UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~February~~May 2931, 2016

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number: 333-178788

IFAN Financial, Inc.

(Name of small business issuer in its charter)

Nevada		33-1222494
(State of incorporation)		(I.R.S. Employer Identification No.)

3517 Camino Del Rio South, Suite 407,

San Diego, CA, 92108

(Address of principal executive offices)

Phone: (619) 537-9998

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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 past 90 days. Yes [X] No [ ]

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

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

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ] (Do not check if a smaller reporting company)	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 [ ] No [X]

As of ~~May~~July 94, 2016, there were 9195,~~646~~546,245 shares of the registrant’s $0.001 par value common stock issued and outstanding.

IFAN Financial, Inc.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION

ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS	4

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20

ITEM 4.	CONTROLS AND PROCEDURES	20

PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	21

ITEM 1A.	RISK FACTORS	21

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	21

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	21

ITEM 4.	MINE SAFETY DISCLOSURES	21

ITEM 5.	OTHER INFORMATION	21

ITEM 6.	EXHIBITS	22

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of IFAN Financial, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words “we,” “IFAN,” “our,” “us,” the “Company,” refers to IFAN Financial, Inc.

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

IFAN Financial, Inc.

As of and for the three and ~~six~~nine months ended ~~February~~May 2931, 2016

(Unaudited)

Financial Statement Index

Consolidated Balance Sheets (unaudited)	5

Consolidated Statements of Operations (unaudited)	6

Consolidated Statements of Cash Flows (unaudited)	7

Notes to the Consolidated Financial Statements (unaudited)	8

IFAN Financial, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	February 29, 2016			August 31, 2015
	May 31, 2016			August 31, 2015
CURRENT ASSETS
Cash	$	46135,~~245~~109		$	137,846
Accounts receivable		36530			-
Prepaid expense		-			8,761
TOTAL CURRENT ASSETS		46135,~~281~~639			146,607
Fixed assets, net		-			2,002
Software assets, net		43,~~178~~822,~~730~~214			4,766,764
Note receivable		100,000			100,000
Other assets		89,~~307~~804			5,315
TOTAL ASSETS	$	4,~~333~~067,~~318~~657		$	5,020,688
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	~~120~~105,~~480~~528		$	55,015
Accrued liabilities in dispute - Mobicash		379,135			379,135
Due to related party		400,853			282,436
Related party notes payable		383,455			282,436
Notes payable, net of discount of $21,846 and $79,121, respectively		533,154			475,879
Notes payable, net of discount of $0 and $79,121, respectively		5,000			475,879
Convertible notes payable, net of discount of $249,658 and $0, respectively		125,342			-
Convertible notes payable, net of discount of $148,110 and $0, respectively		776,890			-
Derivative liabilities		~~411~~474,~~137~~960			-
Common stock payable		~~254~~288,550			254,550
TOTAL CURRENT LIABILITIES		2,~~224~~413,~~651~~518			1,447,015
Convertible note payable, net of discount of $65,195 and $0, respectively		805			-
Convertible note payable, net of discount of $62,372 and $0, respectively		3,628			-
TOTAL LIABILITIES		2,~~225~~417,~~456~~146			1,447,015
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 961,858 issued and outstanding		962			962
Common stock, $0.001 par value, 800,000,000 shares authorized, 89,646,245 and 84,486,774 shares issued and outstanding, respectively		89,646			84,487
Common stock, $0.001 par value, 800,000,000 shares authorized, 92,896,245 and 84,486,774 shares issued and outstanding, respectively		92,896			84,487
Additional paid-in capital		6,~~414~~615,~~224~~974			5,948,213
Accumulated deficit		(45,~~396~~059,~~970~~321	)		(2,459,989	)
TOTAL STOCKHOLDERS’ EQUITY		21,~~107~~650,~~862~~511			3,573,673
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,~~333~~067,~~318~~657		$	5,020,688

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

IFAN Financial, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended February 29, 2016			Three months ended February 28, 2015			Six months ended February 29, 2016			Six months ended February 28, 2015
	Three months ended May 31, 2016			Three months ended May 31, 2015			Nine months ended May 31, 2016			Nine months ended May 31, 2015
REVENUE
REVENUES
Revenues	$	36268,294		$	-		$	36268,330		$	-
EXPENSES
Research and development		~~1,000~~-			7311,~~263~~284			115,624			~~175~~186,~~417~~701
Selling, general, and administrative		~~393~~356,~~518~~547			1574,~~145,434~~577			1,~~013~~369,~~324~~871			1,~~146~~721,~~647~~224
Software amortization		294,017			-			588,034			-
Software amortization and impairment		356,516			-			944,550			-
Amortization of license agreement		-			7,000			-			1522,000
Impairment expense		-			-			-			164,521
Total operating expenses		~~688~~713,~~535~~063			1592,~~225,697~~861			12,~~716~~430,~~982~~045			12,~~501~~094,~~585~~446
Change in fair value of derivative liabilities		(424,588	)		-			(78,003	)		-
OTHER (INCOME) EXPENSE
Interest expense		233,738			-			301,066			-
Change in fair value of derivative liabilities		(486,177	)		-			(564,180	)		-
Interest income		(1,530	)		-			(3,028	)		-
Interest expense		705,258			2,766			1,006,324			2,766
NET LOSS	$	(496,119	)	$	(1,225,697	)	$	(1,936,981	)	$	(1,501,585	)
Interest income		(1,499	)		-			(4,527	)		-
Basic and Diluted Net Loss Per Common Share	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.02	)
NET LOSS	$	(662,351	)	$	(595,627	)	$	(2,599,332	)	$	(2,097,212	)
Weighted average number of common shares outstanding – basic and diluted		89,629,761			81,332,109			88,223,218			80,642,274
Basic and Diluted Net Loss Per Common Share	$	(0.01	)	$	(0.02	)	$	(0.03	)	$	(0.02	)
Weighted average number of common shares outstanding – basic and diluted		90,790,267			84,100,808			89,085,147			81,807,787

