Attached files

file filename
EX-31.2 - EX-31.2 - MoneyOnMobile, Inc.clpi-20140930ex3123f34bb.htm
EX-32.2 - EX-32.2 - MoneyOnMobile, Inc.clpi-20140930ex3226dabf0.htm
EX-32.1 - EX-32.1 - MoneyOnMobile, Inc.clpi-20140930ex32152dfd3.htm
EX-31.1 - EX-31.1 - MoneyOnMobile, Inc.clpi-20140930ex3118ac7b9.htm
EXCEL - IDEA: XBRL DOCUMENT - MoneyOnMobile, Inc.Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q  

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2014

 

Commission File No. 000-53997

 

picture

 

CALPIAN, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

Texas

 

20-8592825

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

500 North Akard Street Suite 2850, Dallas, TX  75201

(Address of principal executive offices)

 

214-758-8600

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Exchange Act

None

 

Securities registered pursuant to Section 12(g) of the Exchange Act

Common Stock, Par Value $.001 Per Share

(Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes   No 

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes   No 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No     

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes    No    

 


 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S‑K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer           Accelerated filer           Non-accelerated filer            Smaller reporting company      

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   No 

 

The number of shares outstanding of the registrant’s common stock as of November 13, 2014 was 40,332,615.

 


 

TABLE OF CONTENTS 

 

 

 

 

 

 

 

 

 


 

 

 

 

INTRODUCTORY COMMENT

 

In this Quarterly Report on Form 10-Q,  references to “Calpian,” “Company,” “we,” “us,” and “our” collectively refers to Calpian, Inc., its wholly-owned United States subsidiary, Calpian Commerce, Inc. (“Calpian Commerce”), and its partially-owned joint venture, Calpian Residual Acquisition, L.L.C, and partially-owned Indian Money-on-Mobile enterprise, which includes Digital Payment Processing Limited, My Mobile Payments Limited and Payblox Technologies (India) Private Limited, unless otherwise noted.  All intercompany accounts and transactions have been eliminated in the accompanying consolidated financial statements of the Company.

 

 

FORWARD-LOOKING STATEMENTS

 

When used in this Report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “intend,” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding events, conditions and financial trends which may affect the Company’s future plans of operations, business strategy, operating results, and financial position. Such statements are not guarantees of future performance and are subject to risks and uncertainties and actual results may differ materially from those included within the forward-looking statements for various reasons, including those identified under “Risk Factors.”  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made.  Except as required under federal securities laws and the rules and regulations of the United States Securities and Exchange Commission, the Company does not undertake, and specifically declines, any obligation to update any of these statements or to publicly announce the results of any revisions to any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions, or otherwise.

 

 

 

3

 


 

 

 

PART I – FINANCIAL INFORMATION

 

ITEM  1FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

CALPIAN, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

Unaudited

 

Audited

 

September 30, 2014

 

March 31, 2014

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and equivalents 

$

1,985,441 

 

$

8,078,505 

Accounts receivable 

 

1,451,684 

 

 

1,194,117 

Restricted cash 

 

51,607 

 

 

52,994 

Inventory 

 

3,024,815 

 

 

2,997,872 

Other current assets 

 

1,265,274 

 

 

1,758,270 

 Total current assets

 

7,778,821 

 

 

14,081,758 

Property and equipment  

 

4,055,158 

 

 

398,958 

Residual portfolios  

 

9,470,827 

 

 

9,095,133 

Equity investments

 

465,953 

 

 

301,680 

Deferred financing costs  

 

216,084 

 

 

324,126 

Goodwill  

 

21,619,870 

 

 

21,619,870 

Other intangible assets, at cost  

 

1,326,248 

 

 

1,351,965 

Other non-current assets  

 

1,161,772 

 

 

958,196 

  Total assets

$

46,094,733 

 

$

48,131,686 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY  

 

 

 

 

 

Current Liabilities  

 

 

 

 

 

Accounts payable

$

765,065 

 

$

985,616 

Accrued liabilities

 

