Quarterly Report (10-q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-55645

IDDRIVEN, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		46-4724127
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

13355 Moss Rock Dr., Auburn, CA		95602
(Address of Principal Executive Offices)		(Zip Code)

(415) 226-7773

(Registrant's Telephone Number, Including Area Code)

Not applicable .

(Former Name, former address and former fiscal year, if changed since last report)

Indicate by checkmark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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 last 90 days. YES x NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO o

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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

As of November 18, 2016, there were 82,561,409 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	31
Signatures		31

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report includes forward-looking statements. These forward looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including but not limited to: variability of our future revenues and financial performance; risks associated with product development and technological changes; the acceptance of our products in the marketplace by potential future customers; general economic conditions. Factors that could cause our actual results of operations and financial condition to differ materially are discussed in greater detail in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on April 14, 2016.

You should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual result

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

IDdriven Inc.

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2016			2015
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	12,811		$	48,764
Accounts receivable		19,379			2,005
Other receivables and prepaid expenses		19,215			23,195
Total Current Assets		51,405			73,964

Property and equipment, net		6,229			8,455
Other assets		17,758			17,283
TOTAL ASSETS	$	75,393		$	99,702

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable	$	402,908		$	62,671
Accrued expenses		61,018			4,868
Subscription payable		51,000			-
Other current liabilities		18,455			17,746
Convertible note payable, net of unamortized debt discount of $349,798 and $0, respectively		545,511			-
Notes payable – related party		66,864			-
Derivative liabilities		871,625			31,080
Total Current Liabilities		2,017,381			116,365

Long-term Liabilities
Convertible notes payable, net of unamortized debt discount and debt issue cost of $55,147 and $29,687, respectively		19,853			470,313
TOTAL LIABILITIES		2,037,234			586,678

Commitments and contingencies		-			-

Stockholders' Deficit
Preferred stock: 10,000,000 authorized shares; $0.001 par value Series A convertible preferred stock, $0.001 par value, $1.00 stated value; 808,000 shares designated; 641,332 and 807,568 shares issued and outstanding, respectively.		642			808
Common stock: 500,000,000 authorized; $0.001 par value 82,561,409 and 74,910,000 shares issued and outstanding, respectively		82,561			74,910
Additional paid in capital		1,175,765			696,368
Series A convertible preferred stock subscription		-			(250,000	)
Accumulated deficit		(3,196,370	)		(989,330	)
Accumulated other comprehensive loss		(24,439	)		(19,732	)
Total Stockholders' Deficit		(1,961,841	)		(486,976	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	75,393		$	99,702

See accompanying notes to these unaudited condensed consolidated financial statements.

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IDdriven Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2016			2015			2016			2015

Revenues	$	41,709		$	8,811		$	48,682		$	52,834

Operating Expenses
General and administration		163,276			61,651			627,766			159,185
Salaries and wages		91,651			73,215			282,454			192,470
Stock based compensation		70,961			-			132,645			-
Research and development		25,897			29,590			88,544			62,734
Management fees		125,669			92,400			376,189			244,275
Depreciation		1,244			1,434			3,917			4,232
Total operating expenses		478,698			258,290			1,511,515			662,896

Loss from operations		(436,989	)		(249,479	)		(1,462,833	)		(610,062	)

Other income (expense)
Interest income		-			-			-			2,730
Interest expense		(124,192	)		(3,474	)		(246,158	)		(4,072	)
Change in fair value of derivative liability		(188,734	)		-			(452,983	)		-
Loss on extinguishment of debt		(45,066	)		-			(45,066	)		-
Total other expense		(357,992	)		(3,474	)		(744,207	)		(1,342	)

Net loss before taxes		(794,981	)		(252,953	)		(2,207,040	)		(611,404	)

Income tax benefit		-			-			-			34,500

Net loss	$	(794,981	)	$	(252,953	)	$	(2,207,040	)	$	(576,904	)

Other comprehensive income (loss)
Foreign currency translation adjustment		(1,301	)		2,323			(4,707	)		(9,730	)

Comprehensive loss	$	(796,282	)	$	(250,630	)	$	(2,211,747	)	$	(586,634	)

Basic and dilutive loss per common share	$	(0.01	)	$	(0.00	)	$	(0.03	)	$	(0.03	)

Weighted average number of common shares outstanding - basic and diluted		80,481,884			56,014,923			77,095,757			21,834,837

See accompanying notes to these unaudited condensed consolidated financial statements.

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IDdriven Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	September 30,
	2016			2015

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,207,040	)	$	(576,904	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		3,917			4,232
Stock-based compensation		132,645			-
Expenses paid by note payable		27,500			-
Amortization of debt discount and debt issue cost		188,048			-
Loss on extinguishment of debt		45,066			-
Change in fair value of derivative liability		452,983			-
Changes in operating assets and liabilities:
Accounts receivable		(17,319	)		62,757
Loan receivable		-			33,453
Prepaid expenses and other receivables		33,200			785
Accounts payable		387,650			120,041
Accrued interest		57,639			4,065
Other current liabilities		(15,153	)		(25,768	)
Net Cash Used in Operating Activities		(910,864	)		(377,339	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(1,458	)		(1,471	)
Net Cash Used in Investing Activities		(1,458	)		(1,471	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible note payable		425,000			294,799
Payment of financing cost		(17,500	)		-
Proceeds from issuance of promissory notes payable		166,864			-
Proceeds from subscription payable		51,000			-
Proceeds from preferred stock subscription		250,000			-
Net Cash Provided By Financing Activities		875,364			294,799

Foreign currency translation effect on cash and cash equivalents		1,005			(3,727	)

Decrease in cash and cash equivalents		(35,953	)		(87,738	)
Cash and cash equivalents, beginning of period		48,764			92,224
Cash and cash equivalents, end of period	$	12,811		$	4,486

Supplemental cash flow information
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

Supplemented disclosure of non-cash investing and financing activities
Issuance of common stock on conversion of debt	$	254,237		$	44,799
Derivative liability recognized as debt discount	$	548,333		$	-
Preferred stock conversion into common stock	$	166		$	-
Common stock issued for debt discount	$	100,000		$	-
Prepaid expense paid by note payable	$	17,500		$	-
Conversion of accounts payable to convertible notes payable	$	48,798		$	-
Replacement of note payable and accrued interest to convertible note payable	$	101,511		$	-

See accompanying notes to these unaudited condensed consolidated financial statements.

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IDDRIVEN, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(UNAUDITED)

NOTE 1. ORGANIZATION AND BUSINESS

Organization and Operations

IDdriven, Inc., (“IDdriven”, “we”, “us”, or the “Company”) is a Nevada corporation incorporated on January 27, 2014 under the name TiXFi, Inc. (“TiXFi”). Insight Innovators B.V., was incorporated on May 22, 2013 in the Netherlands and has its registered corporate seat in Amersfoort, The Netherlands.

Effective on February 1, 2016, the Company’s corporate name was changed to IDdriven, Inc. Following its December 21, 2015 acquisition of a 100% ownership interest of Insight Innovators, B.V., a Dutch corporation (“Insight”), the Company became an enterprise software company that developed, and is currently marketing and seeking license opportunities for a next-generation Identity and Access Management enterprise solution designed to manage large volumes of users and access rights over various applications in hybrid environments (cloud and on-premises). The Company’s sports and entertainment ticket broker business was sold upon completion of the Insight merger as discussed below.