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

IFAN Financial, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months			Six months
	Nine months			Nine months
	ended			ended
	February 29, 2016			February 28, 2015
	May 31, 2016			May 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(12,~~936~~599,~~981~~332	)	$	(12,~~501~~097,~~585~~212	)
Adjustments to reconcile net income loss to net cash used in operating activities:
Stock-based compensation		~~471~~645,170			~~990~~1,~~029~~425,111
Depreciation expense		2,002			12,~~980~~772
Amortization of software		588,034			-
Amortization and impairment of software		944,550			-
Amortization of license agreement		-			1522,000
Impairment expense		-			164,521
Change in fair value of derivative liabilities		(78564,~~003~~180	)		-
Amortization of debt discount		~~179~~855,~~771~~988			-2,766
Change in operating assets and liabilities:
Accounts receivable		(36530	)		-
Prepaid expense		8,761			-
Other assets		(24,~~992~~489	)		29,325
Accounts payable and accrued expenses		~~192~~177,~~265~~314			726,~~715~~922
NET CASH USED IN OPERATING ACTIVITIES		(576,009	)		(293,015	)
Accrued liabilities in dispute		-			-
NET CASH USED IN OPERATING ACTIVITIES		(534,746	)		(423,795	)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for license		-			(10,000	)
NET CASH USED IN INVESTING ACTIVITIES		-			(10,000	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock		-65,000			286,600
Proceeds from convertible notes payable		401,500			-235,000
Proceeds from related party advances		128,225			31,120
Proceeds from related party notes payable		128,225			-
Payments of related party loans		(45,317	)
Payments of related party notes payable		(62,716	)		167,547
NET CASH PROVIDED BY FINANCING ACTIVITIES		~~484~~532,~~408~~009			~~317~~689,~~720~~147
NET INCREASE (DECREASE) IN CASH		(912,~~601~~737	)		14255,~~705~~352
CASH, BEGINNING OF PERIOD		137,846			-
CASH, END OF PERIOD	$	46135,~~245~~109		$	14255,~~705~~352
Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-
NONCASH FINANCING AND INVESTING ACTIVITIES:
Original issue discount due to embedded derivative liabilities on convertible debt	$	~~489~~1,039,140		$	-40,000
Preferred stock issued for acquisition of Mobicash	$	-		$	4,330,060
Common stock issued to IPIN	$	-		$	164,521
Reclassification of prepaid expense to license agreement, net	$	-		$	10,000
Relative fair value of warrants issued as debt discount	$	-		$	19,543

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

IFAN Financial, Inc.

Notes to the consolidated financial statements

(Unaudited)

NOTE 1 – NATURE OF BUSINESS

The Company was incorporated in the State of Nevada on June 11, 2010 and established a fiscal year-end of August 31. The initial business plan was to develop and distribute an organic clothing line designed for children.

On April 2014, the Company abandoned the business plan as an organic children’s clothing company. In June 2014, the Company signed an agreement with MobiCash America, Inc. to develop technology solutions in the mobile payment and social media markets. The Company acquired MobiCash America on October 3, 2014 which consisted primarily of proprietary software code.

The Company and its wholly owned subsidiaries, iPIN Technologies, Inc. and Mobicash America, Inc., design, develop and distribute software that enhances and enable payments. Based in San Diego, the Company has a growing portfolio of solutions including a mobile optimized FDIC insured platform with the ability to facilitate on-demand payments, autopay, proximity payments and marketing, and a proprietary linked debit card. Our Platform additionally has ‘white label’ enterprise capabilities allowing for ~~more~~software licensing opportunities. We will additionally deploy a prepaid card program and facilitate off-platform merchant services we call IFAN FinTech. We are positioned to transact nearly all merchant payment needs including mobile, e-commerce, merchant processing, split-funding, ACH, and EMV.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, MobiCash America, Inc. and iPIN Technologies, Inc. Intercompany balances are eliminated upon consolidation.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure 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.

Basic and Diluted Net Loss per Share

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. Because the Company incurred a net loss during the quarters ended ~~February~~May 2931, 2016 and 2015, respectively, diluted loss excludes all potential common shares from diluted loss per share. At ~~February~~May 2831, 2016 and 2015, the Company had the following potentially issuable shares:

Three months ended February 29, 2016

Three months ended February 28, 2015

Six months ended February 29, 2016

Six months ended February 28, 2015

Three months ended May 31, 2016

Three months ended May 31, 2015

Nine months ended May 31, 2016

Nine months ended May 31, 2015

Convertible preferred stock

673,300,600

Convertible debt

1021,~~068~~502,~~251~~763

Warrants

750,000

~~925~~1,175,926

750,000

~~925~~1,175,926

Total

~~684~~695,~~118~~553,~~851~~363

674,~~226~~476,526

~~684~~695,~~118~~553,~~851~~363

674,~~226~~476,526

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

Fixed Assets

Computers and equipment are stated at cost and depreciated using the straight-line method over the two-year estimated useful lives of the assets.

Software

The estimated useful life of software costs capitalized is four years.

Derivative Liabilities

The Company follows Financial Accounting Standards Board, Derivatives and Hedging ASC 815-40, which limits the extent to which the conversion or exercise price of an instrument can be adjusted for subsequent transactions. The Company utilizes a two-step process to determine whether an instrument is indexed to its stock: (a) evaluate the instrument’s contingent exercise provisions, if any and (b) evaluate the instrument’s settlement provisions. If it is determined the instrument is not indexed to the Company’s stock, the instrument is recognized as a derivative at issuance and is measured at fair value at each reporting period and the change is recorded in earnings.

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable.

Stock-Based Compensation

The Company measures stock-based compensation cost at the grant date based on the fair value of the award and recognizes it as expense, over the vesting or service period, as applicable, of the stock award using the straight-line method.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations.

