Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 18, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | OLB GROUP, INC. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 14,702,804 | ||
Entity Public Float | $ 59,431,844 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001314196 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-52994 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 13-4188568 | ||
Entity Address, Address Line One | 200 Park Avenue | ||
Entity Address, Address Line Two | Suite 1700 | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10166 | ||
City Area Code | (212) | ||
Local Phone Number | 278-0900 | ||
Title of 12(b) Security | None | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 229 | ||
Auditor Name | Daszkal Bolton LLP | ||
Auditor Location | Boca Raton, Florida |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash | $ 3,470,339 | $ 3,824,491 |
Accounts receivable, net | 670,822 | 355,994 |
Prepaid expenses | 15,064 | 15,754 |
Other current assets | 729,351 | 8,768 |
Total Current Assets | 4,885,576 | 4,205,007 |
Other Assets: | ||
Property and equipment, net | 8,967,096 | 19,807 |
Intangible assets, net | 23,964,180 | 2,640,816 |
Goodwill | 6,858,216 | 6,858,216 |
Operating lease right-of-use assets | 402,538 | 269,508 |
Other long-term assets | 451,885 | 384,148 |
Total Other Assets | 40,643,915 | 10,172,495 |
TOTAL ASSETS | 45,529,491 | 14,377,502 |
Current Liabilities: | ||
Accounts payable | 501,762 | 359,968 |
Accrued expenses | 416,182 | 103,634 |
Merchant portfolio purchase installment obligation | 2,000,000 | |
Operating lease liability – current portion | 133,180 | 85,598 |
Note payable – current portion | 450,000 | |
Total Current Liabilities | 3,051,124 | 999,200 |
Long Term Liabilities: | ||
Notes payable, net of current portion | 7,441,076 | |
Operating lease liability – net of current portion | 273,166 | 185,045 |
Total Liabilities | 3,324,290 | 8,625,321 |
Commitments and contingencies (Note 10) | ||
Stockholders’ Equity: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding | ||
Series A Preferred stock, $0.01 par value, 10,000 shares authorized, 4,633 shares issued and outstanding at December 31, 2021 and 2020, respectively | 46 | 46 |
Common stock, $0.0001 par value, 200,000,000 shares authorized, 11,984,396 and 6,170,054 shares issued and outstanding at December 31, 2021 and 2020, respectively | 1,197 | 617 |
Additional paid-in capital | 67,810,922 | 26,380,124 |
Accumulated deficit | (25,606,964) | (20,628,606) |
Total Stockholders’ Equity | 42,205,201 | 5,752,181 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 45,529,491 | $ 14,377,502 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 11,984,396 | 6,170,054 |
Common stock, shares outstanding | 11,984,396 | 6,170,054 |
Series A Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 4,633 | 4,633 |
Preferred stock, shares outstanding | 4,633 | 4,633 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | ||
Transaction and processing fees | $ 15,810,626 | $ 8,358,459 |
Merchant equipment rental and sales | 131,802 | 88,538 |
Revenue, net - cryptocurrency mining | 304,004 | |
Other revenue from monthly recurring subscriptions | 464,327 | 1,319,624 |
Total revenue | 16,710,759 | 9,766,621 |
Operating expenses: | ||
Processing and servicing costs, excluding merchant portfolio amortization | 13,480,212 | 6,003,931 |
Amortization and depreciation expense | 1,890,899 | 844,423 |
Salaries and wages | 2,126,451 | 1,363,451 |
Professional fees | 1,590,520 | 769,159 |
General and administrative expenses | 2,387,416 | 1,520,362 |
Total operating expenses | 21,475,498 | 10,501,326 |
Loss from operations | (4,764,739) | (734,705) |
Other income (expense): | ||
Interest expense | (116,737) | (807,982) |
Interest expense, related party | (235,951) | |
Gain on forgiveness of debt | 236,231 | |
Litigation expense | (333,158) | |
Other income | 45 | 1,911 |
Total other expense | (213,619) | (1,042,022) |
Net Loss | $ (4,978,358) | $ (1,776,727) |
Net loss per share, basic and diluted (in Dollars per share) | $ (0.63) | $ (0.31) |
Weighted average shares outstanding, basic and diluted (in Shares) | 7,918,263 | 5,711,266 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 541 | $ 16,050,938 | $ (18,851,879) | $ (2,800,400) | |
Balance (in Shares) at Dec. 31, 2019 | 5,411,905 | ||||
Stock based compensation | 298,381 | 298,381 | |||
Conversion of debt – related party | $ 46 | 4,634,396 | 4,634,442 | ||
Conversion of debt – related party (in Shares) | 4,633 | ||||
Common stock units issued for cash | $ 70 | 4,942,811 | 4,942,881 | ||
Common stock units issued for cash (in Shares) | 700,000 | ||||
Warrants sold for cash | 155,380 | 155,380 | |||
Common stock issued for exercise of warrants | $ 2 | 94,498 | 94,500 | ||
Common stock issued for exercise of warrants (in Shares) | 21,150 | ||||
Common stock issued for services – related party | $ 4 | 203,720 | 203,724 | ||
Common stock issued for services – related party (in Shares) | 36,999 | ||||
Net loss | (1,776,727) | (1,776,727) | |||
Balance at Dec. 31, 2020 | $ 46 | $ 617 | 26,380,124 | (20,628,606) | 5,752,181 |
Balance (in Shares) at Dec. 31, 2020 | 4,633 | 6,170,054 | |||
Stock based compensation | 296,042 | 296,042 | |||
Common stock issued exercise of warrants – related party | $ 16 | 16 | |||
Common stock issued exercise of warrants – related party (in Shares) | 159,103 | ||||
Options issued for intangible assets | 4,499,952 | 4,499,952 | |||
Common stock issued for director service | $ 3 | 165,006 | 165,009 | ||
Common stock issued for director service (in Shares) | 35,639 | ||||
Common stock units issued for cash | $ 338 | 28,379,312 | 28,379,650 | ||
Common stock units issued for cash (in Shares) | 3,387,696 | ||||
Common stock issued for exercise of warrants | $ 223 | 8,090,486 | 8,090,709 | ||
Common stock issued for exercise of warrants (in Shares) | 2,231,904 | ||||
Net loss | (4,978,358) | (4,978,358) | |||
Balance at Dec. 31, 2021 | $ 46 | $ 1,197 | $ 67,810,922 | $ (25,606,964) | $ 42,205,201 |
Balance (in Shares) at Dec. 31, 2021 | 4,633 | 11,984,396 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,978,358) | $ (1,776,727) |
Adjustments to reconcile net loss to net cash provided by and used in operations: | ||
Depreciation and amortization | 1,890,899 | 861,269 |
Stock based compensation | 296,042 | 298,381 |
Common stock issued for services – related party | 165,009 | 203,724 |
Operating lease expense | 2,674 | 1,134 |
Gain on forgiveness of debt | (236,231) | |
Changes in assets and liabilities: | ||
Accounts receivable | (314,828) | 123,410 |
Prepaid expenses and other current assets | (719,893) | 101,068 |
Other long-term assets | (67,738) | (67,635) |
Accounts payable | 141,794 | (232,885) |
Accrued expenses – related party | 235,952 | |
Other accrued liabilities | 312,548 | 25,242 |
Deferred revenue | (99,594) | |
Net cash provided by (used in) operating activities | (3,508,082) | (326,661) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (9,596,599) | |
Acquisition of intangible assets | (16,065,001) | (150,000) |
Net cash used in investing activities | (25,661,600) | (150,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable | 236,231 | |
Payments on note payable | (7,654,845) | (1,845,155) |