Change in Fiscal Year. On January 21, 2016, our Board of Directors approved a change in our Fiscal Year from February 28 to December 31 in connection with our acquisition of Insight Innovators, B.V. The change in fiscal year became effective for our 2015 fiscal year, which began March 1, 2015 and ended December 31, 2015. Insight had a fiscal year of December 31. Due to reverse acquisition with Insight, all of the financial statements prior to the acquisition date are of Insight.

Stock Split . Effective January 21, 2016, we effected a 1 for 6 forward stock split of our issued and outstanding common stock (the “Forward Stock Split”). All references to shares of our common stock in this report on Form 10-Q refers to the number of shares of common stock after giving effect to the Forward Stock Split (unless otherwise indicated).

Share Exchange and Reorganization

On December 21, 2015 (the “Effective Date”), Insight Innovators B.V. merged into IDdriven, and became a 100% subsidiary of IDdriven. Furthermore, the Company entered into and closed on a share exchange agreement with Insight and its shareholders. Pursuant to the terms of the share exchange agreement, IDdriven issued 55,980,000 shares of its unregistered common stock to the shareholders of Insight in exchange for 40,074 shares of Insight’s common stock, representing 100% of its issued and outstanding common stock and assumed $46,000 of Insight’s debts and as a result of the share exchange agreement, Insight became a wholly owned subsidiary of TiXFi. In conjunction with the Share Exchange, we purchased 12,000,000 shares of our common stock from Paula Martin, our former Chief Executive Officer and sole director, for a price of approximately $0.0125 per share (an aggregate of $150,000) pursuant to the terms of a Stock Redemption Agreement dated December 21, 2015. In addition, pursuant to the terms and conditions of a Spin-Off Agreement dated December 21, 2015, Ms. Martin acquired all assets and liabilities related our online ticket brokerage business in exchange for the cancellation by Ms. Martin of 18,000,000 shares of our common stock she held.

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Going Concern Matters

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the Company’s continuation as a going concern. The Company has incurred operating losses of $1,462,833 during the period ended September 30, 2016 and has an accumulated deficit of $3,196,370 as of September 30, 2016. In addition, current liabilities exceed current assets by $1,965,976 as of September 30, 2016.

Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors.

There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail or cease its operations.

Due to uncertainties related to these matters, there exists a substantial doubt about the ability of the Company to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation of Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited condensed financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on April 14, 2016.

Consolidation Policy

For September 30, 2016, the unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Insight Innovators B.V. All significant intercompany balances and transactions have been eliminated in consolidation. Prior to December 21, 2015, the financial statements presented are those of Insight.

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Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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. Significant estimates include assumptions about collection of accounts and notes receivable, the valuation and recognition of stock-based compensation expense, the valuation and recognition of derivative liability, valuation allowance for deferred tax assets and useful life of fixed assets.

Functional currency

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars ("USD"). The Company's wholly owned subsidiary (Insight’s) functional currency is the Euro. The financial statements are translated into USD in accordance with Codification ASC 830, “Foreign Currency Matters”. All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, shareholders' equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in the shareholders' equity in accordance with Codification ASC 220, “Comprehensive Income”.

Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into Euro at the rate on the date of the transaction and included in the results of operations as incurred. There were no material transaction gains or losses in the periods presented.

	September 30, 2016		December 31, 2015

Spot Euro: USD exchange rate	$	1.12	$	1.09

Average Euro: USD exchange rate	$	1.11-1.12	$	1.10–1.15

Revenue recognition

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (i) persuasive evidence of an arrangement exists; (ii) services have been rendered; (iii) the fee is fixed or is determinable; and (iv) collectability is reasonably assured. Determination of criteria (iii) and (iv) are based on management's judgments regarding the fixed nature of the selling prices of the services delivered and the collectability of those amounts. The Company’s agreements do not include general rights of return and do not provide clients with the right to take possession of the software supporting the services being provided. As such, the agreements are accounted for as service contracts.

Revenues from the services rendered are recognized in proportion to the services delivered.

Any amount receivable or received, but unrecognized for revenue recognition purpose is recorded as deferred revenues.

Sales taxes collected from clients and remitted to governmental authorities where applicable are accounted for on a net basis and therefore are excluded from revenues in the statements of operations.

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Fair value measurements

Fair value is defined as the price that the Company would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent counter-party in the principal market or in the absence of a principal market, the most advantageous market for the investment or liability. A three-tier hierarchy is established to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs); and establishes a classification of fair value measurements for disclosure purposes.

The hierarchy is summarized in the three broad levels listed below:

	Level 1	quoted prices in active markets for identical assets and liabilities
	Level 2	other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.)
	Level 3	significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities).

In accordance with Accounting Standards Codification (“ASC”) 815, the Company’s debt derivative liabilities are measured at fair value on a recurring basis, and are level 3 measurements in the three-tier fair value hierarchy.

There were no transfers between the levels of the fair value hierarchy during the periods ended September 30, 2016 and 2015.

Stock-Based Compensation

ASC 718, "Compensation – Stock Compensation," prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of 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. Share-based expense totaled $132,645 and $0 for the nine months ended September 30, 2016 and 2015, respectively. Share-based expense totaled $70,961 and $0 for the three months ended September 30, 2016 and 2015, respectively.

Fair value of financial instruments

The Company's financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

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The following table summarizes fair value measurements by level at September 30, 2016 and December 31, 2015 measured at fair value on a recurring basis:

September 30, 2016	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	871,625	$	871,625

December 31, 2015	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liabilities	$	-	$	-	$	31,080	$	31,080

Convertible Notes

Convertible notes are regarded as compound instruments, consisting of a liability component and an equity component. The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortized cost basis until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized as additional paid-in capital and included in equity, net of income tax effects, and is not subsequently remeasured. After initial measurement, they are carried at amortized cost using the effective interest method.

Derivative Financial Instruments

The fair value of an embedded conversion option that is convertible into a variable amount of shares and warrants that include price protection reset provision features are deemed to be “down-round protection” and, therefore, do not meet the scope exception for treatment as a derivative under ASC 815 “Derivatives and Hedging,” since “down-round protection” is not an input into the calculation of the fair value of the conversion option and warrants and cannot be considered “indexed to the Company’s own stock” which is a requirement for the scope exception as outlined under ASC 815.

The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

The Black-Scholes option valuation model was used to estimate the fair value of the conversion options. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options.

Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument.

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Recently Issued Accounting Standards

FASB Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” was issued May 2014 and updates the principles for recognizing revenue. The ASU will supersede most of the existing revenue recognition requirements in GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which a company expects to be entitled in exchange for transferring goods or services to a customer. This ASU also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that period. Early adoption is permitted for annual periods beginning after December 15, 2016. The Company is determining its implementation approach and evaluating the potential impacts of the new standard on its existing revenue recognition policies and procedures.

FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” was issued in April 2016 and adds further guidance on identifying performance obligations as well as improving licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606.

FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” was issued in June 2016 and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606.

FASB ASU 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” was issued in March 2016. This simplifies accounting for several aspects of share-based payment including income tax consequences, classification of awards as either equity or liability and classification on the statement of cash flows. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact upon adoption.