Fair Value Measurements

As defined in FASB ASC Topic No. 820 – 10, fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic No. 820 – 10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1:	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:	Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3:	Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company’s valuation models are primarily industry standard models. Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

As required by FASB ASC Topic No. 820 – 10, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

Subsequent Events

The Company has evaluated all transactions from ~~February~~May 2931, 2016 through the financial statement issuance date for disclosure consideration.

Recently Issued Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on the Company´s consolidated financial position, results of operations or cash flows.

NOTE 3 – GOING CONCERN

The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – ACQUISITION OF MOBICASH

On October 3, 2014, the Company acquired Mobicash America, Inc. (“Mobicash” d/b/a “Quidme”), a company incorporated under the laws of the State of California, through a Share Exchange Agreement whereby the Company issued 61,858 shares of Series A convertible preferred stock convertible into common stock at a conversion ratio of 700 common shares for 1 Series A preferred stock (the “Conversion Ratio”) to the shareholders of Mobicash. The Company determined that the fair value of the Series A convertible preferred stock was $4,330,060 on October 3, 2014.

The acquisition was accounted for as a business combination. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed at their respective fair values at the date of acquisition. The amounts related to the acquisition were allocated to the assets acquired and the liabilities assumed on the date of acquisition as follows:

	October 3, 2014
Total consideration paid	$	4,330,060
Software assets		4,704,264
Fixed assets		4,774
Total assets acquired		4,709,038
Accounts payable and accrued liabilities		373,978
Note payable		5,000
Total liabilities assumed	$	378,978

The Company evaluated the investment in the software assets acquired in the Mobicash acquisition for recoverability at ~~February~~May 2931, ~~2016~~ 2016 and concluded that no impairment was necessary.

NOTE 5 – NOTE RECEIVABLE

During July 2015, the Company purchased a $100,000 convertible promissory note from a third party (the “Investee”). The note bears interest at 6% per annum. All unpaid interest and principal shall be due and payable to the Company on or after May 29, 2017. In the event the Investee issues or sells shares of its equity securities to investors on or before May 29, 2017 with total proceeds of not less than $2,000,000 (excluding the conversion of notes), then the Company’s $100,000 note receivable and any unpaid accrued interest shall automatically convert into such equity securities of the Investee at a conversion price as defined in the convertible promissory note agreement. During the ~~six~~nine months ended ~~February~~May 2931, 2016, the Company recorded interest income of $34,~~028~~527 on this note receivable.

NOTE 6 – INVESTMENT

During the year ended August 31, 2014, the Company received 1,000,000 shares of common stock in IPIN Debit Network, Inc., which the Company recorded as an investment of $164,521. During the ~~six~~nine months ended ~~February~~May 2931, 2015, the Company fully impaired this investment.

NOTE 7 – FIXED ASSETS

The Company’s fixed assets consist of used computer equipment acquired in connection with the acquisition of Mobicash and have a remaining estimated useful life of one year. Property and equipment consist of the following:

	February 29, 2016			August 31, 2015
	May 31, 2016			August 31, 2015
Computer and Equipment	$	4,774		$	4,774
Less accumulated depreciation		(4,774	)		(2,772	)
Total	$	-		$	2,002

The Company recorded depreciation expense of $2,002 and $12,~~980~~772 during the ~~six~~nine months ending ~~February~~May 2931, 2016 and ~~February~~May 2831, 2015, respectively.

NOTE 8 – SOFTWARE ASSETS

Software assets consist of the following:

	February 29, 2016			August 31, 2015
	May 31, 2016			August, 2015
Software assets	$	4,766,764		$	4,766,764
Less accumulated amortization		(588,034	)		-
Less accumulated amortization and impairment		(944,550	)		-
Total	$	43,~~178~~822,~~730~~214		$	4,766,764

The Company recorded software amortization and impairment expense of $~~588~~944,~~034~~550 and $0 during the ~~six~~nine months ending ~~February~~May 2931, 2016 and ~~February~~ 28May 31, 2015, respectively.

NOTE 9 – NOTES PAYABLE

The Company has a $5,000 note payable to an individual due in November 2015. The note bears interest at 10% per annum and is past due.

NOTE 10 – CONVERTIBLE NOTES PAYABLE

Secured Promissory Note Agreement

Issuance in May and July 2015

On May 28, 2015, the Company and SBI Investments, LLC (“SBII”), completed a financing transaction that consisted of a Securities Purchase Agreement (the “SPA”), Two Secured Promissory Notes (the “Notes”), Stock Pledge Agreement (the “Pledge”), and Warrant Agreement, pursuant to which SBII agreed to loan the Company an aggregate of $550,000. The first note for $275,000 was issued by the Company on May 28, 2015 pursuant to the SPA and is due and payable on May 28, 2016 and accrues interest at 10% per annum payable at three, six and nine months from the issuance date. The second note for $275,000 was issued on July 15, 2015 and payable on May 28, 2016, and accrues interest at 10% per annum payable at three, six and nine months from the issuance date. Pursuant to the Pledge, the Company’s CEO and CFO pledged 11,000,000 shares in the aggregate of their restricted common stock to guarantee payment of the Notes issued pursuant to the SPA.

In connection with the issuance of the $550,000 of notes payable, the Company received cash proceeds of $482,500 and recorded a debt discount of $67,500 for the difference between the face value of the note and the cash proceeds. The Company also issued the lender 500,000 warrants in connection with the issuance of this debt with an exercise price of $0.50 per share and a term of 3 years. The Company determined the relative fair value of the warrants as of their issuance date using the following inputs; 3-year term; 141% - 145% volatility; 1% risk free rate; $0 dividends and determined the fair value was $27,~~636~~680, which the Company recorded as debt discount.

During the ~~six~~nine months ended ~~February~~May 2931, 2016, the Company recorded debt discount amortization of $5779,~~275~~121 on these notes payable.