Proceeds from exercise of warrants | 8,090,709 | 94,500 |
Proceeds from sale of common stock units | 28,379,650 | 5,446,000 |
Proceeds from exercise of options – related party | 16 | |
Proceeds from sale of warrants | 154,775 | |
Payment of deferred offering costs | (292,815) | |
Net cash provided by financing activities | 28,815,530 | 3,793,536 |
Net change in cash | (354,152) | 3,316,875 |
Cash – beginning of year | 3,824,491 | 507,616 |
Cash – end of year | 3,470,339 | 3,824,491 |
Cash paid for: | ||
Interest | 116,736 | 813,483 |
Income taxes | ||
Supplemental non-cash disclosure: | ||
Establishment of ROU operating lease asset and related liability | 233,308 | 323,812 |
Conversion of debt – related party | 4,634,442 | |
Merchant portfolio purchase installment obligation | 2,000,000 | |
Options issued for acquisition of natural gas rights | $ 4,499,952 |
Background
Background | 12 Months Ended |
Dec. 31, 2021 | |
Background [Abstract] | |
BACKGROUND | NOTE 1 – BACKGROUND Background The OLB Group, Inc. (“OLB” the “Company”) was incorporated in the State of Delaware on November 18, 2004 and provides services through its wholly-owned subsidiaries and business segments. Fintech Services: The Company provides integrated financial and transaction processing services (“Fintech Services”) to businesses throughout the United States. Through its eVance Capital, Inc. subsidiary (“eVance”), the Company provides an integrated suite of third-party merchant payment processing services and related proprietary software enabling products that deliver credit and debit card-based internet payment processing solutions primarily to small and mid-sized merchants operating in physical “brick and mortar” business environments, on the internet and in retail settings requiring both wired and wireless mobile payment solutions. eVance operates as an independent sales organization (“ISO”) generating individual merchant processing contracts in exchange for future residual payments. As a wholesale ISO, eVance has a direct contractual relationship with the merchants and takes greater responsibility in the approval and monitoring of merchants than do retail ISOs and as a result, receives additional consideration for this service and risk. The Company’s Securus365, Inc. (“Securus365”) subsidiary operates as a retail ISO and receives residual income as commission for merchants it places with third party processors. CrowdPay.us, Inc. (“CrowdPay”) is a Crowdfunding platform used to facilitate a capital raise anywhere from $1,000,000 -$50,000,000 of various types of securities under Regulation D, Regulation Crowdfunding, Regulation A and the Securities Act of 1933. To date, the activities of this subsidiary have been nominal. OmniSoft.io, Inc. (“OmniSoft”) operates a software platform for small merchants. The Omnicommerce applications work on an iPad, mobile device and the web and allows customers to sell a store’s products in a physical, retail setting. To date, the activities of this subsidiary have been nominal when compared to the overall business. On May 14, 2021, the Company formed OLBit, Inc., a wholly owned subsidiary (“OLBit”). The purpose of OLBit is to hold the Company’s assets and operate its business related to its emerging cryptocurrency-related lending and transactional business. Cryptocurrency Business: On July 23, 2021, the Company formed DMINT, Inc., a wholly owned subsidiary (“DMINT”). The purpose of DMINT is to operate its business related to cryptocurrency mining (“Cryptocurrency Business”). On July 28, 2021, the Company entered into an exclusive agreement with Cai Energy Blockchain, Inc. (“CAI”) whereby CAI provided the Company with an exclusive natural gas supply agreement (the “Services”). In exchange for the Services, the Company granted CAI options to purchase up to 767,918 shares of Common Stock, $0.0001 par value (with a fair value of approximately $4.5 million on the date of grant) at an exercise price of $0.0001 per share. The natural gas will be used in connection with the Company’s, newly launched, cryptocurrency mining business. The Company also provides ecommerce development and consulting services on a project-by-project basis. The Company generates its revenue through two business segments its Fintech Services and Cryptocurrency Business segments. COVID-19 Impact On January 30, 2020, the World Health Organization declared the COVID-19 (coronavirus) outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. The virus and actions taken to mitigate its spread have had and are expected to continue to have a broad adverse impact on the economies and financial markets of many countries, including the geographical areas in which the Company operates. In response to the pandemic, the Company has been working with merchants to address potential changes to the purchase patterns of consumers. In addition, it has been focusing on servicing merchants that sell products with an extended delivery time frame, that have products that are paid for in advance, and that work in the catering, ticketing, limo and travel related businesses which have been directly impacted by the social distancing requirement of the pandemic. Further, for those of the Company’s employees that are able to perform their job remotely, the Company implemented a “remote work” policy and provided employees with the technology necessary to continue to do their jobs from home and for those employees that are unable to perform their job from a remote location, the Company has taken steps to ensure appropriate distancing, continue to require wearing masks in the office and added sanitizing stations along with requiring frequent hand washing and work station cleaning. In addition, the Company has been encouraging its employees to get vaccinated, if possible. At December 31, 2021, most employees were no longer working remotely and had returned to the office. However, the Company continues to monitor and follow the advice of federal and state authorities. The Company has not seen a material impact on its business since states began to roll back restrictions on businesses in the United States. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP 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. The Company’s accounting estimates include the collectability of receivables, useful lives of long-lived assets and recoverability of those assets, impairment in fair value of goodwill, valuation allowances for income taxes, stock-based compensation. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, CrowdPay, Omnisoft, OLBit and DMINT. All significant intercompany transactions and balances have been eliminated. Reclassifications Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for year ended December 31, 2021. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”). As of December 31, 2021, the Company had $3,220,339 of cash in excess of the FDIC’s $250,000 coverage limit. Operating Segments Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the chief executive officer and Vice President. The Company has two operating segments as of December 31, 2021. See Note 15, “Segment Information”. Stock-based compensation We account for equity-based transactions with employees and non-employees under the provisions of FASB ASC Topic 718, “Compensation – Stock Compensation” (Topic 718) Net Loss per Share Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive potentially outstanding shares of common stock during the period. The weighted average number of common shares for the year ended December 31, 2021 and 2020 does not include warrants to acquire 9,963,127 and 3,353,698 shares of common stock, respectively, because of their anti-dilutive effect. The weighted average number of common shares for the year ended December 31, 2021 and 2020 does not include 772,362 and 172,438 options, respectively, to purchase common stock because of their anti-dilutive effect. Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are amortized over the lesser of the remaining term of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are expensed as incurred. Impairment of Long-Lived Assets The Company periodically reviews the carrying value of its long-lived assets held and used at least annually or when events and circumstances warrant such a review. If significant events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company determines whether impairment has occurred for the group of assets for which it can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, it measures any impairment by comparing the fair value of the asset group to its carrying value. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded. Merchant Portfolios Merchant portfolios are valued at fair value of merchant customers on the date of acquisition and are amortized over their estimated useful lives (7 years). Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Accounts Receivable Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, management considers all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required; however, CrowdPay has a recorded an allowance of approximately $0 and $38,000 as of December 31, 2021 and 2020, respectively. Reserve for Chargeback Losses Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly. Revenue Recognition and Cost of Revenues The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. In the case of “wholesale” residual revenue in which the Company has a direct contractual relationship with the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees as expenses. In cases of residual revenue where the Company is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue. Disaggregation of Revenue The following table presents the Company’s revenue disaggregated by revenue source: For the Years 2021 2020 Revenue from contracts with customers: Wholesale contracts $ 13,336,832 $ 5,106,588 Retail contracts $ 1,680,680 $ 2,242,164 Other transaction and processing fees $ 1,693,247 $ 2,417,869 Total transactions and processing fees $ 16,710,759 $ 9,766,621 The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps: ● Identification of a contract with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when or as the performance obligations are satisfied. Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Shipping and handling activities associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point in time at which control of the goods transfers to the customer. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Transaction and processing fees Fees for the Company’s transaction and processing arrangements are typically billed and paid on a monthly basis. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar, volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. These merchant services represent a single performance obligation satisfied over time and that the same measure of progress should be used to measure the Company’s progress toward complete satisfaction of the performance obligation. The Company will recognize revenue on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance as the best measure of the transfer of control. In wholesale contracts, the Company recognizes transaction and processing fees on a gross basis as the Company is the principal in the merchant services. The Company has concluded it is the principal because it has a direct contractual relationship with the merchant, is primarily responsible for the delivery of services to the merchants, including performing underwriting, has discretion in setting prices, and bears risk of chargebacks and other merchant losses. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the principal, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees within cost of revenues. In retail contracts, the Company is not responsible for merchant underwriting, has no chargeback liability and has no or limited contractual relationship with the merchant. As such, the Company records the net amount it receives from the processor, after interchange and other interchange and other processing fees, as revenue. Merchant equipment sales and other The Company generates revenue through the sale and rental of merchant equipment. The Company satisfies its performance obligation upon delivery of equipment to merchants and recognizes revenue at a point in time. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices customers upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing. The Company offers hardware installment sales to customers with terms ranging from three to forty-eight months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less. Cryptocurrency mining The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Each individual unit of cryptocurrency held by the Company is a separate unit of account. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the Financial Accounting Standards Board (“FASB”), the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. |
Liquidity and Capital Resources
Liquidity and Capital Resources | 12 Months Ended |
Dec. 31, 2021 | |
Liquidity And Capital Resources [Abstract] | |
LIQUIDITY AND CAPITAL RESOURCES | NOTE 3 – LIQUIDITY AND CAPITAL RESOURCES At December 31, 2021, the Company had cash of approximately $3.5 million and working capital of approximately $1,800,000. As such, the Company believes it has sufficient liquidity to fund its future operations and capital requirements for a period of at least twelve months from the date these consolidated financial statements are issued. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS Intangible assets, net, consist of the following as of: December 31, December 31, Merchant Portfolios $ 2,405,000 $ 2,340,000 Less accumulated amortization (1,562,798 ) (1,199,184 ) Net residual portfolios $ 842,202 $ 1,140,816 December 31, December 31, Trade name $ 2,500,000 $ 2,500,000 Less accumulated amortization (1,500,000 ) (1,000,000 ) Net trade name $ 1,000,000 $ 1,500,000 December 31, December 31, CBD Merchant Portfolio $ 18,000,000 $ — Less accumulated amortization (190,476 ) — Net trade name $ 17,809,524 $ — December 31, December 31, Exclusive agreement to purchase natural gas $ 4,499,952 $ — Less accumulated amortization (187,498 ) — Net mineral rights $ 4,312,454 $ — Total intangible assets, net $ 23,964,180 $ 2,640,816 Amortization expense for the years ended December 31, 2021 and 2020 was $1,241,589 and $844,423, respectively. The Company’s merchant portfolios and tradename are being amortized over respective useful lives of 7 and 5 years. The Company’s agreement to purchase natural gas is being amortized over the useful life of 10 years. The following sets forth the estimated amortization expense related to amortizing intangible assets for the years ended December 31: 2022 $ 3,858,090 2023 3,834,281 2024 3,320,234 2025 3,021,424 2026 3,021,424 Thereafter 6,908,727 Total $ 23,964,180 The weighted average remaining useful life of amortizing intangible assets was 6.20 years at December 31, 2021. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT Long lived assets, including property and equipment assets to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. Property and equipment are first recorded at cost. Depreciation and is computed using the straight-line method over the estimated useful lives of the various classes of assets. Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income. Assets stated at cost, less accumulated depreciation consisted of the following: December 31, December 31, Furniture and Fixtures $ 36,471 $ 36,471 Office Equipment 474,873 288,273 Computer Software 182,345 182,345 Leasehold Improvements 17,877 17,877 Cryptocurrency Mining Equipment 9,410,000 — Total 10,121,566 — Less accumulated depreciation (1,154,470 ) (505,159 ) Property and Equipment, net $ 8,967,096 $ 19,807 Depreciation expense Depreciation expense for the years ended December 31, 2021 and 2020 was $649,310 and $16,846, respectively. |
Note Payable
Note Payable | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
NOTE PAYABLE | NOTE 6 – NOTE PAYABLE On April 8, 2018, eVance, Omnisoft, and CrowdPay, (collectively, the “Borrowers”), entered into a term loan of $12,500,000 with GACP (the “Term Loan”) which obligations are guaranteed by the Company (collectively with the Borrowers, the “Loan Parties”), under the Loan and Security Agreement (the “Credit Agreement”). On March 2, 2021, the Company transferred cash in the amount of $7,712,256.28 to the Agent under the Credit Agreement (the “Prepayment”). The Prepayment facilitated the discharge in full of all of the obligations under the Credit Agreement. In connection with the extinguishment of the obligations under the Credit Agreement, 40,000 warrants to purchase Common Stock were cancelled. On May 6, 2020, the Company received a Paycheck Protection Program loan under the CARES Act for $236,231 (the “PPP Loan”). The PPP Loan matures on May 7, 2022 and bears interest at 1% per annum. Monthly amortized principal and interest payments are deferred for 6 months after the date of the agreement. The Paycheck Protection Program provides that the use of PPP Loan proceeds were limited to certain qualifying expenses and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act. The Company received notice on October 11, 2021 that the $236,000 PPP Loan had been entirely forgiven resulting in the recognition of a gain on extinguishing of debt. On November 24, 2021, we entered into an Asset Purchase Agreement (the “Agreement”) dated as of November 15, 2021 with FFS Data Corporation (“Seller”) whereby we acquired a portfolio of merchants in the Cannabidiol (or “CBD”) industry, along with other merchants utilizing financial transaction processing services (the “Purchased Assets”). The purchase price is $20 million, with $16 million paid at closing, $2 million payable within six months after closing, and a $2 million payment to be transferred to an escrow account, contingent upon an Attrition Adjustment, as described in the Agreement. Company management has not recognized a liability for the contingent payment amount. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 7 – STOCK OPTIONS On January 1, 2021, the Company granted stock options to purchase 6,667 shares of common stock pursuant to the terms on the Company’s employment agreement with Mr. Yakov. The grant shall vest at the rate of 1/3 beginning on each anniversary of the effective date of grant. The options have an exercise price of $0.001 per share and expire in three years after each vest date. The aggregate fair value of the options totaled $32,793 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $0.001, 0.16% risk free rate, 35.03% volatility and expected life of the options of 3 years. The fair value is being amortized over the applicable vesting period and credited to additional paid in capital. On July 28, 2021, the Company entered into an exclusive agreement with Cai Energy Blockchain, Inc. (“CAI”) whereby CAI provided the Company with an exclusive natural gas supply agreement (the “Services”). In exchange for the Services, the Company granted CAI options to purchase up to 767,918 shares of Common Stock, $0.0001 par value (with a fair market value equal to $4.5 million on the date of grant) at an exercise price of $0.0001 per share. The aggregate fair value of the options totaled $4,499,952 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $0.0001, 1.26% risk free rate, 143.3% volatility and expected life of the options of 10 years. A summary of the status of the Company’s outstanding stock options and changes during the nine months ended December 31, 2021 is presented below: Stock Options Options Weighted Average Aggregate Options outstanding at January 1, 2020 278,506 $ 0.0001 - Granted 6,667 $ 0.001 - Exercised - $ - - Forfeited - $ - - Options outstanding December 31, 2020 285,173 $ 0.0001 $ 1,408,755 Granted 774,585 0.0001 - Exercised (159,103 ) $ - - Expired (6,667 ) $ - - Options outstanding December 31, 2021 893,988 $ 0.0001 $ 2,369,065 Shares exercisable at December 31, 2021 772,361 $ 0.0001 $ 2,046,759 |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2021 | |
Warrant [Abstract] | |
WARRANTS | NOTE 8 – WARRANTS On August 6, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp., acting as representative of the underwriters (“Aegis”), pursuant to which the Company agreed to sell to the underwriters in a firm commitment underwritten public offering (the “Offering”) an aggregate of 700,000 units (the “Units”), with each Unit consisting of: (a) one share of our common stock; (b) two Series A warrants (the “Series A Warrants”), with each Series A Warrant entitling the holder thereof to purchase one share of our common stock at an exercise price equal to $9.00 per share, exercisable until the fifth anniversary of the issuance date, subject to their earlier redemption as described therein; and (c) one-half of one Series B warrant (the “Series B Warrants,” and together with the Series A Warrants, the “Warrants”), with each whole Series B Warrant entitling the holder thereof to purchase one share of common stock at an exercise price equal to $4.50 per share, exercisable until the fifth anniversary of the issuance date and subject to their earlier redemption as described therein. The Company also granted the underwriters a 45-day option to purchase up to an additional 105,000 shares of common stock, and/or an additional 210,000 Class A Warrants to purchase shares of common stock and/or an additional 52,500 Class B Warrants to purchase shares of common stock as may be necessary to cover over-allotments in connection with the Offering. The Offering, including the exercise in full of the over-allotment option for the Warrants, closed on August 11, 2020. The Units and the securities underlying the Units were offered by the Company pursuant to a registration statement on Form S-1, as amended (File No. 333-232368), filed with the Securities and Exchange Commission (the “Commission”), which was declared effective by the Commission on August 6, 2020 (the “Registration Statement”). The net proceeds to the Company from the Offering, after deducting the underwriting discount, the underwriters’ fees and expenses and the Company’s Offering expenses, was approximately $4.9 million. The Company utilized $1,120,155 of the net proceeds to repay a portion of the Company’s long-term indebtedness (the “Term Loan”) and the remainder of the net proceeds from the Offering for working capital and other general corporate purposes and to acquire merchant portfolios and technologies that are synergistic with or complimentary to our business and expand our current products (including payment of outstanding accounts payable). Warrants The Warrants were issued in registered form under separate warrant agent agreements (each a “Warrant Agent Agreement”) between us and our warrant agent, Transfer Online, Inc. (the “Warrant Agent”). Each Series A Warrant entitles the registered holder to purchase one share of our common stock at a price equal to $9.00 per share, subject to adjustment as discussed below, terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of issuance. No fractional warrants will be issued and only whole warrants are exercisable. The exercise price and number of shares of common stock issuable upon exercise of the Series A Warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary dividend on or recapitalization, reorganization, merger or consolidation. If we fail to maintain a current prospectus or prospectus relating to the common stock issuable upon the exercise of the Series A Warrants, such holders may exercise their Series A warrants on a “cashless” basis pursuant to a formula set forth in the terms of the Series A Warrants. Each whole Series B Warrant entitles the holder thereof to purchase one share of our common stock at an exercise price of $4.50 per share, subject to adjustment as discussed below, terminating at 5:00 p.m., New York City time, on the fifth (5th) anniversary of the date of issuance. No fractional warrants will be issued and only whole warrants are exercisable. The exercise price and number of shares of common stock issuable upon exercise of a whole Series B Warrant may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary dividend on or recapitalization, reorganization, merger or consolidation. If we fail to maintain a current prospectus or prospectus relating to the common stock issuable upon the exercise of the Series B Warrants, such holders may exercise their Series B warrants on a “cashless” basis pursuant to a formula set forth in the terms of the Series B Warrants. Each holder of the Warrants will be subject to a requirement that they will not have the right to exercise the Warrants to the extent that, after giving effect to such exercise, such holder (together with its affiliates) would beneficially own in excess of 4.99% (subject to increase to 9.99%) of the shares of our common stock outstanding immediately after giving effect to such exercise. The Warrants are callable in the event that the last sales price of our common stock for any twenty (20) consecutive trading day period on or after the date of issuance (the “Measurement Period”) exceeds $9.00. The Company may, within ten (10) trading days of the end of such Measurement Period, call for the redemption of all or any portion of the outstanding and unexercised Warrants for consideration equal to the Black Scholes Value (as defined therein) of the remaining unexercised portion of the Warrants called for redemption on such date. Pursuant to the Underwriting Agreement, the Company issued to Aegis a warrant (the “Representative’s Warrants”) to purchase 35,000 shares of common stock. The Representative’s Warrants will be exercisable at a per share exercise price equal to $11.25 and is exercisable at any time and from time to time, in whole or in part, during the four-year period commencing twelve months from the effective date of the Registration Statement. The Representative’s Warrants also provide for one demand registration right of the shares underlying the Representative’s Warrants, and unlimited “piggyback” registration rights with respect to the registration of the shares of common stock underlying the Representative’s Warrants and customary anti-dilution provisions. The aggregate fair value of the 35,000 warrants, totaled $363,958 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $11.25, 0.21% risk free rate, 315.6% volatility and expected life of the warrants of 6 years. The value of the warrants has been netted against the proceeds of the offering proceeds and accounted for in additional paid in capital. On August 18, 2021, the Company sold, in a registered direct offering, an aggregate of 1,418,605 shares of common stock and in a concurrent private placement, warrants to purchase up to 1,418,605 shares of common stock, at an aggregate purchase price of $4.30 per Share and associated Warrant. The Warrants will be exercisable six months from the date of issuance at an exercise price of $5.42 per share and will expire five and one-half years following the initial date of issuance. On November 2, 2021, the Company entered into a series of securities purchase agreements with certain institutional accredited investors pursuant to which the Company issued and sold, in a private placement (i) 1,969,091 shares of the Company’s Common Stock (ii) pre-funded warrants exercisable for a total of 2,576,364 shares of Common Stock (the “Prefunded Warrant Shares”) with an exercise price of $0.0001 per Prefunded Warrant Share, and (iii) warrants exercisable for a total of 4,545,455 shares of Common Stock (the “Common Warrant Shares” and together with the Prefunded Warrant Shares, the “Warrant Shares”) with an exercise price of $6.50 per Common Warrant Share. Number of Weighted Weighted Outstanding, December 31, 2019 40,000 $ 7.50 0.52 Warrant A Granted (1) 2,639,848 $ 9.00 9.00 Expired - $ - - Warrant B Granted (2) 659,970 $ 4.50 4.50 Warrant B Exercised (21,150 ) $ 4.50 - Underwriter Warrant 35,000 $ 11.25 11.25 Underwriter Warrant Exercised - - - Outstanding, December 31, 2020 3,353,698 4.61 4.81 Cancelled (40,000 ) $ 7.50 - Underwriter Warrants 8,881,333 $ 3.62 - Warrant A Exercised (742,220 ) $ 9.00 - Warrant B Exercised (313,320 ) $ 4.50 - Underwriter Warrant Exercised (1,176,364 ) $ 0.0001 - Outstanding, December 31, 2021 9,963,127 $ 5.02 4.55 (1) Includes 210,000 Warrant A granted to Underwriters upon exercise of overallotment in connection with the Offering (2) Includes 525,000 Warrant B granted to Underwriters upon exercise of overallotment in connection with the Offering |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2021 | |
Operating Lease [Abstract] | |