FASB ASU 2015-17, “Income Taxes Balance Sheet Classification of Deferred Taxes” was issued in November 2015. This requires entities to classify deferred tax liabilities and assets as noncurrent in a classified statement of financial position and applies to all entities that present a classified statement of financial position. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact upon adoption.

FASB ASU No. 2015-15, Interest—Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” was issued in August 2015 which permits an entity to report deferred debt issuance costs associated with a line-of-credit arrangement as an asset and to amortize such costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings under the credit line. The ASU applies to all entities and is effective for public business entities for annual periods beginning after December 15, 2015, and interim periods thereafter, with early adoption permitted. The guidance should be applied on a retrospective basis. The Company does not anticipate a significant impact upon adoption.

FASB ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs” was issued in April 2015. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU applies to all entities and is effective for public business entities for annual periods beginning after December 15, 2015, and interim periods thereafter, with early adoption permitted. The guidance should be applied on a retrospective basis. The Company does not anticipate a significant impact upon adoption.

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FASB ASU 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” was issued September 2014. This provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company does not anticipate a significant impact upon adoption.

FASB ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” was issued June 2014. This guidance was issued to resolve diversity in accounting for performance targets. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition and should not be reflected in the award’s grant date fair value. Compensation cost should be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. This update did not have a significant impact upon early adoption.

Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's unaudited condensed consolidated financial statements.

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at September 30, 2016 and December 31, 2015:

	September 30,			December 31,
	2016			2015
	(Unaudited)
Furniture	$	5,915		$	5,915
Computers		18,886			17,428
		24,801			23,344
Accumulated Depreciation		(16,492	)		(12,575	)
Foreign currency translation effect		(2,080	)		(2,313	)
	$	6,229		$	8,455

Depreciation expense for the three and nine months ended September 30 2016 and 2015 amounted to $1,244, $1,433, $3,917, and $4,232, respectively. All of our property and equipment are recorded in Insight (foreign subsidiary) as of September 30, 2016 and December 31, 2015.

NOTE 4. NOTES PAYABLE – RELATED PARTIES

Notes payable consisted of the following at September 30, 2016 and December 31, 2015:

	September 30, 2016			December 31, 2015
	(Unaudited)
Promissory Notes	$	66,864		$	-
Less current portion of notes payable		(66,864	)		-
Long-term notes payable	$	-		$	-

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Dated June 7, 2016

On June 7, 2016, the Company issued a 8% Promissory Note for EUR 4,700 ($5,264). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender.

On June 7, 2016, the Company issued another 8% Promissory Note for EUR 4,700 ($5,264). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender. The note was repaid in September 2016, which included interest of $106.

Dated June 16, 2016

On June 16, 2016, the Company issued a 10% Secured Promissory Note (the “Promissory Note”) for $100,000 and 400,000 shares of our unregistered common stock. The note bears interest at the rate of 10% per annum and is due in full on June 16, 2017. The note is secured by the pledge of 17,910,000 shares of the Company’s common stock, held by its CEO. The 400,000 common shares had a deemed value of $100,000 and were accounted for as a finance cost to the Promissory Note, resulting in a debt discount on day one of $100,000. Unamortized debt discount of $96,970 was reversed and adjusted against loss on extinguishment of debt.

On September 12, 2016, the Promissory Note issued on June 16, 2016 of $100,000 together with accrued interest of $1,511 was replaced by a Convertible Note for $101,511 and warrants to purchase up to 50,755 shares of our common stock. The note bears interest at the rate of 20% per annum and is due in full on September 11, 2017. The Company determined this was a debt extinguishment. The replacement of the note resulted in $101,600 loss on extinguishment of debt included in the unaudited condensed consolidated statements of operations.

Dated June 29, 2016

On June 29, 2016, the Company issued a 8% Promissory Note for EUR 10,000 ($11,200). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender.

Dated June 30, 2016

On June 30, 2016, the Company issued a 8% Promissory Note for EUR 10,000 ($11,200). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender.

Dated August 29, 2016

On August 29, 2016, the Company issued a 8% Promissory Note for EUR 35,000 ($39,200). The note bears interest at a rate of 8% per annum and is due within ten days after demand by the lender.

As of September 30, 2016 and December 31, 2015, the Company recorded accrued interest related to these promissory notes of $967 and $0, respectively.

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NOTE 5. CONVERTIBLE NOTES PAYABLE

Convertible notes payable consisted of the following at September 30, 2016 and December 31, 2015:

	September 30, 2016			December 31, 2015
	(Unaudited)
Convertible Note - December 2015	$	350,000		$	500,000
Convertible Note - February 2016		30,000			-
Convertible Note - March 2016		250,000			-
Convertible Notes - May 2016		75,000			-
Convertible Note - June 2016		15,000			-
Convertible Note - September 2016		250,308			-
		970,308			500,000
Less debt discount and debt issuance cost		(404,944	)		(29,687	)
		565,364			470,313
Less current portion of convertible notes payable		(545,511	)		-
Long-term convertible notes payable	$	19,853		$	470,313

The Company recognized amortization expense related to the debt discount and deferred financing fees of $188,048 and $0 for the nine months ended September 30, 2016 and 2015, respectively, which are included in interest expense in the consolidated statements of operations.

Dated – Issued in Fiscal Year 2015

On December 21, 2015, the Company issued a 10% Convertible Note (the “10% Convertible Note”) in the amount of $500,000, in exchange for a promissory note for $500,000 originally issued by Insight on October 20, 2015 to an unrelated third party investor (the “Investor”). The Company assumed accrued interest of $3,838 due from this previous promissory note. The 10% Convertible Note bears interest at the rate of 10% per annum and matures May 1, 2017. The holder is entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. The conversion price (the “Conversion Price”) is 75% of the volume weighted average price of the Common Stock for the ten (10) trading days immediately prior to the applicable conversion date, subject to adjustment herein but in no event: (i) lower than $4,000,000 divided by the total number of shares of Common Stock outstanding immediately prior to the conversion date; or (ii) greater than $12,000,000 divided by the total number of shares of common stock outstanding immediately prior to the conversion date.

On July 22, 2016, $150,000 of the Convertible Note was converted into 941,620 common shares at market trading price $0.27 per share. The conversion generated $56,534 gain on extinguishment of debt in the unaudited condensed consolidated statements of operations.

Dated – Issued in Fiscal Year 2016

During the nine months ended September 30, 2016, the Company issued a total Convertible Notes in the amount of $620,308 and warrants to purchase up to 450,755 shares of our common stock, with the following terms:

	·	Terms 6 – 18 months

	·	Annual interest rates ranging from 8% to 20%

	·	Convertible at the option of the holders either at issuance or 6 months from issuance.

	·	Conversion prices are typically based on the discounted (20% - 25% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes are subject to adjustment to not convert in a value band, not lower than $4,000,000 to $6,000,000 or higher than $12,000,000 to $18,000,000, divided by the total number of shares of common stock outstanding immediately prior to the conversion date.

Certain notes include financing costs paid, recorded as debt discounts, totaling to $17,500 and the Company received cash of $425,000.

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The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note.

The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes that became convertible as of September 30, 2016 and December 31, 2015 amounted to $871,625 and $31,080, respectively. During the nine months ended September 30, 2016, $548,333 of the value assigned to the derivative liability was recognized as a debt discount to the notes and warrants, $313,217 was recognized as a “day 1” derivative loss, $160,771 value of derivative liability on the date of conversion was extinguished and $139,766 was recorded as gain on change in fair value of derivative liability.