~~NOTE~~Debt 10extinguishment –and ~~CONVERTIBLE~~convertible ~~NOTES PAYABLE~~notes

On May 2, 2016, the Company and a lender replaced its existing $275,000 promissory note originally issued during May 2015 with a $275,000 convertible note. The $275,000 convertible note is due on May 28, 2016 and has an interest rate of 8% per annum (the interest rate increases to 22% per annum in the event the convertible note is not repaid by the maturity date). Also, the amended convertible note is convertible at the lower of A) a 43% discount to the lowest trading price during the 20 trading days prior to the conversion or B) a 43% discount to the lowest trading price for the common stock during the 20 days prior to the execution of the convertible note. The conversion price of the convertible note also contains down-round price protection.

On May 2, 2016, the Company and a lender replaced its existing $275,000 promissory note originally issued during July 2015 with a $275,000 convertible note. The $275,000 convertible note is due on May 13, 2016 and has an interest rate of 8% per annum the interest rate increases to 22% per annum in the event the convertible note is not repaid by the maturity date). Also, the amended convertible note is convertible at the lower of A) a 43% discount to the lowest trading price during the 20 trading days prior to the conversion or B) a 43% discount to the lowest trading price for the common stock during the 20 days prior to the execution of the convertible note. The conversion price of the convertible note also contains down-round protection.

The number of shares of common stock to be issued upon conversion shall be determined by dividing the conversion amount by the applicable conversion price. The conversion amount means the principal amount of the convertible note and, at the lender´s option, accrued and unpaid interest, default interest, and any other amounts owed to the lender pursuant to the terms of these convertible notes.

The conversion price of the convertible notes is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair value of the conversion feature on the convertible notes was recognized as a derivative instrument at issuance and is measured at fair value at each reporting period.

As the fair value of the derivative liabilities exceeded the carrying value of the convertible notes payable, the Company recorded a $550,000 original issue discount on the convertible notes. See Note 11.

During the nine months ended May 31, 2016, the Company recorded debt discount amortization of $550,000 on these convertible notes.

These notes are currently in default for non-payment and are being renegotiated. The default interest rate on these notes is 22%.

The Company determined that there was no gain or loss on the debt extinguishments related to the replaced notes.

October 2015 Notes

During October 2015, the Company entered into an agreement with a third party whereby the Company received net cash proceeds of $243,500 in exchange for issuing two notes including a $165,000 convertible note payable bearing interest at 8% and a $110,000 convertible note payable bearing interest at 8% each due one year from the date of issuance. The notes payable are convertible at a rate of 80% of the average of the lowest 3 trading prices during the 20 trading day period ending on the last complete trading day prior to the conversion. Also, if at any time when the notes are issued and outstanding, the borrower issues or sells any share of common stock for no consideration or for consideration per share which is less than the conversion price in effect on the date of such issuance. The conversion price will be reduced to the amount of the consideration per share received by the borrower in such dilutive issuance.

As the fair value of the derivative liabilities exceeded the carrying value of the convertible notes payable, the Company recorded a $275,000 original issue discount on the convertible notes. See Note 11.

The Company also issued the lender 250,000 warrants in connection with the issuance of the convertible notes. See Note 12.

12During the nine months ended May 31, 2016, the Company recorded debt discount amortization of $159,123 on these notes.

December 2015 Note

During December 2015, the Company entered into an agreement with a third party whereby the Company received net cash proceeds of $98,000 in exchange for issuing a $100,000 convertible note payable bearing interest at 12% due 9 months from the date of issuance. The note payable is convertible at a conversion price: the lower of: A) a 43% discount to the lowest trading price during the previous twenty (20) trading days to the date of a Conversion Notice; or B) a 43% discount to the lowest trading price during the previous twenty (20) trading days before the date that this note was executed. At any time after the Prepayment Date, including prior to, upon, or after the Maturity Date the note is convertible.

The Company recorded the fair value of the derivative of $94,349 as an original issue discount on the convertible notes. See Note 11.

During the nine months ended May 31, 2016, the Company recorded debt discount amortization of $64,116 on this note.

February 2016 Note

During February 2016, the Company entered into an agreement with a third party whereby the Company received net cash proceeds of $60,000 in exchange for a $66,000 promissory note bearing interest at 12% due ~~one~~two ~~year~~years from the date of issuance. The note payable is convertible at the lesser of $0.093 or 60% of the lowest ~~trade~~traded price in the 25 trading days previous to the conversion.

As the fair value of the derivative liabilities exceeded the carrying value of the convertible note payable, the Company recorded a $66,000 original issue discount on the convertible notes. See Note 11.

~~See~~During ~~detail~~the ~~summary~~nine ~~below~~months ~~for~~ended ~~carrying~~May ~~value~~31, of2016, ~~convertible~~the ~~notes~~Company ~~payable~~recorded asdebt ofdiscount ~~February~~amortization 29of $3,628 ~~2016~~on this note.

Face value of debt upon issuance of convertible notes	$	441,000
Less: Original issue discount		(437,349	)
Carrying value at issuance		3,651
Amortization of debt discount		122,496
Carrying value at February 29, 2016		126,147
Less short-term portion		(125,342	)
Long-term convertible notes	$	805

See detail summary below for carrying value of convertible notes payable as of May 31, 2016.

Face value of debt upon issuance of convertible notes	$	991,000
Less: Original issue discount		(987,349	)
Carrying value at issuance		3,651
Amortization of debt discount		776,867
Carrying value at May 31, 2016		780,518
Less short-term portion		(776,890	)
Long-term convertible notes	$	3,628

NOTE 11 – EMBEDEDDED DERIVATIVE LIABILTIES

The Company determined that the convertible notes contain an embedded derivative instrument as the conversion price is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair value of the convertible notes were recognized as derivative instruments at issuance and is measured at fair value at each reporting period. The Company determined that the valuation of the derivative liabilities was $~~411~~474,~~137~~960 as of ~~February~~May 2931, 2016 on the convertible notes.