1,198,024 

 

 

1,553,247 

Related party payables

 

623,092 

 

 

766,782 

Current portion of long-term debt

 

4,136,461 

 

 

7,260,800 

Deferred revenues

 

431,504 

 

 

595,929 

Total current liabilities

 

7,154,146 

 

 

11,162,374 

Long-term debt

 

15,517,145 

 

 

13,374,296 

Other non-current liabilities

 

208,859 

 

 

214,836 

Total liabilities

 

22,880,150 

 

 

24,751,506 

 

 

 

 

 

 

Shareholders' Equity (Note 12)  

 

 

 

 

 

Preferred stock 

 

 -

 

 

1,000,000 

Common stock 

 

38,909 

 

 

29,022 

Stock subscribed 

 

1,424 

 

 

7,056 

Additional paid-in capital 

 

34,372,306 

 

 

29,494,797 

Accumulated deficit 

 

(17,920,946)

 

 

(15,382,512)

Noncontrolling interest 

 

6,022,162 

 

 

7,230,120 

Cumulative other comprehensive income 

 

700,728 

 

 

1,001,697 

 Total shareholders' equity

 

23,214,583 

 

 

23,380,180 

 Total liabilities and shareholders' equity

$

46,094,733 

 

$

48,131,686 

 

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

 

4

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CALPIAN, INC. AND SUBSIDIARIES

CONSOLIDATED (UNAUDITED) STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 

 

Three Months Ended

 

Six Months Ended

 

September 30,

 

September 30,

 

2014

 

2013

 

2014

 

2013

Revenues

 

 

 

 

 

 

 

 

 

 

 

Residual portfolios

$

1,131,692 

 

$

955,501 

 

$

2,151,845 

 

$

1,989,865 

Processing fees

 

4,469,432 

 

 

5,062,802 

 

 

9,082,753 

 

 

10,019,326 

Money-on-Mobile

 

53,223,161 

 

 

 -

 

 

93,384,070 

 

 

 -

Other

 

396,414 

 

 

342,909 

 

 

841,305 

 

 

1,004,178 

Total revenues

 

59,220,699 

 

 

6,361,212 

 

 

105,459,973 

 

 

13,013,369 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

Residual portfolio amortization

 

272,969 

 

 

239,604 

 

 

581,432 

 

 

537,627 

Processing and servicing

 

3,797,948 

 

 

4,524,038 

 

 

7,676,952 

 

 

8,527,972 

Money-on-Mobile

 

52,637,887 

 

 

 -

 

 

92,392,209 

 

 

 -

Other

 

192,778 

 

 

284,671 

 

 

349,232 

 

 

375,427 

Total cost of revenues

 

56,901,582 

 

 

5,048,313 

 

 

100,999,825 

 

 

9,441,026 

Gross profit

 

2,319,117 

 

 

1,312,899 

 

 

4,460,148 

 

 

3,572,343 

General and administrative expenses

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages

 

2,151,905 

 

 

960,420 

 

 

3,641,588 

 

 

1,969,003 

Selling, general and administrative

 

2,456,297 

 

 

1,215,297 

 

 

5,275,154 

 

 

2,754,655 

Depreciation and amortization

 

159,091 

 

 

30,030 

 

 

303,582 

 

 

56,374 

Total general and administrative

 

4,767,293 

 

 

2,205,747 

 

 

9,220,324 

 

 

4,780,032 

Operating loss

 

(2,448,176)

 

 

(892,848)

 

 

(4,760,176)

 

 

(1,207,689)

Other income / (expenses)

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(746,036)

 

 

(765,168)

 

 

(1,621,498)

 

 

(1,514,595)

Equity investment gain / (loss)

 

7,189 

 

 

(1,286,062)

 

 

8,007 

 

 

(2,363,779)

Gain/ (loss) on sale of assets

 

2,855,737 

 

 

 -

 

 

2,859,709 

 

 

 -

Total other income/(expenses)

 

2,116,890 

 

 

(2,051,230)

 