Warrants

We accounted for the issuance of the Warrants in accordance with ASC 815 as a derivative (see Note 6).

On March 28, 2016, the Company issued a Convertible Note in the amount of $250,000 and warrants to purchase up to 250,000 shares of our common stock. The warrants are exercisable into 250,000 shares of common stock, for a period of five years from issuance, at a price of $0.40 per share.

On September 12, 2016, the Company issued a Convertible Note in the amount of $101,511 and warrants to purchase up to 50,755 shares of our common stock. The warrants are exercisable into 50,775 shares of common stock, for a period of one year from issuance, at 120% of the lowest trading price during 20 trading day prior to the exercise date.

On September 12, 2016, the Company issued a Convertible Note in the amount of $150,000 of which $50,000 was received as of September 30, 2016, and warrants to purchase up to 75,000 shares of our common stock. The warrants are exercisable into 75,000 shares of common stock, for a period of one year from issuance, at 120% of the lowest trading price during 20 trading day prior to the exercise date.

On September 21, 2016, the Company issued Convertible Notes in the amount of $150,000 of which $50,000 was received as of September 30, 2016, and warrants to purchase up to 75,000 shares of our common stock. The warrants are exercisable into 75,000 shares of common stock, for a period of one year from issuance, at 120% of the lowest trading price during 20 trading day prior to the exercise date.

The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2016:

Warrants Outstanding						Warrants Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
	250,000		4.49	$	0.40		250,000	$	0.40
	50,755		2.92	$	0.16		50,755	$	0.16
	75,000		2.92	$	0.16		75,000	$	0.16
	75,000		2.97	$	0.16		75,000	$	0.16

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A summary of activity during the period ended September 30, 2016 follows:

	Number of Shares		Weighted- Average Exercise Price
Balances as of December 31, 2015		-	$	-
Issued		450,755		0.29
Exercised		-		-
Forfeited/canceled/expired		-		-
Balances as of September 30, 2016		450,755	$	0.29

NOTE 6. DERIVATIVE LIABILITY

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “ Derivatives and Hedging,” and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of September 30, 2016. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note and warrants is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in September 30, 2016 and December 31, 2015:

	Nine Months Ended		Year Ended
	September 30,		December 31,
	2016		2015
	(unaudited)
Expected term		0.18 - 4.49 years		1.33 - 1.36 years
Expected average volatility		101% - 146%		108% - 110%
Expected dividend yield		-		-
Risk-free interest rate		0.36% - 1.21%		0.80%

The following table summarizes the derivative liabilities included in the balance sheet at September 30, 2016:

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2015	$	31,080
Addition of new derivative liabilities upon issuance of convertible notes as debt discounts		537,874
Addition of new derivative liabilities recognized as loss on convertible notes		227,133
Addition of new derivative liabilities recognized as issuance of warrants as debt discounts		10,459
Addition of new derivative liabilities recognized as loss on warrants		86,084
Reduction of derivatives liabilities from conversion of convertible note to common shares		(160,771	)
Loss on change in fair value of the derivative liabilities		139,766
Balance – September 30, 2016	$	871,625

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ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item. The following table summarizes the loss on derivative liability included in the income statement for the financial periods ended September 30, 2016 and 2015, respectively.

	Nine Months Ended
	September 30,
	2016		2015
Day one loss due to derivative liabilities on convertible notes and warrants	$	313,217	$	-
Loss on change in fair value of the derivative liabilities		139,766		-
Net loss on derivative liability	$	452,983	$	-

NOTE 7. RELATED PARTY CONSIDERATIONS

Rent

Insight leases approximately 4,000 square feet of space in The Netherlands from a related party landlord, owned by immediate family member of management. The terms of the lease require that Insight pay €1,500 per month (approximately $1,680 per month) on a month to month basis to a related party landlord, owned by immediate family member of management.

Total rent expenses for the nine months ended September 30, 2016 and 2015 were $15,075 and $15,165, respectively. Total rent expenses for the three months ended September 30, 2016 and 2015 were $5,040 and $5,040, respectively.

Management Contracts

During the years ended December 31, 2015 and 2014, the Company entered into management contracts with officers and directors of the Company who are also major shareholders, whereby they received cash salaries, stock option grants and other commitments (see note 10).

During the nine months ended September 30, 2016 and 2015, the Company incurred management fees of $376,189 and $244,275, respectively, to directors and/or officers of the Company. During the three months ended September 30, 2016 and 2015, the Company incurred management fees of $125,669 and $92,400, respectively, to directors and/or officers of the Company.

NOTE 8. CONCENTRATIONS

The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the periods ended September 30, 2016 and 2015

Customer

Nine Months Ended

September 30,

2016

Nine Months Ended

September 30,

2015

EU OCG UK

100

EU PWN

100

All of our sales were generated in foreign countries by Insight during the periods ended September 30, 2016 and 2015.

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NOTE 9. STOCKHOLDERS’ DEFICIT

On January 21, 2016 with an effective date of February 1, 2016, the Company filed Amended and Restated Articles of Incorporation (the “Amended and Restated Articles”) with the Secretary of State of the State of Nevada to:

	·	Increase the number of authorized shares of common stock, $0.001 par value from 100,000,000 to 500,000,000;
	·	Create a class of preferred stock consisting of 10,000,000 shares, the designations and attributes of which are left for future determination by our board of directors (“Preferred Stock”);
	·	Designate 808,000 shares of Preferred Stock as its Series A Preferred;
	·	Effect a 1 for 6 forward stock split of the Company’s issued and outstanding common stock;

Preferred Stock

The Company has authorized 10,000,000 preferred shares with a par value of $0.001 per share. The Board of Directors is authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.

Series A Convertible Preferred Stock

The Company has designated 808,000 shares of Series A Convertible Preferred Stock. As at September 30, 2016 and December 31, 2015, the Company had 641,332 and 807,568 shares of Series A Convertible preferred stock issued and outstanding, respectively.

The designations, rights and preferences of the Series A Preferred include:

	·	the stated value of the Series A Preferred is $1.00 per share.

	·	the shares have no voting rights, provided, however, that for so long as any shares are outstanding, we many not, without the affirmative vote of at least 51% of the then outstanding shares of the Series A Preferred, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred or alter or amend the Certificate of Designation, (b) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a liquidation (as defined) senior to, or otherwise in pari passu with, the Series A Preferred, (c) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders, (d) increase the number of authorized shares of Series A Preferred, or (e) enter into any agreement with respect to any of the foregoing.

	·	each share is convertible at the option of the holder based upon a conversion price of $0.0296 per share into shares of our common stock at any time. The rate of conversion is subject to adjustment as discussed below.

	·	Upon our liquidation, dissolution or winding-up, the holders will be entitled to receive out of our assets, whether capital or surplus, an amount equal to the stated value per share, $1.00, plus any accrued and unpaid dividends thereon.

	·	the conversion price of the Series A Preferred is subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events by adjustment of the conversion price by its multiplication by a fraction the numerator of which is the number of shares of common stock outstanding immediately before such event, and the denominator of which is the number of shares outstanding immediately after such event.

