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RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
 3 Months Ended 12 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Accounting Changes and Error Corrections [Abstract]    
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
3 RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

  

Fixed Assets

 

The Company reclassified certain kiosk assets used in the production of income, previously recorded in inventory as fixed assets and applied an appropriate depreciation policy to these kiosks.

 

The restated Unaudited Condensed Consolidated Balance Sheet, Statements of Operations and Comprehensive loss and the Statement of Cash Flows for the three months ended March 31, 2016, is presented below: 

 

QPAGOS

CONDENSED CONSOLIDATED BALANCE SHEET

March 31, 2016

 

    As                  
    Previously               As  
    Reported     Adjustments     Notes   Restated  
    (Unaudited)               (Unaudited)  
Assets                            
                             
Current Assets                            
Cash   $ 250,908     $           $ 250,908  
Accounts receivable     398,074                   398,074  
Inventory     553,259       (281,364 )   (A)     271,895  
Recoverable IVA taxes and credits     527,597                   527,597  
Other current assets     69.422                   69,422  
Total Current Assets     1,799,260       (281,364 )         1,517,896  
                             
Non-Current Assets                            
Plant and equipment, net     62,395       222,563     (A)     284,958  
Intangibles, net     200,667                   200,667  
Investment     3,000                   3,000  
Other assets     11,780                   11,780  
Total Non-Current Assets     277,842       222,563           500,405  
Total Assets   $ 2,077,102     $ (58,801 )       $ 2,018,301  
                             
Liabilities and Stockholders' Equity                            
                             
Current Liabilities                            
Accounts payable   $ 77,082     $           $ 77,082  
Notes payable     106,312                   106,312  
IVA and other taxes payable     195,347                   195,347  
Advances from customers     5,859                   5,859  
Total Current Liabilities     384,600                   384,600  
                             
Total Liabilities     384,600                   384,600  
                             
Stockholders' Equity                            
Common stock, $0.0001 par value; 100,000,000 shares authorized, 49,929,000 shares issued and outstanding as of March 31, 2016.     4,993                   4,993  
Additional paid-in-capital     7,875,621                   7,875,621  
Accumulated deficit     (6,651,100 )     (49,158 )         (6,700,258 )
Accumulated other comprehensive income     462,988       (9,643 )         453,345  
Total stockholder's equity - controlling interest     1,692,502       (58,801 )         1,633,701  
Non-controlling interest     -       -           -  
Total Stockholders' Equity     1,692,502       (58,801 )         1,633,701  
Total Liabilities and Stockholders' Equity   $ 2,077,102     $ (58,801 )       $ 2,018,301  

  

QPAGOS

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For The Three Months Ended March 31, 2016

 

    As                  
    Previously               As  
    Reported     Adjustments     Notes   Restated  
                       
Revenues                            
Airtime   $ 497,985     $           $ 497,985  
Kiosk sales     130,972                   130,972  
Commissions on services     977                   977  
      629,934       -           629,934  
                             
Cost of Goods Sold                            
Airtime     483,885                   483,885  
Kiosk sales     113,357                   113,357  
Depreciation - kiosks     -       9,633     (A)     9,633  
Other     12,046                   12,046  
      609,288       9,633           618,921  
                             
Gross (Loss) Profit     20,646       (9,633 )         11,013  
                             
General and administrative     2,693,703                   2,693,703  
Depreciation and amortization     19,345       (2,106 )   (A)     17,239  
Total Expense     2,713,048       (2,106 )         2,710,942  
Loss from Operations     (2,692,402 )     (7,527 )         (2,699,929 )
                             
Other (expense) income     2,999                   2,999  
Interest expense, net     (2,992 )                 (2,992 )
Foreign currency gain     30,984       -           30,984 )
Loss before Provision for Income Taxes     (2,661,411 )     (7,527 )         (2,668,938 )
                             
Provision for Income Taxes     -       -           -  
                             
Net Loss     (2,661,411 )     (7,527 )         (2,668,938 )
                             
