-5