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If, at any time while the Series A Preferred is outstanding, the Company or any subsidiary, as applicable sells or grants any option to purchase or sells or grants any right to re-price, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any common stock or common stock equivalents entitling any person to acquire shares of common stock at an effective price per share that is lower than a conversion price then in effect for any of the Series A Preferred, as adjusted, then the conversion price for shares of Series A Preferred shall be reduced to equal the lower issuance price.

As long as any shares of Series A Preferred are outstanding, unless the holders of at least 51% in Stated Value of the then outstanding shares of such Series A Preferred shall have given prior written consent, the Corporation shall not, and shall not permit any Subsidiary to, directly or indirectly:

a) The Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents (or a combination of units thereof) involving a variable rate transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of common stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of common stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the common stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.

During the year ended December 31, 2015, we issued 807,568 shares of Series A Convertible Preferred stock, to five individuals, as part of the merger with Insight. The shares were issued for cash of $557,802 and exchange of a convertible note payable and accrued interest of $257,912.

During the period ended September 30, 2016, 166,236 shares of Series A Convertible Preferred Stock, were converted into 5,609,789 shares of common stock.

Common Stock

The Company has authorized 500,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

During the period ended September 30, 2016, the Company issued 7,651,409 shares of common stock, as follows:

	·	700,000 shares of common stock to consultants, for services valued at $100,000.

	·	5,609,789 shares of common stock in a conversion of 166,236 shares of Series A Convertible Preferred Stock.

	·	400,000 shares of common stock, with a value of $100,000, issued as part of a $100,000 Promissory Note.

	·	941,620 shares of common stock in a conversion of $150,000 of Convertible Notes valued at $254,238.

As at September 30, 2016 and December 31, 2015 the Company had 82,561,409 and 74,910,000 shares of common stock issued and outstanding, respectively.

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NOTE 10. INCENTIVE STOCK PLANS

2015 Stock Option Grants

We granted stock options, which was adopted by our board of directors on December 21, 2015, provides for equity incentives to be granted to our employees, executive officers or directors.

During the year ended December 31, 2015 we issued options to purchase an aggregate of 8,173,686 shares of our unregistered common stock at a price of $0.04893 per share for 1/3 of the shares, $0.05873 per share for 1/3 of the shares, and $0.06852 per share for 1/3 of the shares. The options had an aggregate value totaling $71,630 and were issued to Messrs. Verweij, van Wijk and de Vries, executive officers of our company.

A summary of activity during the period ended September 30, 2016 follows:

	Options Outstanding
	Number of Shares		Weighted- Average Exercise Price		Fair Value on Grant Date		Intrinsic Value
Balances as of December 31, 2015		8,173,686	$	0.0587	$	71,630	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited/canceled/expired		-		-		-		-
Balances as of September 30, 2016		8,173,686	$	0.0587	$	71,630	$	-

The outstanding options have a weighted-average remaining contract term of 4.23 years. As of September 30, 2016, all options remain unvested.

One-third of the options granted vest at the end of the first, second and third year after the date of the award date of December 21, 2015. After vesting, the option generally can be exercised for the period remaining in the 5-year term from issuance date. Total compensation cost expected to be recognized in future for unvested options at September 30, 2016 amounted to $37,794. During the three and nine months ended September 30, 2016, the Company charged to operations stock based compensation expense of $10,961 and $32,645, respectively.

The fair value of each option on the date of grant is estimated using the Black Scholes option valuation model. The following weighted-average assumptions were used for options granted during the year ended December 31, 2015:

	Year Ended December 31,
	2015
Expected term	5 years
Expected average volatility		95	%
Expected dividend yield		-
Risk-free interest rate		1.67	%
Expected annual forfeiture rate		-

The following table summarizes information relating to outstanding and exercisable stock options as of September 30, 2016:

Options Outstanding

Options Exercisable

Number of Shares

Weighted Average Remaining

Contractual life (in years)

Weighted Average

Exercise Price

Number

of Shares

Weighted Average

Exercise Price

8,173,686

4.23

0.0587

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company's stock exceeded the exercise price of the stock options at September 30, 2016 for those stock options for which the quoted market price was in excess of the exercise price ("in-the-money options"). As of September 30, 2016, the aggregate intrinsic value of options outstanding was $nil, as we did not have options available for exercise. As of September 30, 2016, no options to purchase shares of common stock were exercisable.

NOTE 11. SUBSEQUENT EVENTS

Management evaluated all activities of the Company through the issuance date of the Company’s unaudited condensed consolidated financial statements and concluded that no subsequent events have occurred that would require adjustments or disclosure into the unaudited condensed consolidated financial statements.

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ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and associated notes appearing elsewhere in this Report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by any forward-looking statements as a result of various factors, including the risks and uncertainties described under “Risk Factors.”

Accounting Periods . We define our accounting periods as follows:

	·	“2015”- January 1, 2015 through December 31, 2015,
	·	“third quarter of 2015”- July 1, 2015 through September 30, 2015,
	·	“2016”- January 1, 2016 through December 31, 2016,
	·	“third quarter of 2016”- July 1, 2016 through September 30, 2016.

Recapitalization, Change in Fiscal Year. Our acquisition of Insight Innovators, B.V., a Dutch corporation (“Insight Innovators”) discussed below was accounted for as a recapitalization of Insight Innovators since the shareholders of Insight Innovators obtained voting and managing control of our company. Insight Innovators was the acquirer for financial reporting purposes and IDdriven, Inc. was the acquired company. Consequently, the consolidated financial statements after completion of the acquisition include the assets and liabilities of both IDdriven, Inc. and Insight Innovators, the historical operations of Insight Innovators and their consolidated operations from the December 21, 2015 closing date of the acquisition. Insight Innovators retroactively applied its recapitalization pursuant to the terms of the Agreement for all periods presented in the accompanying consolidated financial statements. On January 21, 2016, our Board of Directors approved a change in our fiscal year following our acquisition of Insight Innovators and adopted the fiscal year end of Insight Innovators thereby changing our fiscal year end from February 28 to December 31. These financial statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein.

Stock Split . Effective January 21, 2016, we effected a 1 for 6 forward stock split of our issued and outstanding common stock (the “Forward Stock Split”). All references to shares of our common stock in this report on Form 10-Q refers to the number of shares of common stock after giving effect to the Forward Stock Split (unless otherwise indicated).

Company Overview

We are an enterprise software company that has developed and is now launching the next generation in Identity and Access Management (“IAM”) enterprise solutions into a demand driven market. IAM is a solution that helps end-users to ensure that access across multiple technological environments is granted only to the right individuals. IAM solutions provide secure, identity-based access to various systems, applications, and information from any location. Thus, IAM solutions minimize the risk of fraudulent activities, thereby preventing the misuse of data. IAM solutions are being widely adopted by large and medium-scale enterprises as well as government departments.

Our flagship product - IDdriven - is designed to manage large volumes of users and access rights over various applications in hybrid environments (cloud and on-premise). IDdriven is a superior, next-gen hybrid cloud-based solution and the new state of the art software delivered as a service (Software as a Service or “SaaS”). It is dynamic, seamless, scalable, and flexible with the widest array of features. Its plug & play functionality enables a new, untapped small and medium-sized enterprises (SME) marketplace.