OPERATING LEASES | NOTE 9 – OPERATING LEASES On June 24, 2020, eVance, Inc. (“eVance”) entered into a Lease Agreement (the “Lease”) with Pergament Lodi, LLC (the “Lessor”) relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for thirty-nine (39) months commencing September 1, 2020. The monthly base rent is $8,019 for the first twelve (12) months increasing thereafter to $8,768. The total rent for the entire lease term is $315,044 and $8,768 is payable as a security deposit. The first three months of rent will be abated so long as eVance is not in default of any portion of the Lease. On January 11, 2022, DMINT entered into two leases (the “Leases”) in Bradford, Pennsylvania relating to a combined 10,000 square feet of property located at the Bradford Regional Airport Authority multi-tenant building in Lafayette Township. The facility is in the process of being converted into a cryptocurrency mining data center powered on the local power grid in tandem with natural gas power. The location will be used for DMINT’s mining operation with capacity for up to 2,000 Antminer S19j PRO machines. The Leases are each for a term of five years, ending on the later of the date of occupancy and November 10, 2026. The monthly base rent for “Cell 3”, comprising 4,000 square feet, is $1,667 per month. The monthly base rent for “Cell 4”, comprising 6,000 square feet, is $2,500 per month. The total rent for the entire lease term of the Leases is $ 250,00 Balance Sheet Classification December 31, Asset Operating lease asset Right of use asset $ 402,538 Total lease asset $ 402,538 Liability Operating lease liability – current portion Current operating lease liability $ 133,180 Operating lease liability – noncurrent portion Long-term operating lease liability 273,166 Total lease liability $ 406,346 Lease obligations at December 31, 2021 consisted of the following: For the year ended December 31: 2022 $ 150,139 2023 144,393 2024 50,000 2025 50,000 2026 41,667 Total payments $ 436,199 Amount representing interest $ (29,853 ) Lease obligation, net 406,346 Less current portion (133,180 ) Lease obligation – long term $ 273,166 Rent expense for the years ended December 31, 2021 and 2020, was $106,201 and $91,052, respectively. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2021 | |
Common Stock [Abstract] | |
COMMON STOCK | NOTE 10 - COMMON STOCK On August 18, 2021, the Company sold, in a registered direct offering, units comprised of an aggregate of 1,418,605 shares of common stock and in a concurrent private placement, warrants to purchase up to 1,418,605 shares of common stock, at an aggregate purchase price of $4.30 per Share and associated Warrant, for total net proceeds of $6,100,000. On November 2, 2021, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional accredited investors (the “Investors”) pursuant to which the Company issued and sold, in a private placement (the “Private Placement”), (i) 1,969,091 shares (the “Shares”) of common stock, along with warrants to purchase up to 7,121,819 shares of common stock, for total net proceeds of approximately $22,918,000. Refer to Note 12 for common stock issued to related parties. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2021 | |
Preferred Stock [Abstract] | |
PREFERRED STOCK | NOTE 11 – PREFERRED STOCK Our certificate of incorporation authorizes the issuance of 50,000,000 shares of blank check preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. No shares of preferred stock are currently issued or outstanding. Series A Preferred Stock On August 7, 2020, we filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock (the “Certificate of Designations”) with the Secretary of State of Delaware. The Certificate of Designations will provide that the Company may issue up to 10,000 shares of Series A Preferred Stock at a stated value (the “Stated Value”) of $1,000 per share. Holders of Series A Preferred Stock are entitled to the following rights and preferences. Dividends The Series A Preferred Stockholders are entitled to receive cash dividends at a rate per share (as a percentage of the Stated Value per share) of 12% per annum. Dividends accrue quarterly. Dividends are to be paid to the holders from funds legally available for payment and as approved for payment by the Board of Directors of the Company. Conversion The Series A Preferred Stock holders may convert, at their option, on or after the date on which the Term Loan is repaid in full, each share of Series A Preferred Stock (along with accrued but unpaid dividends thereon) into such number of shares of common stock as determined by dividing the Stated Value by the conversion price. The conversion price for the Series A Preferred Stock will be equal to the offering price per Unit in this offering and will be subject to adjustment for splits and the like. The holders of Series A Preferred Stock will only be permitted to convert their shares of Series A Preferred Stock into shares of common stock at such time as the Term Loan has been repaid in full and there is no further outstanding obligations regarding such indebtedness. Voting Each holder of a share of Series A Preferred Stock will have the right to vote its shares of Series A Preferred Stock with the common stock on an as-converted basis, and with respect to such votes, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of common stock, and shall be entitled, to notice of any stockholders’ meeting in accordance with the Company’s bylaws, and shall be entitled to vote, together with holders of common stock, with respect to any question upon which holders of common stock have the right to vote. Fractional votes shall not be permitted, and such shares shall be rounded up. Liquidation Preference Each share of Series A Preferred Stock will have a liquidation preference equal to the Stated Value plus any accrued but unpaid dividends thereon. In the event of a liquidation, dissolution or winding up of the Company (which include,s any merger, reorganization, sale of assets in which control of the Company is transferred or event which results in all or substantially all of the Company’s assets being transferred), the holders of Series A Preferred Stock shall be entitled to receive out of the assets of the Company, before any payment is made to the holders of the Company’s common stock and either in preference to or pari pasu |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 – RELATED PARTY TRANSACTIONS On May 13, 2020, Mr. Herzog agreed to convert, concurrently with the public offering of the Company’s securities, $3,522,191 in principal amount of indebtedness (plus any additional accrued interest and other fees thereon that accrues prior to the offering) into shares of convertible Series A Preferred Stock to be designated concurrently with the offering. On July 24, 2020, the terms of such conversion were amended such that Mr. Herzog agreed to convert such an aggregate of $3,582,355 of indebtedness and accrued interest into Series A Preferred Stock and warrants to purchase common stock at an exercise price determined by the public offering (“Conversion Warrants”), which Series A Preferred Stock and conversion warrants would be issued concurrently with the closing of the public offering. The Company has determined Mr. Herzog’s debt is being extinguished in order to protect his equity investment in the Company. Mr. Herzog is considered a principal owner with 10.3% of voting interests of the Company prior a conversion. The Company believes the equity investment in the Company is significant and indicates that Mr. Herzog entered into the exchange to protect his equity investment. In accordance with ASC 470-50-40-2, an extinguishment transaction between related entities may be capital transactions. If the extinguishment accounting is applied, any gain or loss that results should be reflected in