1314

The Company determined the fair values of the embedded derivatives on the grant dates using a black scholes model with the following assumptions:

●	Convertible notes payable - stock price on the issuance dates of $0.0908-$0.12 per share, term of 0.751-2 years, expected volatility of 148%-180%, discount rate of 0.85%-1.33%, expected dividends of 0%.
●	Convertible notes payable - stock price on the ~~February~~May 2931, 2016 of $0.0705 per share, term of 0~~.67~~ -1.9570 years, expected volatility of ~~157~~170%-~~180~~176%, and a discount rate of 01.9103%, expected dividends of 0%..

Activity for embedded derivative instruments during the ~~six~~nine months ended ~~February~~May 2931, 2016 was as follows:

Initial valuation

of embedded

Decrease

derivative

instruments

fair value of

Balance at

issued during

derivative

Balance at

August 31, 2015

the period

liabilities

~~February~~May 2931, 2016

Convertible notes

~~489~~1,039,140

(78564,~~003~~180

)

~~411~~474,~~137~~960

NOTE 12 – EQUITY

Common stock for cash

FYDuring the nine months ended May 31, 2016, the Company issued 1,250,000 shares of common stock pursuant to an equity line of credit for $65,000 of cash proceeds. See Equity Line of Credit below.

During the ~~six~~nine months ended ~~February~~May 2931, ~~2016~~2015, the Company ~~issued~~received 5$36,~~159,471~~600 ~~shares~~ of ~~common~~cash ~~stock~~proceeds ~~for~~pursuant ~~services.~~to ~~The~~subscription ~~Company~~agreements ~~recorded~~with third ~~stock-based~~parties ~~compensation~~to ~~expense~~purchase ~~of $471,170 based on the grant date fair value of the~~ common stock of the Company onfor ~~the~~$0.25 ~~issuance dates~~per share.

FYDuring the nine months ended May 31, 2015, the Company issued 128,200 shares of common stock pursuant to these subscription agreements. As of May 31, 2016, the Company has recorded a common stock payable of $4,550 as the Company has an obligation to issue the remaining 18,000 shares of common stock pursuant to the subscription agreements.

During the ~~six~~nine months ended ~~February~~May 2831, 2015, the Company received $36250,~~600~~000 of cash proceeds pursuant to a subscription ~~agreements~~agreement with an ~~third~~investor ~~parties~~ to purchase common stock of the Company for $0.2527 per share and an equal number of warrants. As of May 31, 2016, the Company has recorded a common stock payable of $250,000 related to its obligation to issue 925,926 shares of the Company’s common stock. See Warrants below.

~~During~~Common ~~the six months ended February 28, 2015, the Company has issued 128,200 shares of common~~ stock ~~pursuant~~for to these subscription agreements. As of February 28, 2015, the Company has recorded a common stock payable of $4,550 as the Company has an obligation to issue the remaining 18,000 shares of common stock pursuant to the subscription agreements.services

During the ~~six~~nine months ended ~~February~~May 2831, ~~2015~~2016, the Company ~~received~~issued ~~$250~~7,~~000~~159,471 shares of ~~cash proceeds pursuant to a subscription agreement with an investor to purchase~~ common stock ~~of the Company~~ for $0services.27 ~~per~~The ~~share and an equal number of warrants. As of February 28, 2015, the~~ Company ~~has~~ recorded ~~a common~~ stock-based compensation ~~payable~~expense of $~~250~~611,~~000~~170 ~~related~~based toon ~~its~~the ~~obligation~~grant todate ~~issue~~fair ~~925,926~~value ~~shares~~ of the ~~Company’s~~ common stock. ~~See~~of ~~Warrants~~the ~~below~~Company on the issuance dates.

During the ~~six~~nine months ended ~~February~~May 2831, ~~2015~~2016, the Company ~~issued~~granted 2an employee 500,~~023,~~000 shares of common stock for services. The Company recorded stock-based compensation expense of $~~990~~34,~~029~~000 based on the grant date fair value of the common stock of the Company on the grant date. As of May 31, 2016, the Company has recorded a common stock payable of $34,000 as the Company has an obligation to issue the 500,000 shares of common stock.

During the ~~six~~nine months ended ~~February~~May 2831, 2015, the Company issued 13,~~000~~398,~~000~~554 shares of ~~the~~common stock for services. The Company’s ~~common~~recorded stock-based compensation ~~valued~~expense atof $~~164~~1,~~521 to~~425,111 ~~IPIN~~based ~~which~~on ~~were~~the ~~recorded~~grant asdate ~~common~~fair ~~stock~~value ~~payable~~of atthe ~~August~~common ~~31,~~stock ~~2014.~~of ~~The~~the ~~1,000,000~~Company ~~shares~~on ~~were~~the ~~issued~~issuance ~~in January 2015~~dates.

14During the nine months ended May 31, 2015, the Company issued 1,000,000 shares of the Company’s common stock valued at $164,521 to IPIN which were recorded as common stock payable at August 31, 2014. The 1,000,000 shares were issued in January 2015.

~~Equity line of Credit~~15

Equity line of credit

During May 2015, the Company entered into a second Securities Purchase Agreement (the “Equity Line Agreement”) with SBII, pursuant to which the Company may issue and sell to SBII $2,000,000 of the Company’s common stock (the “Shares”) subject to a registration rights agreement. The aggregate maximum amount of all purchases that SBII shall be obligated to make under the Equity Line Agreement shall not exceed $2,000,000. The purchase price for the Shares to be paid by SBII shall be eighty percent (80%) of the average of the three (3) lowest closing daily prices of the Company’s common stock during the five (5) consecutive trading days prior to the date of the draw down notice from the Company to SBII or eighty five percent (85%) of the price on the fifth trading day of the draw down pricing period.

The Company did not sell any shares pursuant to the Equity Line Agreement during the six months ended February 29, 2016.