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Marketing Strategy

We use different marketing channels to reach two different categories of customer:

	●	Small & Medium Enterprises (SME) (<500 subscribers) - via direct web-based interaction; and
	●	Large companies (500+) via channel partners.

We are a cost effective SaaS solution suitable to companies in all industries of any size. SME’s will be able to download IDdriven and pay with a credit card to capitalize on the program’s simple, plug & play installation. Large companies typically use a channel partner for a more sophisticated implementation to utilize IDdriven’s advanced features not needed by SME’s.

Utilizing the relationships of our senior management with the Microsoft Product Group since 2010, we continue to build our brand within the IAM industry. We also work with our partners and customers for joint news releases and case studies. We will continue our internal marketing activities, including following editorial calendars of various trade and vertical publications, seeking speaking engagements for our CEO, and publishing industry articles.

Our History

We were incorporated in Nevada on January 27, 2014 under the name TiXFi, Inc. and engaged in buying and reselling tickets to end users. Insight Innovators B.V., was incorporated on May 22, 2013 in the Netherlands and has its registered corporate seat in Amersfoort, The Netherlands.

On December 21, 2015, we completed a reverse merger with Insight Innovators, pursuant to which Insight Innovators became a wholly owned subsidiary of our company. Pursuant to the terms of a share exchange agreement, we issued 55,980,000 shares of our unregistered common stock to the shareholders of Insight in exchange for 40,074 shares of Insight’s common stock, representing 100% of its issued and outstanding common stock and assumed $46,000 of Insight’s debts. In conjunction with the share exchange agreement, we purchased 12,000,000 shares of our common stock from Paula Martin, our former Chief Executive Officer and sole director, for a price of approximately $0.0125 per share (an aggregate of $150,000) pursuant to the terms of a Stock Redemption Agreement dated December 21, 2015. In addition, pursuant to the terms and conditions of a Spin-Off Agreement dated December 21, 2015, Ms. Martin acquired all assets and liabilities related our online ticket brokerage business in exchange for the cancellation by Ms. Martin of 18,000,000 shares of our common stock she held.

Following completion of the reverse merger with Insight, on February 1, 2016 we changed our name from TiXFi, Inc. to IDdriven, Inc. After the reverse merger, we continued Insight Innovator’s historical and proposed business.

Results of Operations

The following comparative analysis on results of operations was based primarily on the comparative unaudited condensed consolidated financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report. The results related to the operation of our enterprise software business and do not include the historical results of operations of TiXFi, Inc. prior to December 21, 2015 when we acquired Insight Innovators as noted above.

Overview

In 2015 we elected to focus our efforts on the development of IDdriven, our IAM enterprise solutions product, and moved away from our consulting business which we started in 2013. This change resulted in a significant drop in revenues and reduction in capital resources in third quarter of 2016 compared to 2015 as our consulting contracts expired.

For the third quarter of 2016, we have generated losses from operations. As of September 30, 2016, our accumulated deficit was $3,196,370. Our loss from operations for the nine months ended 2016 and 2015 was $1,462,833 and $610,062, respectively. Our cash used in operations was $910,864 and $377,339 for the nine months ended September 30, 2016 and 2015, respectively. Our Stockholders’ deficit was $1,961,841 and $486,976 as of September 30, 2016 and December 31, 2015, respectively.

	September30,			December31,
	2016			2015			Change			%
Cash	$	12,811		$	48,764		$	(35,953	)	(74%)
Total Assets	$	75,393		$	99,702		$	(24,309	)	(24%)
Total Liabilities	$	2,037,234		$	586,678		$	1,450,556			247	%
Stockholders’ Deficit	$	(1,961,841	)	$	(486,976	)	$	(1,474,865	)		303	%

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For the Nine Months Ended September 30, 2016 Compared to the Nine Months Ended September 30, 2015

Revenue

	Nine Months Ended
	September 30,
	2016		2015		Change			%
Revenue	$	48,682	$	52,834	$	(4,152	)	(8%)

We recorded net consolidated revenue of $48,682 for the nine months ended 2016, compared to $52,834 for the nine months ended 2015, a decrease of $4,152, or 8%. The drop in revenue is directly related to our business model change discussed above.

Operating Expenses

	Nine Months Ended
	September 30,
	2016		2015		Change			%
General and administration	$	627,766	$	159,185	$	468,581			294	%
Salaries and wages		282,454		192,470		89,984			47	%
Stock based compensation		132,645		-		132,645			-
Research and development		88,544		62,734		25,810			41	%
Management fees		376,189		244,275		131,914			54	%
Depreciation		3,917		4,232		(315	)	(7		%)
	$	1,511,515	$	662,896	$	848,619			128	%

Operating expenses were $1,511,515 for the nine months ended 2016, compared to $662,896 for the nine months ended 2015, an increase of $848,619, or 128%. The significant increase in operating expenses was largely due to general and administration expenses primarily attributed to increased professional fees due to our financing transactions and costs associated with being a U.S. public reporting company, stock based compensation for consulting services and stock option vesting expenses and management fees for our executive officers and salary and wages as we ramped up our sales and development efforts for our IDdriven software.

Loss from Operations

Loss from operations increased to $1,462,833 for the nine months ended 2016, compared to a loss of $610,062 for the nine months ended 2015, an increase of $852,771, or 140%. The change was a result of a reduction in revenue and increases in expenses discussed above.

Other Income (Expenses)

	Nine Months Ended
	September 30,
	2016			2015			Change
Interest income	$	-		$	2,730		$	(2,730	)
Interest expense		(246,158	)		(4,072	)		(242,086	)
Change in fair value of derivative liability		(452,983	)		-			(452,983	)
Loss on extinguishment of debt		(45,066	)		-			(45,066	)
	$	(744,207	)	$	(1,342	)	$	(742,865	)

Other expense was $744,207 for the nine months ended 2016, compared to other expense of $1,342 for the nine months ended 2015, an increase in other expense of $742,865. The significant increase in other expense was primarily from a change in fair value of derivative liability related to our convertible notes and warrants, interest expense charges from borrowings and a loss on extinguishment of debt, partially offset by a reduction in interest income.

Net Loss

Net loss was $2,207,040 for the nine months ended 2016, compared to $576,904 for nine months ended 2015. The increase in net loss of $1,630,136 or 283%, was a result of a reduction in revenue and increases in expenses discussed above.

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Our comprehensive loss was $2,211,747 for the nine months ended 2016 compared to $586,634 for the nine months ended 2015, as adjusted for unrealized foreign currency translation changes of ($4,707) and ($9,730), respectively. We recognize foreign currency translation adjustments due to our wholly owned subsidiary (Insight Innovator’s) functional currency being the Euro and our reporting currency being the U.S. Dollar.

For the Three Months Ended September 30, 2016 Compared to the Three Months Ended September 30, 2015

Revenue

	Three Months Ended
	September 30,
	2016		2015		Change		%
Revenue	$	41,709	$	8,811	$	32,898		373	%

The increase in revenue, during the three months ended September 30, 2016 by $32,898 or 373%, is directly related to SaaS customer implementation consultancy fees.