 

1,246,218 

 

 

(3,878,374)

Net loss before income taxes

 

(331,286)

 

 

(2,944,078)

 

 

(3,513,958)

 

 

(5,086,063)

Income tax (expense) benefit

 

13,191 

 

 

 -

 

 

13,191 

 

 

 -

Net loss

 

(318,095)

 

 

(2,944,078)

 

 

(3,500,767)

 

 

(5,086,063)

Less net loss attributable to noncontrolling interest

 

363,812 

 

 

 -

 

 

962,333 

 

 

 -

Net income / (loss) attributable to Calpian, Inc. shareholders

 

45,717 

 

 

(2,944,078)

 

 

(2,538,434)

 

 

(5,086,063)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

Currency translation adjustments

 

(247,396)

 

 

 -

 

 

(300,969)

 

 

 -

Total comprehensive loss

$

(565,491)

 

$

(2,944,078)

 

$

(3,801,736)

 

$

(5,086,063)

Comprehensive loss attributable to:

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interest

$

(434,948)

 

$

 -

 

$

(1,049,064)

 

$

 -

Calpian, Inc. shareholders

$

(130,543)

 

$

(2,944,078)

 

$

(2,752,672)

 

$

(5,086,063)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding,

 

 

 

 

 

 

 

 

 

 

 

Basic

 

38,884,201 

 

 

27,807,741 

 

 

38,394,636 

 

 

26,758,369 

Diluted effect of warrants

 

544,367 

 

 

 -

 

 

 -

 

 

 -

Diluted

 

39,428,568 

 

 

27,807,741 

 

 

38,394,636 

 

 

26,758,369 

Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.00 

 

$

(0.11)

 

$

(0.07)

 

$

(0.19)

Diluted

$

0.00 

 

$

(0.11)

 

$

(0.07)

 

$

(0.19)

 

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

 

 

5

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CALPIAN, INC. AND SUBSIDIARIES

CONSOLIDATED (UNAUDITED) STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

September 30,

 

2014

 

2013

OPERATING ACTIVITIES

 

 

 

 

 

Net loss

$

(3,500,767)

 

$

(5,086,063)

Adjustments to reconcile net loss to cash (used in) provided by operating activities

 

 

 

 

 

Equity investment loss (income)

 

(8,007)

 

 

2,363,779 

Deferred financing cost amortization

 

108,042 

 

 

108,042 

Residual portfolio amortization

 

581,432 

 

 

537,627 

Processing and servicing  - merchant portfolio amortization

 

514,981 

 

 

795,974 

Subordinated note discount amortization

 

199,740 

 

 

200,414 

Depreciation and amortization

 

303,582 

 

 

56,374 

Gain on sale of residual portfolio

 

(2,175,558)

 

 

 -

Management equity awards

 

710,014 

 

 

296,818 

Equity awards issued for services

 

96,499 

 

 

 -

Deferred consulting fee amortization

 

205,852 

 

 

183,013 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(257,567)

 

 

293,276 

Inventory

 

(26,939)

 

 

 -

Other assets

 

35,301 

 

 

(314,618)

Related party payables

 

(143,366)

 

 

 -

Accounts payable

 

(220,552)

 

 

217,676 

Accrued liabilities

 

(151,708)

 

 

813,132 

Interest payable

 

(209,249)

 

 

47,213 

Deferred revenue

 

(164,425)

 

 

 -

Other liabilities

 

7,280 

 

 

 -

Net cash (used in) provided by operating activities  

 

(4,095,415)

 

 

512,657 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Contribution to equity method - Money-on-Mobile

 

 -

 

 

(3,149,060)

Investment in equity method - Money-on-Mobile

 

(245,125)

 

 

 -

Contribution to other equity method investments

 

(163,847)

 

 

 -

Investment in residual portfolios

 

(3,093,400)

 

 

 -

Purchases of property and equipment

 

(1,469,200)

 

 

(126,446)

Proceed from sale of residual portfolio

 

3,800,000 

 

 