Net loss attributable to non-controlling interest     -       -           -  
                             
Net Loss Attributable to Controlling Interest   $ (2,661,411 )   $ (7,527 )       $ (2,668,938 )
                             
Net Loss Per Share -  Basic and Diluted   $ (0.06 )               $ (0.06 )
                             
Weighted Average Number of Shares Outstanding -  Basic and Diluted     42,895,154                   42,895,154  
                             
Other Comprehensive Income                            
Foreign currency translation adjustment     42,982       3,792           46,774  
                             
Total Comprehensive Loss     (2,618,429 )     (3,735 )         (2,622,164 )
                             
Comprehensive loss attributable to non-controlling interest     -       -           -  
                             
Comprehensive Loss Attributable to Controlling Interest   $ (2,618,429 )   $ (3,735 )       $ (2,622,164 )

 

QPAGOS

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For The Three Months Ended March 31, 2016

 

    As                  
    Previously               As  
    Reported     Adjustments     Notes   Restated  
CASH FLOWS FROM OPERATING ACTIVITIES:                            
Net loss attributable to the company   $ (2,661,411 )   $ (7,527 )   (A)   $ (2,668,938 )
Less: loss attributable to non-controlling interest     -                   -  
Net loss     (2,661,411 )     (7,527 )         (2,668,938 )
Adjustment to reconcile net loss to net cash used in operating activities:                            
Depreciation expense     8,415       7,473     (A)     15,888  
Amortization expense     10,930       54     (A)     10,984  
Equity based compensation charge     108,000                   108,000  
Shares issued for services     2,032,275                   2,032,275  
Non- cash investment in affiliates     (3,000 )                 (3,000 )
Other foreign currency movements     -       (3,792 )   (A)     (3,792 )
Changes in Assets and Liabilities                            
Accounts receivable     (155,999 )                 (155,999 )
Inventory     115,308                   115,308  
Recoverable IVA taxes and credits     (109,700 )                 (109,700 )
Prepayments     (17,408 )                 (17,408 )
Other assets     (68 )                 (68 )
Accounts payable and accrued expenses     38,711                   38,711  
IVA and other taxes payable     3,303                   3,303  
Advances from customers     3,873                   3,873  
Interest accruals     2,992                   2,992  
CASH USED IN OPERATING ACTIVITIES     (623,779 )     (3,792 )         (627,571 )
                             
CASH FLOWS FROM INVESTING ACTIVITIES:                            
Purchase of property and equipment     (454 )                 (454 )
NET CASH USED IN INVESTING ACTIVITIES     (454 )     -           (454 )
                             
CASH FLOWS FROM FINANCING ACTIVITIES:                            
Proceeds from loans payable     -                   -  
NET CASH PROVIDED BY FINANCING ACTIVITIES     -       -           -  
                             
Effect of exchange rate changes on cash and cash equivalents     42,982       3,792           46,774  
                             
NET DECREASE IN CASH     (581,251 )     -           (581,251 )
CASH AT BEGINNING OF PERIOD     832,159                   832,159  
CASH AT END OF PERIOD   $ 250,908     $ -         $ 250,908  

 

NOTES

 

  A. To correct an error in classifying kiosks acquired in 2015 as inventory and available for sale, to property and equipment, along with the recording of related accumulated depreciation and depreciation expense.
  3 RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

 

Organization – Reverse Merger

 

The reverse merger recapitalization upon the acquisition of Qpagos S.A.P.I de C.V. and Redpag S.A.P.I de C.V. were originally pushed back to the earliest period presented, this has been restated to the reflect the position at the date of the reverse merger recapitalization, August 31, 2015. The statement of operations and comprehensive loss, the Statement of Cash Flows and the balance sheet has been restated to eliminate the effects of pushing back the reverse merger transactions to the opening balance of the earliest period presented.

 

Fixed Assets

 

The Company reclassified certain kiosk assets used in the production of income, previously recorded in inventory as fixed assets and applied an appropriate depreciation policy to these kiosks.