Operating Expenses

	Three Months Ended
	September 30,
	2016		2015		Change			%
General and administration	$	163,276	$	61,651	$	101,625			165	%
Salaries and wages		91,651		73,215		18,436			25	%
Stock based compensation		70,961		-		70,961			-
Research and development		25,897		29,590		(3,693	)	(12%)
Management fees		125,669		92,400		33,269			36	%
Depreciation		1,244		1,434		(190	)	(13		%
	$	478,698	$	258,290	$	220,408			85	%

The significant increase in operating expenses, during the three months ended September 30, 2016, of $220,408 or 85% was largely due to general and administration expenses primarily attributed to increased professional fees due to our financing transactions and costs associated with being a U.S. public reporting company, stock based compensation for consulting services and stock option vesting expenses and management fees for our executive officers and salary and wages as we ramped up our sales and development efforts for our IDdriven software.

Loss from Operations

Loss from operations increased to $436,989 for the three months ended September 30, 2016, compared to a loss of $249,479 for the three months ended September 30, 2015, an increase of $187,510, or 75% The change was a result of increases in expenses offset by increases in revenues as discussed above.

Other Expenses

	Three Months Ended
	September 30,
	2016		2015		Change
Interest expense	$	124,192	$	3,474	$	120,718
Change in fair value of derivative liability		188,734		-		188,734
Loss on extinguishment of debt		45,066		-		45,066
	$	357,992	$	3,474	$	354,518

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The significant increase in other expenses was primarily from a change in fair value of derivative liability related to our convertible notes and warrants and interest expense charges from borrowings, and loss on extinguishment of debt, partially offset by an increase in interest expense.

Net Loss

	Three Months Ended
	September 30,
	2016		2015		Change		%
Net loss	$	794,981	$	252,953	$	542,028		214	%

The increase in net loss, for the three months ended September 30, 2016, of $542,028, was primarily a result of increases in expenses offset by increases in revenues as discussed above.

Our comprehensive loss was $796,282 for the three months ended September 30, 2016 compared to a loss of $250,630 for the three months ended September 30, 2015, as adjusted for unrealized foreign currency translation changes of ($1,301) and $2,323, respectively. We recognize foreign currency translation adjustments due to our wholly owned subsidiary (Insight Innovator’s) functional currency being the Euro and our reporting currency being the U.S. Dollar.

Liquidity and Capital Resources

The following tables present selected financial information on our capital and cash flows as of and for the periods ended September 30, 2016, December 31, 2015 and September 30, 2015:

	September 30,		December 31,
	2016		2015		Change
Current Assets	$	51,405	$	73,964	$	(22,559	)
Current Liabilities		2,017,381		116,365		1,901,016
Working Capital Deficiency	$	1,965,976	$	42,401	$	1,923,575

	Nine Months Ended
	September 30,
	2016			2015			Change
Cash Flows used in Operating Activities	$	(910,864	)	$	(377,339	)	$	(533,525	)
Cash Flows used in Investing Activities		(1,458	)		(1,471	)		13
Cash Flows provided by Financing Activities		875,364			294,799			580,565
Foreign currency adjustment		1,005			(3,727	)		4,732
Net Decrease in Cash During the Period	$	(35,953	)	$	(87,738	)	$	51,785

As of September 30, 2016 and December 31, 2015 our current assets were $51,405 and $73,964, respectively. The Company does not believe its existing balances of cash and cash equivalents will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations and debt service over the next 12 months.

The change in working capital during the third quarter of 2016 was primarily from an increase in convertible notes payable, increase in change in fair value of derivative liability related to our convertible notes and warrants, an increase in accounts receivable and accounts payable and accrued expenses, and a decrease of cash from $48,764 to $12,811.

Net cash used in operating activities during the nine months ended September 30, 2016 increased by $533,525 as compared to the same period of 2015. The increase was primarily due to a net loss of $2,207,040, reduced by an increase in non-cash items totaling $850,159, primarily from stock based compensation, expenses paid by a note payable, amortization of debt discounts, loss on extinguishment of debt and change in fair value of derivative liabilities, and net changes in operating assets and liabilities of $446,017. During the nine months ended September 30, 2015, the net loss was $576,904, with a non-cash add back for depreciation of $4,232, and a net change in operating assets and liabilities of $195,333.

Net cash used in investing activities for the nine months ended September 30, 2016 and 2015 was $1,458 and $1,471 respectively.

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Cash flows provided by financing activities for the nine months ended September 30, 2016 were $875,364 as a result of net proceeds from issuance of notes payable of $574,364, proceeds from a debt subscription payable of $51,000 and proceeds from preferred stock subscriptions of $250,000. During the nine months ended September 30, 2015 we had $294,799 cash flow provided by financing activities, from the proceeds of notes payable.

Capital Resources

We currently have limited cash resources on hand and our projected operating expenses and working capital needs exceed our income and cash resources. We do not have sufficient cash to carry out our operations over the next 12 months. As a result, capital raising has been and continues to be essential for our continued operations, ongoing sales and marketing efforts and further development of our IDdriven platform.

As part of our capital raising efforts, in the nine months ended September 30, 2016, we raised $325,000 by issuing 10% convertible notes, $100,000 by issuing 20% convertible notes, $166,864 by issuing 8% to 10% promissory notes, $250,000 from preferred stock subscriptions. There can be no assurance that we will be able to raise funds in any offering or on terms acceptable to us or at all. If we are unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned activities which could harm our financial conditions and operating results. Furthermore, any issuance of equity securities will result in dilution to our stockholders. Issuance of debt or convertible securities could also involve substantial dilution to our stockholders or operational and financial covenants that might inhibit our ability to implement our business plan.

Effects of Inflation

For the periods for which financial information is presented, we do not believe that the current levels of inflation in the United States or Europe have had a significant impact on our operations.

Off Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not have any undisclosed borrowings or debt, and we have not entered into any synthetic leases. We are, therefore, not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships.

Basis of Accounting and Going Concern

Our unaudited condensed consolidated financial statements have been prepared on the accrual basis of accounting in conformity with GAAP. In addition, the accompanying unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. We generated accumulated losses of approximately $3.2 million through September 30, 2016 and have insufficient working capital and cash flows to support operations. These factors raise substantial doubt about our ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty.

Application of Critical Accounting Policies

We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact on our business operations and any associated risks related to these policies are discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported or expected financial results.

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”). We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

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The material estimates for our company are that of the stock-based compensation recorded for options and warrants issue and the fair of embedded conversion options that are convertible into a variable amount of shares, and the income tax valuation allowance recorded for deferred tax assets. The fair values of options, warrants, and embedded conversion options are determined using the Black-Scholes option pricing model. We have no historical data on the accuracy of these estimates. The estimated sensitivity to change is related to the various variables of the Black-Scholes option pricing model stated below. The specific quantitative variables are included in the notes to the consolidated financial statements. The estimated fair value of options is recognized as expense on the straight-line basis over the options’ vesting periods. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model with the expected life, dividend yield, expected volatility, and risk-free interest rate weighted-average assumptions used for options and warrants granted. Expected volatility for 2016 and 2015 was estimated using the average historical volatility of three public companies offering services similar to ours. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the grant date. The expected life of options is based on the life of the instrument on grant date.

Stock-Based Compensation

ASC 718, "Compensation - Stock Compensation," prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of 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.

Share-based expense totaled $132,645 and $0 for the nine months ended September 30, 2016 and 2015, respectively.