 -

Acquisition of intangible assets

 

(231,570)

 

 

 -

Net cash used in investing activities

 

(1,403,142)

 

 

(3,275,506)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Borrowings on senior notes

 

999,950 

 

 

 -

Borrowings on subordinated notes

 

 -

 

 

300,000 

Borrowings on notes payable

 

 -

 

 

 -

Payment on notes payable

 

(3,870,000)

 

 

(28,765)

Issuance of common stock and warrants

 

3,252,280 

 

 

2,778,104 

Return and cancellation of stock

 

(680,179)

 

 

 -

Change in restricted cash

 

1,386 

 

 

3,973 

Net cash (used in) provided by financing activities  

 

(296,563)

 

 

3,053,312 

 

 

 

 

 

 

Foreign currency effect on cash flows

 

(297,944)

 

 

 -

6

 


 

 

 

 

 

 

 

Net change in cash and equivalents  

 

(6,093,064)

 

 

290,463 

Cash and equivalents at beginning of period  

 

8,078,505 

 

 

585,717 

Cash and equivalents at end of period  

$

1,985,441 

 

$

876,180 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION

 

 

 

 

 

Bank financing purchase of fixed assets

 

2,254,500 

 

 

 -

Common stock issued to acquire equity investment

 

 -

 

 

1,504,074 

Stock and warrants for services

 

 -

 

 

480,000 

Common stock issued in exchange for residual portfolios

 

3,150 

 

 

14,880 

Warrants issued as part of debt and equity financings

 

257,000 

 

 

392 

Subordinated debt converted to common stock

 

300,000 

 

 

850,701 

Notes payable for insurance premiums

 

 -

 

 

65,600 

Non cash conversion of Series C preferred to common stock

 

1,000,000 

 

 

 -

Cancellation of common stock related to sale of residual portfolio

 

680,179 

 

 

 -

 

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

 

7

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CALPIAN, INC. AND SUBSIDIARIES

CONSOLIDATED (UNAUDITED) STATEMENTS OF SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

Series B Preferred

 

Series C Preferred

 

Common Stock

 

Subscribed Stock

 

Paid-in

 

Accumulated

 

Noncontrolling

 

Comprehensive

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Deficit

 

Interests

 

Income

 

Total

Balance, March 31, 2013

 -

 

$

 -

 

 -

 

$

 -

 

23,915,806 

 

$

23,915 

 

 -

 

$

 -

 

$

14,159,576 

 

$

(8,790,446)

 

$

 -

 

$

1,195 

 

 

5,394,241 

Acquisition of residual portfolios

 -

 

 

 -

 

 -

 

 

 -

 

10,941 

 

 

11 

 

 -

 

 

 -

 

 

14,869 

 

 

 -

 

 

 -

 

 

 -

 

 

14,880 

Contribution to Money-on-Mobile

 -

 

 

 -

 

 -

 

 

 -

 

1,248,670 

 

 

1,249 

 

 -

 

 

 -

 

 

1,502,825 

 

 

 -

 

 

 -

 

 

 -

 

 

1,504,074 

Fair value of noncontrolling interest in business combination

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

7,500,000 

 

 

 -

 

 

7,500,000 

Noncontrolling interest contribution

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

97,108 

 

 

 -

 

 

97,108 

Issuance of common stock

 -

 

 

 -

 

 -

 

 

 -

 

1,784,043 

 

 

1,784 

 

6,889,170 

 

 

6,889 

 

 

7,566,467 

 

 

 -

 

 

 -

 

 

 -

 

 

7,575,140 

Warrants issued in financing transactions

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

3,353,506 

 

 

 -

 

 

 -

 

 

 -

 

 

3,353,506 

Warrants exercised to common stock

 -

 

 

 -

 

 -

 

 

 -

 

391,920 

 

 

392 

 

 -

 

 

 -

 

 

(392)

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Conversion of debt to common stock

 -

 

 

 -

 

 -

 

 

 -

 

633,802 

 

 

633 

 

66,667 

 

 

