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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 December 31, 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 February 13, 2015 was 40,607,615.


 

 

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

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

Unaudited

 

 

 

December 31, 2014

 

March 31, 2014

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and equivalents 

$

852,656 

 

$

8,078,505 

Accounts receivable 

 

1,633,796 

 

 

1,194,117 

Restricted cash 

 

51,494 

 

 

52,994 

Inventory 

 

2,646,977 

 

 

2,997,872 

Other current assets 

 

1,045,259 

 

 

1,758,270 

 Total current assets

 

6,230,182 

 

 

14,081,758 

Property and equipment  

 

4,023,656 

 

 

398,958 

Residual portfolios  

 

9,036,720 

 

 

9,095,133 

Equity investments

 

472,299 

 

 

301,680 

Deferred financing costs  

 

162,063 

 

 

324,126 

Goodwill  

 

21,619,870 

 

 

21,619,870 

Other intangible assets, at cost  

 

1,365,576 

 

 

1,351,965 

Other non-current assets  

 

1,163,204 

 

 

958,196 

  Total assets

$

44,073,570 

 

$

48,131,686 

 

 

 

 

 

 

LIABILITIES AND EQUITY  

 

 

 

 

 

Current Liabilities  

 

 

 

 

 

Accounts payable

$

1,095,070 

 

$

985,616 

Accrued liabilities

 

1,184,571 

 

 

1,553,247 

Related party payables

 

653,044 

 

 

766,782 

Current portion of long-term debt

 

2,647,410 

 

 

7,260,800 

Deferred revenues

 

526,080 

 

 

595,929 

Total current liabilities

 

6,106,175 

 

 

11,162,374 

Long-term debt

 

16,548,546 

 

 

13,374,296 

Other non-current liabilities

 

138,723 

 

 

214,836 

Total liabilities

 

22,793,444 

 

 

24,751,506 

 

 

 

 

 

 

Equity (Note 12)  

 

 

 

 

 

Preferred stock 1,000,000 shares authorized, zero and 1,000 shares issued and outstanding as of December 31, 2014 and  March 31, 2014, respectively

 

 -

 

 

1,000,000 

Common stock 200,000,000 shares authorized, 38,799,015 and 29,022,266 shares issued and outstanding as of December 31, 2014 and  March 31, 2014, respectively

 

38,799 

 

 

29,022 

Stock subscribed 1,533,600 and 7,055,837 shares issued and outstanding as of December 31, 2014 and  March 31, 2014, respectively

 

1,534 

 

 

7,056 

Additional paid-in capital 

 

34,919,419 

 

 

29,494,797 

Accumulated deficit 

 

(19,659,670)

 

 

(15,382,512)

Cumulative other comprehensive income 

 

495,250 

 

 

1,001,697 

Total Calpian, Inc Shareholders’ Equity

 

15,795,332 

 

 

16,150,060 

Noncontrolling interest 

 

5,484,794 

 

 

7,230,120 

 Total equity

 

21,280,126 

 

 

23,380,180 

 Total liabilities and equity

$

44,073,570 

 

$

48,131,686 

 

 

 

 

 

 

 

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

 

4

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CALPIAN, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

 

 

Three Months Ended

 

Nine Months Ended

 

December 31,

 

December 31,

 

2014

 

2013

 

2014

 

2013

Revenues

 

 

 

 

 

 

 

 

 

 

 

Residual portfolios

$

868,649 

 

$

919,422 

 

$

3,020,494 

 

$

2,909,287 

Processing fees

 

4,407,484 

 

 

4,764,188 

 

 

13,490,237 

 

 

14,783,514 

Money-on-Mobile

 

57,732,749 

 

 

 -

 

 

151,116,819 

 

 

 -

Other

 

385,289 

 

 

606,102 

 

 

1,226,594 

 

 

1,610,280 

Total revenues

 

63,394,171 

 

 

6,289,712 

 

 

168,854,144 

 

 

19,303,081 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

Residual portfolio amortization

 

271,165 

 

 

322,747 

 

 

852,597 

 

 

860,374 

Processing and servicing

 

3,645,224 

 

 

3,743,204 

 

 

11,322,176 

 

 

12,271,176 

Money-on-Mobile

 

57,148,906 

 

 

 -

 

 

149,541,115 

 

 

 -

Other

 

195,340 

 

 

336,127 

 

 

544,572 

 

 

711,554 

Total cost of revenues

 

61,260,635 

 

 

4,402,078 

 

 

162,260,460 

 

 

13,843,104 

Gross profit

 

2,133,536 

 

 

1,887,634 

 

 

6,593,684 

 

 