 

The restated Consolidated Balance Sheet as of December 31, 2015, the related Consolidated Statements of Operations and Comprehensive loss and the Statement of Cash Flows for the year ended December 31, 2015, is presented below:

 

QPAGOS CORPORATION

CONSOLIDATED BALANCE SHEET

December 31, 2015

  

    As                  
    Previously               As  
    Reported     Adjustments     Notes   Restated  
Assets                            
                             
Current Assets                            
Cash   $ 832,159                 $ 832,159  
Accounts receivable     242,075                   242,075  
                             
Inventory     668,567       (279,746 )   (A)     388,821  
Recoverable IVA taxes and credits     417,897                   417,897  
Prepayments     52,014                   52,014  
Total Current Assets     2,212,712       (279,746 )         1,932,966  
                             
Non-Current Assets                            
Plant and equipment, net     70,537       229,851     (A)     300,388  
Intangibles, net     211,417                   211,417  
Other assets     11,712                   11,712  
Total Non-Current Assets     293,666       229,851           523,517  
Total Assets   $ 2,506,378     $ (49,895 )       $ 2,456,483  
                             
Liabilities and Stockholders' Equity (Deficit)                            
                             
Current Liabilities                            
Accounts payable   $ 38,372                 $ 38,372  
Notes payable     103,320                   103,320  
IVA and other taxes payable     192,044                   192,044  
Advances from customers     1,986                   1,986  
Total Current Liabilities     335,722       -           335,722  
                             
Total Liabilities     335,722       -           335,722  
                             
Stockholders' Equity (Deficit)                            
Common stock, $0.001 par value; 50,000,000 shares authorized, 22,392,000 and 4,619,314 shares issued and outstanding as of December 31, 2015 and 2014, respectively.     4,478                   4,478  
Additional paid-in-capital     5,735,861                   5,735,861  
Accumulated deficit     (3,989,689 )     (36,459 )         (4,026,148 )
Accumulated other comprehensive income     420,006       (13,436 )         406,570  
Total stockholder's equity (deficit) - controlling interest     2,170,656       (49,895 )         2,120,761  
Non-controlling interest     -       -           -  
Total Stockholders' Equity (Deficit)     2,170,656       (49,895 )         2,120,761  
Total Liabilities and Stockholders' Equity (Deficit)   $ 2,506,378     $ (49,895 )       $ 2,456,483  

 

QPAGOS

CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

Year Ended December 31, 2015

 

    As                  
    Previously               As  
    Reported     Adjustments     Notes   Restated  
                       
Revenues                            
Airtime   $ 739,894                 $ 739,894  
Kiosk sales     321,239                   321,239  
Commissions on services     66,674                   66,674  
Other     137                   137  
      1,127,944       -           1,127,944  
                             
Cost of Goods Sold                            
Airtime     710,155                   710,155  
Kiosk sales     369,909                   369,909  
Depreciation - kiosks     -       35,496     (A)     35,496  
Other     40,172                   40,172  
      1,120,236       35,496           1,155,732  
                             
Gross (Loss) Profit     7,708       (35,496 )         (27,788 )
                             
General and administrative     2,000,714       779,862     (B)     2,780,576  
Depreciation and amortization     37,810       (5,459 )   (A)     32,351  
Total Expense     2,038,524       774,403         2,812,927  
Loss from Operations     (2,030,816 )     (809,899 )         (2,840,715 )
                             
Other (expense) income     203                   203  
Interest expense, net     (2,241 )                 (2,241 )
Foreign currency loss     (466,920 )     -           (466,920 )
Loss before Provision for Income Taxes     (2,499,774 )     (809,899 )         (3,309,673 )
                             
Provision for Income Taxes     -       -           -  
                             
Net Loss     (2,499,774 )     (809,899 )         (3,309,673 )
                             
Net loss attributable to non-controlling interest     -       -           -  
                             
Net Loss Attributable to Controlling Interest   $ (2,499,774 )   $ (809,899 )       $ (3,309,673 )
                             