Convertible Notes

Derivative Financial Instruments

The fair value of an embedded conversion option that is convertible into a variable amount of shares and warrants that include price protection reset provision features are deemed to be “down-round protection” and, therefore, do not meet the scope exception for treatment as a derivative under ASC 815 “Derivatives and Hedging”, since “down-round protection” is not an input into the calculation of the fair value of the conversion option and warrants and cannot be considered “indexed to the Company’s own stock” which is a requirement for the scope exception as outlined under ASC 815.

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Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument.

Also, refer Note 2 - Significant Accounting Policies and Note 6 - Derivative Liability in the unaudited condensed consolidated financial statements that are included in this Report.

Recent accounting pronouncements

For discussion of recently issued and adopted accounting pronouncements, please see Note 2 to the unaudited condensed consolidated financial statements included herein.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company”, we are not required to provide the information under Item 3.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls as of the end of the period covered by this report, September 30, 2016. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Arend D. Verweij, the certifying officer. Based upon that evaluation, our certifying officer concluded that as of the end of the period covered by this report, September 30, 2016, our disclosure controls and procedures are ineffective in timely alerting management to material information relating to us and required to be included in our periodic filings with the Securities and Exchange Commission (the “Commission”).

Our certifying officers further concluded that our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by the issuer in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and are also ineffective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow time for decisions regarding required disclosure.

Based on the evaluation described above, our certifying officers have concluded that, as of September 30, 2016, our disclosure controls and procedures were not effective because we did not maintain effective controls over certain aspects of the financial reporting process because we lacked a sufficient complement of accounting personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and there was an inadequate segregation of duties.

We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

Changes in Internal Controls Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting identified in connection with the evaluation of our controls performed during the nine months ended September 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

As a “smaller reporting company”, we are not required to provide disclosure under this Item 1A.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On September 12, 2016 (the “Effective Date”), IDdriven, Inc. (“we,” “us,” or the “Company”) entered into Subscription Agreements (each, an “Agreement”) with two unrelated third parties (each, an “Investor”). Pursuant to the terms of one of the Agreements, we issued to an Investor a 20% secured convertible promissory notes in exchange for a total of $150,000 (the “New Note”), of which $50,000 was received as of September 30, 2016, payable to the Company as set forth in the New Note; and pursuant to the second Agreement we exchanged a currently existing promissory note of the Company which had an accrued principal and interest due of $101,511 for a new secured convertible promissory note in the same amount (the “Replacement Note, and, together with the New Note, the “Notes”). Each of the Notes has substantially the same terms, other than the terms for the payment of the amounts to the Company as discussed below.

In connection with the Agreements and the Notes, the company issued to the Investors warrants to purchase a total of 125,755 shares of common stock, $0.001 par value per share (the “Common Stock”) of the Company. Warrants for 75,000 of the shares of Common Stock were issued in connection with the New Note and the remaining warrant was for the purchase of 50,755 shares of Common Stock and was issued in connection with the Replacement Note.

As part of the Investors’ agreements to enter into the Agreement, we issued to the Investors on the Effective Date three-year common stock purchase warrants to purchase up to 125,755 shares of our common stock at an exercise price of 120% of the lowest trading price of the Common Stock during the twenty trading day period ending on the last complete trading day prior to the date of conversion (the “Warrants”).

The exercise price of the Warrants is subject to proportional adjustment in the event of splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events.

On September 21, 2016 (the “2 ^nd Effective Date”), the Company) entered into Subscription Agreements (each, a “2 ^nd Agreement”) with two unrelated third parties (each, an “2 ^nd Investor”). Pursuant to the terms of the 2 ^nd Agreements, we issued to each 2 ^nd Investor a 20% secured convertible promissory notes in exchange for $75,000, for a total of $150,000 (the “2 ^nd Notes”), of which $50,000 was received as of September 30, 2016, payable to the Company as set forth in the Notes. Each of the 2 ^nd Notes has substantially the same terms.

In connection with the 2 ^nd Agreements and the 2 ^nd Notes, the Company issued to the 2 ^nd Investors warrants to purchase a total of 75,000 shares of Common Stock of the Company. Warrants for 37,500 of the shares of Common Stock were issued in connection with each 2 ^nd Note.

On June 17, 2016 (the “3 ^rd Effective Date”), the Company entered into a Securities Purchase Agreement (the “3 ^rd Agreement”) with an R & T Sports Marketing, Inc., an unrelated third party (the “3 ^rd Investor”). Pursuant to the terms of the 3 ^rd Agreement, on the 3 ^rd Effective Date, we issued to the 3 ^rd Investor a 10% secured promissory note in exchange for payment to the Company of $100,000 (the “3 ^rd Note”), payable to the Company as set forth in the Note. The 3 ^rd Agreement also provided that, in connection with the purchase of the 3 ^rd Note, the Company would issue to the 3 ^rd Investor 400,000 shares of Common Stock. On September 12, 2016, the Note was exchanged for a new secured convertible promissory note as disclosed above and described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 16, 2016.

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The Company issued 400,000 shares of Common Stock to the 3 ^rd Investor on September 30, 2016, as required by the 3 ^rd Agreement.

On September 30, 2016, the Company issued to an unrelated stockholder (the “Stockholder”) 3,720,004 shares of Common Stock, pursuant to a conversion by the Stockholder of 110,236 shares of Series A Preferred Stock of the Company held by the Stockholder with a face amount of $110,236, which were convertible into shares of Common Stock in accordance with the terms of the Series A Preferred Stock. The shares of Common Stock were issued based on a conversion price of $0.0296333 per share.

These shares of our common stock were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibit No.		Description

31.1*		Section 302 Certificate of Chief Executive Officer and Chief Financial Officer.

32.1*		Section 906 Certificate of Chief Executive Officer and Principal Financial and Accounting Officer.

10.1		Form of Subscription Agreement dated September 12, 2016 (incorporated by reference to Exhibit 10.1 to the registrant’s Form 8-K filed on September 16, 2016).

10.2		Form of Secured Convertible Promissory Note dated September 12, 2016 (incorporated by reference to Exhibit 10.2 to the registrant’s Form 8-K filed on September 16, 2016)..

10.3		Form of Warrant dated September 12, 2016 (incorporated by reference to Exhibit 10.3 to the registrant’s Form 8-K filed on September 16, 2016).

10.4		Form of Stock Pledge Agreement dated September 12, 2016 (incorporated by reference to Exhibit 10.4 to the registrant’s Form 8-K filed on September 16, 2016).

10.5		Form of Intellectual Property Security Agreement dated September 12, 2016 (incorporated by reference to Exhibit 10.5 to the registrant’s Form 8-K filed on September 16, 2016).

10.6		Securities Purchase Agreement dated June 17, 2016, between IDdriven, Inc., R & T Sports Marketing, Inc., and Legal & Compliance, LLC, as escrow agent (incorporated by reference to Exhibit 10.2 to the registrant’s Form 8-K filed on October 6, 2016).

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.INS*		XBRL Taxonomy Extension Calculation Linkbase Document

101.INS*		XBRL Taxonomy Extension Definition Linkbase Document

101.INS*		XBRL Taxonomy Extension Label Linkbase Document

101.INS*		XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IDdriven, Inc.

Date: November 18, 2016	By:	/s/ Arend D. Verweij
		Arend D. Verweij
		Chief Executive Officer and Chief Financial Officer
		(Principal Executive Officer and Principal Financial and Accounting Officer)

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