67 

 

 

1,050,003 

 

 

 -

 

 

 -

 

 

 -

 

 

1,050,703 

Stock issued for services

 -

 

 

 -

 

 -

 

 

 -

 

622,835 

 

 

623 

 

100,000 

 

 

100 

 

 

937,401 

 

 

 -

 

 

 -

 

 

 -

 

 

938,124 

Stock-based compensation

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

360,005 

 

 

 -

 

 

 -

 

 

 -

 

 

360,005 

Issuance of Series B preferred stock

550,000 

 

 

550 

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

550,401 

 

 

 -

 

 

 -

 

 

 -

 

 

550,951 

Conversion of Series B to common stock

(550,000)

 

 

(550)

 

 -

 

 

 -

 

414,249 

 

 

414 

 

 -

 

 

 -

 

 

136 

 

 

 -

 

 

 -

 

 

 -

 

 

 -

Issuance of Series C preferred stock

 -

 

 

 -

 

1,000 

 

 

1,000,000 

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

1,000,000 

Net loss

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 

 

(6,592,066)

 

 

(366,988)

 

 

 -

 

 

(6,959,054)

Foreign currency translation adjustment

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

1,000,502 

 

 

1,000,502 

Balance, March 31, 2014

 -

 

$

 -

 

1,000 

 

$

1,000,000 

 

29,022,266 

 

$

29,021 

 

7,055,837 

 

$

7,056 

 

$

29,494,797 

 

$

(15,382,512)

 

$

7,230,120 

 

$

1,001,697 

 

$

23,380,180 

Issuance of common stock

 -

 

 

 -

 

 -

 

 

 -

 

9,607,850 

 

 

9,608 

 

(6,355,570)

 

 

(6,355)

 

 

2,561,593 

 

 

 -

 

 

 -

 

 

 -

 

 

2,564,846 

Warrants issued in financing transactions

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

944,435 

 

 

 -

 

 

 -

 

 

 -

 

 

944,435 

Conversion of debt to common stock

 -

 

 

 -

 

 -

 

 

 -

 

216,667 

 

 

217 

 

(66,667)

 

 

(67)

 

 

299,850 

 

 

 -

 

 

 -

 

 

 -

 

 

300,000 

Conversion of Series C to common stock

 -

 

 

 -

 

(1,000)

 

 

(1,000,000)

 

 -

 

 

 -

 

1,000,000 

 

 

1,000 

 

 

942,000 

 

 

 -

 

 

 -

 

 

 -

 

 

(57,000)

Stock issued for services

 -

 

 

 -

 

 -

 

 

 -

 

183,422 

 

 

183 

 

(100,000)

 

 

(100)

 

 

96,416 

 

 

 -

 

 

 -

 

 

 -

 

 

96,499 

Acquisition of residual portfolios

 -

 

 

 -

 

 -

 

 

 -

 

2,100 

 

 

 

 -

 

 

 -

 

 

3,148 

 

 

 -

 

 

 -

 

 

 -

 

 

3,150 

Stock-based compensation

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

710,014 

 

 

 -

 

 

 -

 

 

 -

 

 

710,014 

Canceled stock

 -

 

 

 -

 

 -

 

 

 -

 

(123,290)

 

 

(123)

 

(110,000)

 

 

(110)

 

 

(679,946)

 

 

 -

 

 

 -

 

 

 -

 

 

(680,179)

Purchase of DPPL shares from noncontrolling shareholder

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

(265,875)

 

 

 -

 

 

(265,875)

Issuance of MMPL shares to noncontrolling shareholders

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

20,250 

 

 

 -

 

 

20,250 

Net loss

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 

 

(2,538,434)

 

 

(962,333)

 

 

 -

 

 

(3,500,767)

Foreign currency translation adjustment

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

(300,969)

 

 

(300,969)

Balance, September 30, 2014

 -

 

 

 -

 

 -

 

 

 -

 

38,909,015 

 

 

38,909 

 

1,423,600 

 

 

1,424 

 

 

