RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2017

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 as of June 30, 2016 and the related Consolidated Statements of Operations and Comprehensive loss and the Statement of Cash Flows for the three and six months ended June 30, 2016, is presented below:

QPAGOS

CONDENSED CONSOLIDATED BALANCE SHEET

June 30, 2016

	As
	Previously							As
	Reported			Adjustments			Notes	Restated
	(Unaudited)							(Unaudited)
Assets
Current Assets
Cash	$	135,060						$	135,060
Accounts receivable		387,667							387,667
Inventory		508,441			(244,483	)	(A)		263,958
Recoverable IVA taxes and credits		342,084							342,084
Other current assets		24,745							24,745
Total Current Assets		1,397,997			(244,483	)			1,153,514
Non-Current Assets
Plant and equipment, net		53,800			196,166		(A)		249,966
Intangibles, net		189,917							189,917
Investment		3,000							3,000
Other assets		12,131							12,131
Total Non-Current Assets		258,848			196,166				455,014
Total Assets	$	1,656,845		$	(48,317	)		$	1,608,528
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	142,185						$	142,185
Notes payable		109,307							109,307
IVA and other taxes payable		88,195							88,195
Advances from customers		70,342							70,342
Total Current Liabilities		410,029			—				410,029
Total Liabilities		410,029			—				410,029
Stockholders’ Equity
Common stock, $0.0001 par value; 100,000,000 shares authorized, 55,254,000 shares issued and outstanding as of June 30, 2016.		5,526							5,526
Additional paid-in-capital		8,134,541							8,134,541
Accumulated deficit		(7,405,415	)		(56,176	)			(7,461,591	)
Accumulated other comprehensive income		512,164			7,859				520,023
Total stockholder’s equity - controlling interest		1,246,816			(48,317	)			1,198,499
Non-controlling interest		—			—				—
Total Stockholders’ Equity		1,246,816			(48,317	)			1,198,499
Total Liabilities and Stockholders’ Equity	$	1,656,845		$	(48,317	)		$	1,608,528

QPAGOS

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30, 2016

	As
	Previously							As
	Reported			Adjustments			Notes	Restated
Revenues
Sales of services	$	595,317		$				$	595,317
Kiosk sales		18,351							18,351
Payment processing fees		12,602							12,602
Other		146							146
		626,416			—				626,416
Cost of Goods Sold
Sales of services		581,314							581,314
Kiosk sales		10,311							10,311
Depreciation - kiosks					9,590		(A)		9,590
Other		6,022							6,022
		597,647			9,590				607,237
Gross Profit		28,769			(9,590	)			19,179
General and administrative		615,936			(434	)	(A)		615,502
Depreciation and amortization		19,345			(2,135	)	(A)		17,210
Total Expense		635,281			(2,569	)			632,712
Loss from Operations		(606,512	)		(7,021	)			(613,533	)
Other income		1,016							1,016
Interest expense, net		(2,992	)						(2,992	)
Foreign currency loss		(145,827	)						(145,827	)
Loss before Provision for Income Taxes		(754,315	)		(7,021	)			(761,336	)
Provision for Income Taxes		—			—				—
Net Loss		(754,315	)		(7,021	)			(761,336	)
Net loss attributable to non-controlling interest		—							—
Net Loss Attributable to Controlling Interest	$	(754,315	)	$	(7,021	)		$	(761,336	)
Net Loss Per Share - Basic and Diluted	$	(0.01	)	$	0.00			$	(0.01	)
Weighted Average Number of Shares Outstanding - Basic and Diluted		52,762,601			52,762,601				52,762,601
Other Comprehensive Income
Foreign currency translation adjustment		49,176			17,502				66,678
Total Comprehensive loss		(705,139	)		10,481				(694,658	)
Comprehensive loss attributable to non-controlling interest		—			—				—
Comprehensive Loss Attributable to Controlling Interest	$	(705,139	)	$	10,481			$	(694,658	)

QPAGOS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Six Months Ended June 30, 2016