Preferred stock

During the ~~six~~nine months ended ~~February~~May 2831, 2015, the Company issued 61,858 shares of Series A preferred stock convertible into common stock of the Company as consideration for the acquisition of Mobicash. See Note 4.

Warrants

Pursuant to the issuance of convertible notes during the ~~six~~nine months ended ~~February~~May 2931, 2016, the Company issued warrants to the lender to purchase 250,000 shares of the Company’s common stock with a $0.12 per share exercise price. The warrants expire in October 2018. The Company determined the fair value of the warrants as of their measurement date using the following inputs; 3-year term; 160% volatility; 0.9% risk free rate; $0 dividends and determined the fair value was approximately $12,220. The intrinsic value of of these warrants as of ~~February~~May 2931, 2016 was $09,181.

	Number of Warrants			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted average remaining contractual life (years)
Outstanding at August 31, 2015		1,425,926		$	0.82	$	-		1.70
Granted		250,000			0.12		-		-
Exercised		-			-		-		-
Expired		(925,926	)		1.00		-		-
Outstanding and exercisable at February 29, 2016		750,000		$	0.37	$	-		2.43
Outstanding and exercisable at May 31, 2016		750,000		$	0.37		-		2.17

NOTE 13 – FAIR VALUE MEASUREMENTS

The following table sets forth, by level within the fair value hierarchy, the Company’s derivative liabilities that were accounted for at fair value on a recurring basis:

	Quoted Prices
	In Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Total
Description	(Level 1)		(Level 2)		(Level 3)		Carrying Value
As of August 31, 2015	$	-	$	-	$	-	$	-
As of February 29, 2016	$	-	$	-	$	411,137	$	411,137
As of May 31, 2016	$	-	$	-	$	474,960	$	474,960

1516

The following table sets forth a reconciliation of changes in the fair value of financial assets classified as Level 3 in the fair value hierarchy:

	Significant Unobservable Inputs (Level 3)
	Six months Ended February 29, 2016
	Nine months Ended May 31, 2016
Beginning balance	$	-
Additions		~~489~~1,039,140
Change in fair value of derivative liabilities		(78564,~~003~~180	)
Ending balance	$	~~411~~474,~~137~~960

NOTE 14 – RELATED PARTY TRANSACTIONS

As of ~~February~~May 2931, 2016 and August 31, 2015, the Company had related party notes payable of $~~400~~383,~~853~~455 and $282,436, respectively, ~~related~~ related to advances provided to the Company that are non-interest bearing with no specific repayment terms. As of ~~February~~May 2931, 2016, there were loans payable to two officers for $~~238~~231,~~932~~156 and $~~161~~152,~~921~~298, respectively. As of August 31, 2015, there were loans payable to two officers for $176,248 and $106,188, respectively.

NOTE 15 – COMMITMENTS AND CONTINGENCIES

In September 2015, the Company began legal proceedings against certain former officers, owners and shareholders of Mobicash, in connection with the acquisition of Mobicash by the Company. It is the Company’s contention that the officers and owners of Mobicash misrepresented the state of the Mobicash assets and products, as well as participated in manipulative and inappropriate accounting procedures. The former management has claimed approximately $379,000 of compensation and other expenses that were not disclosed to the Company as of the date of acquisition. Accordingly, the Company has recorded these claims in the accompanying financial statements as a contingency pending resolution of the dispute. Following is a summary of the claims recorded as accrued liabilities by the Company in the consolidated balance sheet. The status has not changed as of ~~February~~May 2931, 2016, and it is not possible at ~~this~~ this time to predict the timing or outcome of this dispute.

	February 29, 2016		August 31, 2015
	May 31, 2016		August 31, 2015
Accounts payable and accrued liabilities	$	110,463	$	110,463
Accrued salaries and payroll taxes		233,163		233,163
Advances		35,509		35,509
Total	$	379,135	$	379,135

The Company also assumed a $5,000 note payable in connection with the acquisition of Mobicash, which the Company recorded as short-term notes payable. See Note 9.

NOTE 16 – SUBSEQUENT EVENTS

Convertible Notes

The conversion price of the convertible notes is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The fair value of the conversion feature on the convertible notes will be recognized as derivative instruments at issuance and measured at fair value at each reporting period.

Common stock

During ~~April~~June ~~2015~~2016, the Company issued 2,~~000~~500,000 shares of common stock to ~~executives~~a ofthird ~~the~~party ~~Company~~for investor relations services for ~~compensation~~the Company valued at $~~140~~100,000.

During ~~April~~June ~~2015~~2016, the Company ~~granted~~issued ~~500~~150,000 shares of common stock to aan ~~director~~employee of the Company for compensation valued at $356,000.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

RESULTS OF OPERATIONS

Results for the Quarter Ended ~~February~~May 2931, 2016 Compared to the Quarter Ended ~~February~~May 2831, 2015

Revenues:

The Company’s revenues were $36268,294 for the quarter ended ~~February~~May 2931, 2016 compared to $0 in 2015. Revenues were in connection to the sale of a license agreement, compliance fees, and interchange generated off of a card program.

Expenses:

General and administrative expenses for the quarters ended ~~February~~May 2931, 2016 and 2015 were $~~393~~358,~~518~~549 and $1574,~~145~~577,~~434,~~ respectively. General ~~and~~ and administrative expenses consisted primarily of stock-based compensation, consulting fees, professional fees, management fees, office expenses and preparing reports and SEC filings relating to being a public company. The decrease was primarily due to the Company reducing stock-based compensation. The Company incurred $~~1,000~~0 and $7311,~~263~~284 of research and development expense during ~~the~~ the quarters ended ~~February~~May 2931, 2016 and 2015, respectively. The decrease was due to the Company reducing operations to conserve cash. During the quarter ended ~~February~~May 2931, 2016, the Company recorded software amortization expenses of $~~294~~354,~~017~~514 and $0 respectively. ~~The~~ The Company also recorded interest expense of $~~233~~705,~~738~~258 and a change in fair value of derivative liabilities of $~~424~~486,~~588~~177 during ~~the~~ the quarter ended ~~February~~May 2931, 2016.