34,372,306 

 

 

(17,920,946)

 

 

6,022,163 

 

 

700,728 

 

 

23,214,583 

 

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

 

8

 


 

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1 - OVERVIEW

 

Basis of Presentation

In these consolidated financial statements, references to “Calpian,” “Company,” “we,” “us,” and “our” collectively refers to Calpian, Inc., its wholly-owned United States subsidiary, Calpian Commerce, Inc. (“Calpian Commerce”), and its partially-owned joint venture, Calpian Residual Acquisition, L.L.C, and partially-owned Indian Money-on-Mobile enterprise, which includes Digital Payment Processing Limited, My Mobile Payments Limited and Payblox Technologies (India) Private Limited, unless otherwise noted.  All intercompany accounts and transactions have been eliminated in the accompanying consolidated financial statements of the Company.

 

The Company

Calpian, Inc., a Texas corporation headquartered in Dallas, Texas, was incorporated on May 30, 2006, as Toyzap.com, Inc., and became a public company on May 7, 2008, through a self-underwritten registered public offering of 4,000,000 shares of $.001 par value common stock.  The offering raised $150,000 that was used to pursue a business strategy that never commenced operations.  The “shell company”, Toyzap.com, Inc., was acquired by members of the Company’s current management team, affiliates thereof, and certain other purchasers, on April 23, 2010, pursuant to purchase agreements whereby approximately 99% of the Company’s then issued and outstanding common stock was acquired.  At such time, the former management and Board of Directors resigned and a new management team and Board of Directors were appointed, who then redirected the business focus of the Company to the business plan described below.  On September 3, 2010, the Company changed its name to “Calpian, Inc.” pursuant to approval obtained at a meeting of our shareholders.  The Company’s common stock began trading in the over the counter (“OTC”) market on March 4, 2009, and it currently trades there under the symbol “CLPI.”

 

In March 2012, the Company began to acquire equity interests in Digital Payments Processing Limited (“DPPL”), a newly-organized company.  DPPL maintains an exclusive services agreement with My Mobile Payments Limited (“Money-on-Mobile”).  Both companies are organized under the laws of India and headquartered in Mumbai, India.  Money-on-Mobile is a contractual variable interest entity of DPPL.  As of September  30, 2014, the Company has acquired 72.9% of the outstanding common stock of DPPL.  The Company and DPPL have entered into an agreement by which the Company intends to acquire additional shares of common stock of DPPL to increase its equity percentage to 74% for an additional investment amount to be negotiated as future investments are made.  The acquisition of additional shares is subject to approval by the Indian government and regulations for foreign investment.  Additionally, Payblox Technologies (India) Private Limited (“Payblox”), a wholly owned subsidiary of Money-on-Mobile, organized in October 2010 under the laws of India and headquartered in Mumbai, India, provides certain back office and support services on behalf of Money-on-Mobile to its customer base.

 

In March 2013, the Company formed a wholly-owned subsidiary, Calpian Commerce, Inc. (“Calpian Commerce”), to own and operate certain assets and liabilities of Pipeline Data, Inc. and its subsidiaries acquired in exchange for a cash payment of $9.75 million.  The acquisition was financed by expanding the Company's senior credit facility from $5 million to $14.5 million.

 

Business Segments

Calpian includes three distinct business units: residual portfolios, merchant payment processing services and its Money-on-Mobile enterprise.

 

Residual portfolios

Small and medium-sized retail merchants typically buy credit card processing and acquiring services from independent sales organizations (“ISOs”). ISOs are sales agents authorized by one or more credit card processors to sell processing and acquiring services on their behalf.  ISOs facilitate the merchant’s application for processing and acquiring services through approvals, credit checks, guarantees, etc. that are required before the merchant can be approved to accept consumer credit card payments.  ISOs then receive payments from the processor, as a commission, based on a percentage of future credit card transaction dollars that are processed on behalf of those merchants gathered by the ISO.  These future payment streams paid to the ISO by the processor are called residuals.  We purchase portfolios of