Net Loss Per Share -  Basic and Diluted   $ (0.10 )               $ (0.13 )
                             
Weighted Average Number of Shares Outstanding -  Basic and Diluted     25,698,747                   25,698,747  
                             
Other Comprehensive Income                            
Foreign currency translation adjustment     267,257       (13,436 )         253,821  
                             
Total Comprehensive Loss     (2,232,517 )     (823,335 )         (3,055,852 )
                             
Comprehensive loss attributable to non-controlling interest     -       -           -  
                             
Comprehensive Loss Attributable to Controlling Interest   $ (2,232,517 )   $ (823,335 )       $ (3,055,852 )

 

QPAGOS

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended December 31, 2015

 

    As                  
    Previously               As  
    Reported     Adjustments     Notes   Restated  
CASH FLOWS FROM OPERATING ACTIVITIES:                            
Net loss attributable to the company   $ (2,499,774 )   $ (809,899 )       $ (3,309,673 )
Less: loss attributable to non-controlling interest     -                   -  
Net loss     (2,499,774 )     (809,899 )         (3,309,673 )
Adjustment to reconcile net loss to net cash used in operating activities:                            
Depreciation expense     34,227       30,037     (A)     64,264  
Amortization expense     3,583                   3,583  
Equity based compensation charge     166,715       121,285     (B)     288,000  
Shares issued for services     -       658,577     (B)     658,577  
Other foreign currency movements     -       13,436     (A)     13,436  
Changes in Assets and Liabilities                            
Accounts receivable     (226,161 )                 (226,161 )
Inventory     (21,581 )                 (21,581 )
Recoverable IVA taxes and credits     (246,697 )                 (246,697 )
Prepayments     (2,014 )                 (2,014 )
Other assets     (5,520 )                 (5,520 )
Accounts payable and accrued expenses     (64,129 )                 (64,129 )
IVA and other taxes payable     183,689                   183,689  
Advances from customers     (1,106 )                 (1,106 )
Interest accruals     3,320                   3,320  
CASH USED IN OPERATING ACTIVITIES     (2,675,448 )     13,436           (2,662,012 )
                             
CASH FLOWS FROM INVESTING ACTIVITIES:                            
Purchase of property and equipment     (4,779 )                 (4,779 )
Intangible assets     (215,000 )                 (215,000 )
NET CASH USED IN INVESTING ACTIVITIES     (219,779 )     -           (219,779 )
                             
CASH FLOWS FROM FINANCING ACTIVITIES:                            
Proceeds on common stock issued     2,990,000                   2,990,000  
Share issue expenses     (388,700 )                 (388,700 )
Proceeds from loans payable     685,001                   685,001  
NET CASH PROVIDED BY FINANCING ACTIVITIES     3,286,301       -           3,286,301  
                             
Effect of exchange rate changes on cash and cash equivalents     267,257       (13,436 )         253,821  
                             
NET INCREASE IN CASH     658,331       -           658,331  
CASH AT BEGINNING OF PERIOD     173,828                   173,828  
CASH AT END OF PERIOD   $ 832,159     $ -         $ 832,159  
                             
CASH PAID FOR INTEREST AND TAXES:                            
Cash paid for income taxes   $ -     $ -         $ -  
Cash paid for interest   $ -     $ -         $ -  
                             
NON-CASH INVESTING AND FINANCING ACTIVITIES                            
Conversion of debt to equity   $ 2,909,423     $ -         $ 2,909,423  

  

NOTES

 

  A. To correct an error in classifying kiosks acquired in 2015 as  inventory and available for sale,  to property and equipment, along with the recording of related accumulated depreciation and depreciation expense.

  B. To correct an error in the period in which the payment of equity based compensation to Officers of the Company and certain consultants was recorded. The Company initially charged the fair value equity compensation of the Company’s common shares issued to Officers and consultants as a reduction in the accumulated deficit as of January 1, 2014. The common shares were issued pursuant to agreements executed in 2015. The correction reclassifies the equity based compensation expense to the year ended December 31, 2015.