5,459,977 

General and administrative expenses

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages

 

1,524,718 

 

 

1,052,607 

 

 

5,166,306 

 

 

3,021,610 

Selling, general and administrative

 

1,974,388 

 

 

1,709,177 

 

 

7,249,542 

 

 

4,463,832 

Depreciation and amortization

 

198,863 

 

 

33,965 

 

 

502,445 

 

 

90,339 

Total general and administrative

 

3,697,969 

 

 

2,795,749 

 

 

12,918,293 

 

 

7,575,781 

Operating loss

 

(1,564,433)

 

 

(908,115)

 

 

(6,324,609)

 

 

(2,115,804)

Other income / (expenses)

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(724,251)

 

 

(719,296)

 

 

(2,345,749)

 

 

(2,233,891)

Equity investment gain / (loss)

 

12,671 

 

 

(1,459,412)

 

 

20,678 

 

 

(3,823,191)

Gain/ (loss) on sale of assets

 

 -

 

 

 -

 

 

2,859,709 

 

 

 -

Total other income/(expenses)

 

(711,580)

 

 

(2,178,708)

 

 

534,638 

 

 

(6,057,082)

Net loss before income taxes

 

(2,276,013)

 

 

(3,086,823)

 

 

(5,789,971)

 

 

(8,172,886)

Income tax (expense) benefit

 

(79)

 

 

(1,156)

 

 

13,112 

 

 

(1,156)

Net loss

 

(2,276,092)

 

 

(3,087,979)

 

 

(5,776,859)

 

 

(8,174,042)

Less net loss attributable to noncontrolling interest

 

537,368 

 

 

 -

 

 

1,499,701 

 

 

 -

Net loss attributable to Calpian, Inc. shareholders

 

(1,738,724)

 

 

(3,087,979)

 

 

(4,277,158)

 

 

(8,174,042)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

Currency translation adjustments

 

(205,478)

 

 

 -

 

 

(506,447)

 

 

 -

Total comprehensive loss

$

(2,481,570)

 

$

(3,087,979)

 

$

(6,283,306)

 

$

(8,174,042)

Comprehensive loss attributable to:

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interest

$

(596,580)

 

$

 -

 

$

(1,645,644)

 

$

 -

Calpian, Inc. shareholders

$

(1,884,990)

 

$

(3,087,979)

 

$

(4,637,662)

 

$

(8,174,042)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding,

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

40,332,615 

 

 

28,850,318 

 

 

39,045,344 

 

 

27,458,221 

Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

$

(0.04)

 

$

(0.11)

 

$

(0.11)

 

$

(0.30)

 

 

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

 

 

 

5

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CALPIAN, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

December 31,

 

2014

 

2013

OPERATING ACTIVITIES

 

 

 

 

 

Net loss

$

(5,776,859)

 

$

(8,174,042)

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

 

 

 

 

 

Equity investment loss (income)

 

(20,678)

 

 

3,808,447 

Deferred financing cost amortization

 

162,063 

 

 

162,063 

Residual portfolio amortization

 

852,597 

 

 

860,374 

Processing and servicing  - merchant portfolio amortization

 

757,924 

 

 

855,970 

Subordinated note discount amortization

 

290,555 

 

 

248,056 

Depreciation and amortization

 

502,445 

 

 

90,339 

Gain on sale of residual portfolio

 

(2,855,737)

 

 

 -

Stock-based compensation

 

 -

 

 

330,721 

Management equity awards

 

752,480 

 

 

 -

Equity awards issued for services

 

96,499 

 

 

11,129 

Loss on disposal of property and equipment

 

 -

 

 

8,635 

Deferred consulting fee amortization

 

257,169 

 

 

 -

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(439,680)

 

 

387,911 

Inventory

 

350,898 

 

 

(6,416)

Other assets

 

150,842 

 

 

(182,330)

Related party payables

 

(113,414)

 

 

326,684 

Accounts payable

 

109,454 

 

 

260,038 

Accrued liabilities

 

(328,412)

 

 

235,026 

Interest payable

 

(273,549)

 

 

 -

Deferred revenue

 

(169,044)

 

 

 -

Other liabilities

 

(59,522)

 

 

23,796 

 Net cash (used in) provided by operating activities  

 

(5,753,969)

 

 

(753,599)

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Contribution to equity method - Money-on-Mobile

 

 -

 

 

212,210 

Investment in equity method - Money-on-Mobile

 

(245,250)

 

 

(4,324,060)

Contribution to other equity method investments

 

(160,693)

 

 

 -

Investment in residual portfolios

 

(3,176,550)

 

 

 -

Purchases of property and equipment

 

(1,472,050)

 