	As
	Previously							As
	Reported			Adjustments			Notes	Restated
Revenues
Sales of services	$	1,093,301		$				$	1,093,301
Kiosk sales		149,323							149,323
Payment processing fee		13,580							13,580
Other		146							146
		1,256,350			—				1,256,350
Cost of Goods Sold
Sales of services		1,065,200							1,065,200
Kiosk sales		123,668							123,668
Depreciation - kiosks		—			19,222		(A)		19,222
Other		18,068							18,068
		1,206,936			19,222				1,226,158
Gross Profit		49,414			(19,222	)			30,192
General and administrative		3,309,638			(434	)	(A)		3,309,204
Depreciation and amortization		38,690			(4,241	)	(A)		34,449
Total Expense		3,348,328			(4,675	)			3,343,653
Loss from Operations		(3,298,914	)		(14,547	)			(3,313,461	)
Other income		4,015							4,015
Interest expense, net		(5,984	)						(5,984	)
Foreign currency loss		(114,843	)						(114,843	)
Loss before Provision for Income Taxes		(3,415,726	)		(14,547	)			(3,430,273	)
Provision for Income Taxes		—			—				—
Net Loss		(3,415,726	)		(14,547	)			(3,430,273	)
Net loss attributable to non-controlling interest		—							—
Net Loss Attributable to Controlling Interest	$	(3,415,726	)	$	(14,547	)		$	(3,430,273	)
Net Loss Per Share - Basic and Diluted	$	(0.06	)	$	0.00			$	(0.06	)
Weighted Average Number of Shares Outstanding - Basic and Diluted		53,660,993			53,660,993				53,660,993
Other Comprehensive Income
Foreign currency translation adjustment		92,158			21,295				113,453
Total Comprehensive loss		(3,323,568	)		6,748				(3,316,820	)
Comprehensive loss attributable to non-controlling interest		—			—				—
Comprehensive Loss Attributable to Controlling Interest	$	(3,323,568	)	$	6,748			$	(3,316,820	)

QPAGOS

CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2016

	As
	Previously							As
	Reported			Adjustments			Notes	Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to the company	$	(3,415,726	)	$	(14,547	)	(A)	$	(3,430,273	)
Less: loss attributable to non-controlling interest		—							—
Net loss		(3,415,726	)		(14,547	)			(3,430,273	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation expense		17,190			14,547		(A)		31,737
Amortization expense		21,500							21,500
Equity based compensation charge		144,000							144,000
Shares issued for services		2,032,274							2,032,274
Non- cash investment in affiliates		(3,000	)						(3,000	)
Other foreign currency movements		—			(21,295	)	(A)		(21,295	)
Changes in Assets and Liabilities
Accounts receivable		(145,592	)						(145,592	)
Inventory		160,126							160,126
Recoverable IVA taxes and credits		75,813							75,813
Other current assets		33,298							33,298
Other assets		(419	)						(419	)
Accounts payable and accrued expenses		94,783							94,783
IVA and other taxes payable		(103,849	)						(103,849	)
Advances from customers		68,357							68,357
Interest accruals		5,987							5,987
CASH USED IN OPERATING ACTIVITIES		(1,015,258	)		(21,295	)			(1,036,553	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(453	)						(453	)
NET CASH USED IN INVESTING ACTIVITIES		(453	)		—				(453	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds on common stock issued		225,000							225,000
Proceeds from loans payable		—							—
NET CASH PROVIDED BY FINANCING ACTIVITIES		225,000			—				225,000
Effect of exchange rate changes on cash and cash equivalents		92,158			21,295				113,453
NET DECREASE IN CASH		(698,552	)						(698,552	)
CASH AT BEGINNING OF PERIOD		833,612							833,612
CASH AT END OF PERIOD	$	135,060		$	—			$	135,060
CASH PAID FOR INTEREST AND TAXES:
Cash paid for income taxes	$	—		$	—			$	—
Cash paid for interest	$	—		$	—			$	—

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.