Net Loss:

Net loss for the quarter ended ~~February~~May 2931, 2016 was $~~496~~662,~~119~~351 compared with a net loss of $1595,~~225,697~~627 for the quarter ended ~~February 28~~May 31, 2015. The decreased net loss is largely related to lower general and administrative expenses.

Results for the ~~Six~~Nine Months Ended ~~February~~May 2931, 2016 Compared to the ~~Six~~Nine Months Ended ~~February~~May 2831, 2015

Revenues:

The Company’s revenues were $36268,294 for the ~~six~~quarter ~~months~~ ended ~~February~~May 2931, 2016 compared to $0 in 2015. Revenues were in connection to the sale of a license agreement, compliance fees, and interchange generated off of a card program.

Expenses:

General and administrative expenses for the ~~six~~nine months ended ~~February~~May 2931, 2016 and 2015 were $1,~~013~~371,~~324~~873 and $1,~~146~~721,~~647~~224, respectively. ~~General~~ General and administrative expenses consisted primarily of stock-based compensation, consulting fees, professional fees, management fees, office expenses and preparing reports and SEC filings relating to being a public company. The decrease was primarily ~~attributable~~ due to ~~decreased~~the Company reducing stock-based compensation ~~offset by increased corporate activity as a result of the acquisition of Mobicash~~. The Company incurred $115,624 and $~~175~~186,~~417~~701 of research and development expense during the ~~six~~nine months ended ~~February~~May 2931, 2016 and 2015, respectively. The decrease was due to the Company reducing operations to conserve cash. During the ~~six~~nine months ended ~~February~~May 2931, 2016, the Company recorded software amortization expenses of $~~588~~942,~~034~~548 and $0 respectively. The Company also recorded interest expense of $~~301~~1,~~066~~006,324 and a change in fair value of derivative liabilities of $78564,~~003~~180 during the ~~six~~nine months ended ~~February~~May 2931, 2016.

Net Loss:

Net loss for the ~~six~~nine months ended ~~February~~May 2931, 2016 was $12,~~936~~599,~~981~~332 compared with a net loss of $12,~~501~~097,~~585~~212 for the ~~quarter~~nine months ended ~~February~~May 2831, 2015. The increased net loss is largely related to amortization of software and interest expense.

Impact of Inflation

We believe that the rate of inflation has had a negligible effect on our operations.

Liquidity and Capital Resources

Working Capital

	February 29, 2016			August 31, 2015
	May 31, 2016			August 31, 2015
	$			$
Current Assets		46135,~~281~~639			146,607
Current Liabilities		2,~~224~~413,~~651~~518			1,447,015
Working Capital Deficit		(2,~~178~~277,~~370~~879	)		(1,300,408	)

The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. Since its inception, the Company has been funded by related parties through capital investment and borrowing funds.

As of ~~February~~May 2931, 2016, total current assets were $46135,~~281~~639.

As of ~~February~~May 2931, 2016, total current liabilities were $2,~~224~~413,~~651~~518, which consisted of notes payable, convertible notes payable, ~~accrued~~ accrued expenses and accounts payable, related party payables, common stock payable and derivative liabilities. We had a working ~~capital~~ capital deficit of $2,~~178~~277,~~370~~879 as of ~~February~~May 2931, 2016.

Cash Flows

	Six Months Ended
	Nine Months Ended
	February 29, 2016			February 29, 2015
	May 31, 2016			May 31, 2015
Cash flows used in operating activities	$	(~~576~~534,~~009~~746	)	$	(~~293~~423,~~015~~795	)
Cash flows used in investing activities		-			(10,000	)
Cash Flows provided by financing activities		484,408			317,720
Cash flows provided by financing activities		532,009			689,147
Net increase (decrease) in cash during period	$	(912,~~601~~737	)	$	14255,~~705~~352

Cash flows from Operating Activities

During the ~~six~~nine months ended ~~February~~May 2931, 2016, cash used in operating activities was $~~576~~534,~~009~~746 compared to $~~293~~423,~~015~~795 for the ~~six~~nine months ended May ~~February 28~~31, 2015. The increase was primarily due to more operating expenses incurred by the Company as a result of increased ~~corporate~~ corporate activity following the acquisition of Mobicash.

Cash flows from Investing Activities

During the ~~six~~nine months ended ~~February~~May 2931, 2016, cash used in investing activities was $0 compared to $10,000 for the payment of a license during the ~~six~~nine months ended ~~February~~May 2931, 2015.

Cash flows from Financing Activities

During the ~~six~~nine months ended ~~February~~May 2931, 2016, cash ~~provided~~used byin financing activities was $~~484~~2,~~408~~737 compared to cash provided by financing activities of $~~317~~255,~~720~~352 for the ~~six~~nine months ended ~~February~~May 2831, 2015. ~~The increase was primarily due to issuing more debt instruments.~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of ~~November~~May 3031, ~~2015~~2016 due to the material weaknesses resulting from the Board of Directors not currently having any independent ~~members~~ members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and ~~controls~~ controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on December 15, 2015, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

Changes in Internal Control over Financial Reporting

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

The Company is not required by current SEC rules to include, and does not include, an auditor’s attestation report. The Company’s registered public accounting firm has not attested to Management’s reports on the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In September of 2015, the Company began legal proceedings against certain former officers, owners and shareholders of Mobicash, in connection with the acquisition of Mobicash by the Company. It is not possible at this time to predict the timing or outcome of this dispute. It is the Company’s contention that the officers and owners of Mobicash misrepresented the state of the Mobicash assets and products, as well as participated in manipulative and inappropriate accounting procedures. The former management claimed approximately $379,000 of compensation and other expenses that was not disclosed to the Company as of the date of acquisition. The Company does not believe it owes these liabilities. However, as of ~~February~~May 2931, 2016, the Company has recorded these obligations as a contingency.