 

(181,014)

Proceed from sale of residual portfolio

 

3,800,000 

 

 

 -

Acquisition of intangible assets

 

(408,530)

 

 

(40,072)

Net cash used in investing activities

 

(1,663,073)

 

 

(4,332,936)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Borrowings on senior notes

 

999,950 

 

 

 -

Borrowings on subordinated notes

 

 -

 

 

300,000 

Payment on notes payable

 

(3,870,000)

 

 

 -

Issuance of common stock and warrants

 

3,252,280 

 

 

4,077,247 

Issuance of Series B Preferred stock

 

 -

 

 

550,951 

Change in restricted cash

 

1,500 

 

 

47,143 

Net cash (used in) provided by financing activities  

 

383,730 

 

 

4,975,341 

 

 

 

 

 

 

Foreign currency effect on cash flows

 

(192,537)

 

 

(1,157)

 

 

 

 

 

 

Net change in cash and equivalents  

 

(7,225,849)

 

 

(112,351)

Cash and equivalents at beginning of period  

 

8,078,505 

 

 

585,717 

Cash and equivalents at end of period  

$

852,656 

 

$

473,366 

 

 

 

 

 

 

6

 


 

SUPPLEMENTAL INFORMATION

 

 

 

 

 

Bank financing purchase of fixed assets

 

2,254,500 

 

 

 -

Common stock issued to acquire equity investment

 

 -

 

 

1,504,074 

Common stock issued in exchange for residual portfolios

 

3,150 

 

 

14,880 

Warrants issued as part of debt and equity financings

 

704,606 

 

 

392 

Subordinated debt converted to common stock

 

300,000 

 

 

950,703 

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

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF 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 

 

$

23,916 

 

 -

 

$

 -

 

$

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 

 -

$

29,022 

 -

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 with equity financing

 -

 -

 

 -

 

 -

 -

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

687,435 

 -

 

 -

 -

 

 -

 -

 

 -

 

 

687,435 

Warrants issued with debt financing

 -

 -

 

 -

 

 -

 -

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

704,646 

 -

 

 -

 -

 

 -

 -

 

 -

 

 

704,646 

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 

 

 

999,000 

 -

 

 -

 -

 

 -

 -

 

 -

 

 

 -

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

 -

 -

 

 -

 

 -

 -

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

752,480 

 -

 

 -

 -

 

 -

 -

 

 -

 

 

752,480 

Canceled stock

 -

 -

 

 -

 

 -

 -

 

 -

 

(233,290)

 

 

(233)

 

 -

 

 

 -

 

 

(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

 -

 -

 

 -

 

 -

 -

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 -

 

(4,277,158)

 -

 

(1,499,701)

 -

 

 -

 

 

(5,776,859)

Foreign currency translation adjustment

 -

 -

 

 -

 

 -

 -

 

 -

 

 -

 

 

 -

 

 -

 

 

 -

 

 

 -

 -

 

 -

 -

 

 -

 -

 

(506,447)

 

 

(506,447)

Balance, December 31, 2014

 -

 -

$

 -

 -

 -

 -

$

 -

$-

38,799,015 

 -

$

38,799 

 -

1,533,600 

 -

$

1,534 

 -

$

34,919,419 

 -

$

(19,659,670)

 -

$

5,484,794 

 -

$

495,250 

 -

$

21,280,126 

 

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

 

 

8

 


 

UNAUDITED 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 has determined that the My Mobile Payments Limited is a Variable Interest Entity ("VIE"). The Company follows guidance issued by the FASB on the consolidation of VIEs that requires companies to utilize a qualitative approach to determine whether it is the primary beneficiary of a VIE. The process for identifying the primary beneficiary of a VIE requires consideration of the factors that indicate a party has the power to direct the activities that most significantly impact the entity’s economic performance.  The evaluation of each of these factors in reaching a conclusion about the potential significance of the Company's economic interests is a matter that requires the exercise of professional judgment

 

For financial reporting purposes, the entity's assets, liabilities, and operations are consolidated with those of the Company, and the non-controlling interest in the entity is included in the Company's consolidated financial statements within the equity section of the consolidated Balance Sheets.

 

Interim Financial Statements

The unaudited condensed interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

 

The condensed balance sheet as of March 31, 2014 has been derived from audited financial statements.

 

Operating results for the nine months ended December 31, 2014 are not necessarily indicative of results that may be expected for the year ending March 31, 2015. These condensed financial statements should be read in conjunction with the audited financial statements for the year ended March 31, 2014 filed with the Company’s Form 10-K-NT filed with the Securities and Exchange Commission on August 11, 2014.

 

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

9

 


 

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