Other than the foregoing, as of the date of this report we know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, Item 1A., “Risk Factors” in our Annual Report on Form 10-K, for the fiscal year ended August 31, 2015. The information set forth in these Reports could materially affect the Company’s business, financial position and results of operations. There are no material changes from the risk factors set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Forms 10-K for the fiscal year ended August 31, 2015.

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

Quarterly Issuances:

During the ~~six~~nine months ended ~~February~~May 2931, 2016, the Company issued ~~750~~7,~~000~~159,471 shares of common stock for services. The Company recorded stock-based compensation expense of $611,170 based on the grant date fair value of the common stock of the Company on the issuance dates.

During the nine months ended May 31, 2016, the Company granted an employee 500,000 shares of common stock for services. The Company recorded stock-based compensation expense of $34,000 based on the grant date fair value of the common stock of the Company on the grant date. As of May 31, 2016, the Company has recorded a common stock payable of $34,000 as the Company has an obligation to issue the 500,000 shares of common stock.

We claim an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) since the foregoing issuance did not involve a public offering, the recipient took the securities for investment and not resale, the recipient took securities in exchange for other securities already held in the Company, we took appropriate measures to restrict transfer, and the recipient had access to similar documentation and information as would be required in a Registration Statement under the Act. No underwriters or agents were involved in the foregoing issuance and the Company paid no underwriting discounts or commissions

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibit	Filing Date
2.01	Share Exchange Agreement by and between the Company and Mobicash America, Inc., dated June 6, 2014	Filed with the SEC on October 6, 2014 as part of our Current Report on Form 8-K.
3.1	Articles of Incorporation	Filed with the SEC on December 27, 2011 as part of our Registration of Securities on Form S-1.
3.1(a)	Amended and Restated Articles of Incorporation	Filed with the SEC on May 12, 2014 as part of our Current Report on Form 8-K.
3.2	Bylaws	Filed with the SEC on December 27, 2011 as part of our Registration of Securities on Form S-1.
3.3	Certificate of Designation	Filed with the SEC on May 12, 2014 as part of our Current Report on Form 8-K.
4.01	2015 Equity Compensation Plan.	Filed with the SEC on February 5, 2015 as part of our Form S-8 Registration.
4.02	Form of Registration Rights Agreement.	Filed with the SEC on June 2, 2015 as part of our Current Report on Form 8-K.
10.01	License Agreement by and between the Company and IPIN Debit Network Inc., dated May 15, 2014	Filed with the SEC on May 21, 2014, as part of our Current Report on Form 8-K.
10.02	Share Exchange Agreement by and between the Company and Mobicash America, Inc. D/B/A Quidme, dated June 6, 2014	Filed with the SEC on July 21, 2014, as part of our Quarterly Report on Form 10-Q.
10.03	Amended Share Exchange Agreement by and between the Company and Mobicash America, Inc. D/B/A Quidme, dated October 3, 2014	Filed with the SEC on October 6, 2014, as part of our Current Report on Form 8-K.
10.04	Form of Subscription Agreement	Filed with the SEC on December 2, 2014, as part of our Current Report on Form 8-K.
10.05	Form of Warrant Agreement	Filed with the SEC on December 2, 2014, as part of our Current Report on Form 8-K.
10.06	Form of Secured Promissory Note.	Filed with the SEC on June 2, 2015, as part of our Current Report on Form 8-K.
10.07	Form of Stock Pledge Agreement.	Filed with the SEC on June 2, 2015, as part of our Current Report on Form 8-K.
10.08	Form of Warrant Agreement.	Filed with the SEC on June 2, 2015, as part of our Current Report on Form 8-K..
10.09	Form of Equity Line of Credit.	Filed with the SEC on June 2, 2015, as part of our Current Report on Form 8-K..
16.01	Responsive Letter from Anton & Chia, LLP	Filed with the SEC on October 15, 2014 as part of our Amended Current Report on Form 8-K/A.
16.02	Responsive Letter from Kyle L. Tingle.	Filed with the SEC on May 1, 2015, as part of our Amended Current Report on Form 8-K/A.
21.01	List of Subsidiaries	Filed with the SEC on October 6, 2014, as part of our Current Report on Form 8-K.
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01	Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
32.02	Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
101.INS*	XBRL Instance Document	Furnished herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document	Furnished herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document	Furnished herewith.
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document	Furnished herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document	Furnished herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document	Furnished herewith.

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		IFAN Financial, Inc.
Dated: May 26, 2016		/s/ J. Christopher Mizer
		J. Christopher Mizer
		Its: President and Chief Executive Officer
Dated: May 26, 2016		/s/ Steve Scholl
		Steve Scholl
		Its: Chief Financial Officer, Treasurer and Secretary

	IFAN Financial, Inc.

Dated:	/s/ J. Christopher Mizer
	J. Christopher Mizer
	Its: President and Chief Executive Officer

Dated:	/s/ Steve Scholl
	Steve Scholl
	Its: Chief Financial Officer, Treasurer and Secretary

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

Dated: May 26, 2016		/s/ J. Christopher Mizer
		By: J. Christopher Mizer
		Its: Director
Dated: May 26, 2016		/s/ Steve Scholl
		By: Steve Scholl
		Its: Director
Dated: May 26, 2016		/s/ John C. De Puy
		By: John C. De Puy
		Its: Director
Dated: May 26, 2016		/s/ Jason Aplin
		By: Jason Aplin
		Its: Director

Dated:	/s/ J. Christopher Mizer
	By: J. Christopher Mizer
	Its: Director

Dated:	/s/ Steve Scholl
	By: Steve Scholl
	Its: Director

Dated:	/s/ John C. De Puy
	By: John C. De Puy
	Its: Director

Dated:	/s/ Jason Aplin
	By: Jason Aplin
	Its: Director

Filing Compare · IFAN FINANCIAL, INC.