equity. As a result, we believe the extinguishment did not and will not have any impact to the Company’s future financial statements. On May 13, 2020, Mr. Yakov agreed to convert, concurrently with the public offering of the Company’s securities, $1,011,016 in principal amount of indebtedness and accrued interest, which includes deferred salary and unreimbursed expenses, most of which was outstanding for more than one year, (plus any additional accrued interest and other fees thereon that accrues prior to the offering), into shares of convertible Series A Preferred Stock to be designated concurrently with the offering. On July 24, 2020, the terms of such conversion were amended such that Mr. Yakov agreed to convert an aggregate of $1,017,573 of accrued salary, indebtedness and accrued interest into Series A Preferred Stock and Conversion Warrants, which Series A Preferred Stock and conversion warrants were issued concurrently with the closing of the offering. In accordance with ASC 470-50-40-2, an extinguishment transaction between related entities may be a capital transaction. As the extinguishment accounting is applied, any gain or loss that results will be reflected in equity. On July 24, 2020, the terms of the agreement whereby Mr. Herzog agreed to convert, concurrently with the public offering of the Company’s securities, $3,522,191 in principal amount of indebtedness (plus any additional accrued interest and other fees thereon that accrues prior to the offering) into shares of convertible Series A Preferred were amended such that Mr. Herzog agreed to convert such an aggregate of $3,582,355 of indebtedness and accrued interest into Series A Preferred Stock and Conversion Warrants, which Series A Preferred Stock and Conversion Warrants would be issued concurrently with the closing of the public offering. On August 11, 2020, Mr. Herzog converted $3,612,940 of indebtedness into 3,612 shares of Series A Preferred Stock (the terms of which are described below) and 802,875 Series A Conversion Warrants with an exercise price of $9.00 and 200,719 Series B Conversion Warrants with an exercise price of $4.50. On July 24, 2020, the terms of the agreement whereby Mr. Yakov agreed to convert, concurrently with the public offering of the Company’s securities, $1,017,753 in principal amount of indebtedness and accrued interest, which includes deferred salary and unreimbursed expenses (plus any additional accrued interest and other fees thereon that accrues prior to the offering), into shares of convertible Series A Preferred Stock to be designated concurrently with the offering such conversion were amended such that Mr. Yakov agreed to convert an aggregate of $1,017,573 of accrued salary, indebtedness and accrued interest into Series A Preferred Stock and conversion warrants, which Series A Preferred Stock and conversion warrants would be issued concurrently with the closing of the offering. On August 11, 2020, Mr. Yakov converted $1,021,512 of indebtedness into 1,021 shares of Series A Preferred Stock (the terms of which are described in Note 10 below) and 227,003 Series A Conversion Warrants with an exercise price of $9.00 and 56,751 Series B Conversion Warrants with an exercise price of $4.50. On November 19, 2021, the company granted 10,800 shares of common stock to Alina Dulimof, Director, for services. The shares were valued at $4.63, the closing stock price on the date of grant, for total non-cash stock compensation expense of $50,004. On November 19, 2021, the company granted 10,800 shares of common stock to Amir Sternhell, Director, for services. The shares were valued at $4.63, the closing stock price on the date of grant, for total non-cash stock compensation expense of $50,004. On November 19, 2021, the company granted 14,039 shares of common stock to Ehud Ernst, Director, for services. The shares were valued at $4.63, the closing stock price on the date of grant, for total non-cash stock compensation expense of $65,001. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements. On October 20, 2017, the Company entered into a 7-year term employment agreement with its founder and President, effective January 1, 2018 through December 31, 2024. The agreement provides for an annual salary of $375,000, fringe benefits ($2,500 monthly automobile allowance, any benefit plans of the Company and 4 weeks paid vacation), an incentive bonus of $200,000 based on the achievement of certain performance criteria and an acquisition bonus equal to two (2%) percent of the gross purchase price paid in connection therewith upon the closing of any acquisition directly or indirectly by the Company or its subsidiaries during the Employment Period of any company or business (including purchases of all or substantially all of the assets of any such entity) having then existing sales of not less than three million five hundred thousand dollars ($3,500,000). During the year ended December 31, 2020, Mr. Yakov was paid a $400,000 bonus ($200,000 per year for 2019 and 2020). See Note 16 - Subsequent Events for additional information on changes in 2022. The Company had an adverse litigation judgment against it during the fiscal year which included damages and attorney fees in favor of the Plaintiff. The Company has appealed the judgment of both the award of damages and attorney fees. The timeline for a ruling on the appeal is unknown. The Company believes that it has sufficient grounds to prevail on its appeal. As the amount of the judgement is known the Company has accounted for it as an accrued expense. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 14 — INCOME TAX Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Net deferred tax assets consist of the following components as of December 31: 2021 2020 Deferred Tax Assets: NOL Carryover $ 2,431,700 $ 1,790,700 Allowance for Doubtful Accounts 10,300 10,300 Depreciation and amortization 687,605 467,658 Less valuation allowance (3,129,605 ) (2,268,658 ) Net deferred tax assets $ — $ — The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pre-tax income from continuing operations for the period ended December 31, due to the following: 2021 2020 Book loss $ (1,045,000 ) $ (373,000 ) State taxes (299,000 ) (107,000 ) Meals and entertainment 1,800 800 Stock based compensation 124,500 135,600 Non deductible expenses 156,421 — Other adjustments 200,332 (368,891 ) Valuation allowance 860,947 712,491 $ — $ — At December 31, 2021, the Company had operating loss carry forwards of approximately $9,006,000, $3,417,000 of which expire from 2021 – 2040, and no expiration on the remaining amount. In accordance with Section 382 of the Internal Revenue code, the usage of the Company’s net operating loss carryforwards may be limited in the event of a change in ownership. A full Section 382 analysis has not been prepared and NOLs could be subject to limitation under Section 382. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENTS | NOTE 15 - SEGMENTS The Company applies ASC 280, Segment Reporting The following tables details revenue, operating expenses, and assets for the Company’s reportable segments for the year ended December 31, 2021. For the Year ended Reportable segment revenue: Revenue, net - cryptocurrency mining $ 304,004 Fintech services revenue 16,406,755 Total segment and consolidated revenue 16,710,759 Reconciling Items: Processing and servicing costs, excluding merchant portfolio amortization (13,480,212 ) Amortization and depreciation expense (1,255,674 ) Depreciation expense - cryptocurrency mining (635,225 ) Salaries and wages (2,126,451 ) Professional fees (1,590,520 ) General and administrative expenses (2,387,416 ) Interest expense (116,737 ) Gain on forgiveness of debt 236,231 Litigation expense (333,158 ) Other income 45 Net Loss $ (4,978,358 ) December 31, Total Assets: Cryptocurrency mining $ 9,749,652 Fintech services 33,779,839 $ 43,529,491 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company would purchase 100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI Issued Shares”). The value of the CI Issued Shares was, for purposes of the Agreement, based on the closing trading price of the Company on October 1, 2021 (the date on which a third-party fairness opinion was issued), resulting in an aggregate purchase price for Crowd Ignition of $5.3 million. On January 11, 2022, the Company entered into a new employment agreement with Mr. Yakov (the “Yakov Agreement”) and a new employment agreement with Mr. Smith (the “Smith Agreement”). The Yakov Agreement maintains Mr. Yakov’s role as the Company’s Chief Executive Officer through December 31, 2027 and extended for one-year terms thereafter. The Smith Agreement maintains Mr. Smith’s role as the Company’s Vice President, Finance unless terminated or upon his resignation. The Yakov Agreement increases Mr. Yakov’s base salary to $750,000 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Yakov also received a $490,000 bonus for acquisitions closed by the Company in 2020 and 2021 and he will be eligible to receive an acquisition bonus equal to two percent (2%) of the gross purchase price paid in connection with a future acquisition. Mr. Yakov shall be eligible to receive an annual bonus of Three Hundred Thousand Dollars ($300,000) based on performance criteria established by the Board. In addition, on an annual basis, Mr. Yakov shall receive options to purchase up to 200,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Yakov Agreement also states that, if Mr. Yakov’s employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base salary for the remainder of the term along with all earned bonuses. In the event the termination is in connection with Mr. Yakov’s death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and all bonuses earned through the termination date. The Smith Agreement increases Mr. Smith’s base salary to $350,000.00 and he will continue to be eligible for insurance coverages and benefits available to the Company’s employees pursuant to the terms of such plans. Mr. Smith shall be eligible to receive an annual bonus of One Hundred Fifty Thousand Dollars ($150,000) based on performance criteria established by the Committee. In addition, Mr. Smith shall receive options (the “Options”) to purchase up to 275,000 shares of common stock of the Company at an exercise price of $0.001 per share. The Options vest equally over five years at the rate of one-fifth (1/5 th The Smith Agreement also states that, if Mr. Smith’s employment is terminated without cause or he voluntarily terminates his employment for good reason, he will continue to receive his base salary for the remainder of the term along with all earned bonuses. In the event the termination is in connection with Mr. Smith’s death, disability or bankruptcy of the Company, he will receive the pro rata amount of his base salary through the termination date and all bonuses earned through the termination date. In January 2022, Armistice Capital, received 1,400,000 shares of common stock upon the exercise of 1,400,000 warrants at $0.0001. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP 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. The Company’s accounting estimates include the collectability of receivables, useful lives of long-lived assets and recoverability of those assets, impairment in fair value of goodwill, valuation allowances for income taxes, stock-based compensation. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, eVance, Securus, CrowdPay, Omnisoft, OLBit and DMINT. All significant intercompany transactions and balances have been eliminated. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the financial statements for year ended December 31, 2021. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”). As of December 31, 2021, the Company had $3,220,339 of cash in excess of the FDIC’s $250,000 coverage limit. |
Operating Segments | Operating Segments Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the chief executive officer and Vice President. The Company has two operating segments as of December 31, 2021. See Note 15, “Segment Information”. |
Stock-based compensation | Stock-based compensation We account for equity-based transactions with employees and non-employees under the provisions of FASB ASC Topic 718, “Compensation – Stock Compensation” (Topic 718) |
Net Loss per Share | Net Loss per Share Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive potentially outstanding shares of common stock during the period. The weighted average number of common shares for the year ended December 31, 2021 and 2020 does not include warrants to acquire 9,963,127 and 3,353,698 shares of common stock, respectively, because of their anti-dilutive effect. The weighted average number of common shares for the year ended December 31, 2021 and 2020 does not include 772,362 and 172,438 options, respectively, to purchase common stock because of their anti-dilutive effect. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are amortized over the lesser of the remaining term of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company periodically reviews the carrying value of its long-lived assets held and used at least annually or when events and circumstances warrant such a review. If significant events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company determines whether impairment has occurred for the group of assets for which it can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, it measures any impairment by comparing the fair value of the asset group to its carrying value. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded. |
Merchant Portfolios | Merchant Portfolios Merchant portfolios are valued at fair value of merchant customers on the date of acquisition and are amortized over their estimated useful lives (7 years). |
Goodwill | Goodwill The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment |
Accounts Receivable | Accounts Receivable Accounts receivable represent contractual residual payments due from the Company’s processing partners or other customers. Residual payments are determined based on transaction fees and revenues from the credit and debit card processing activity of merchants for which the Company’s processing partners pay the Company. Based on collection experience and periodic reviews of outstanding receivables, management considers all accounts receivable for our residual payments to be fully collectible and accordingly, no allowance for doubtful accounts is required; however, CrowdPay has a recorded an allowance of approximately $0 and $38,000 as of December 31, 2021 and 2020, respectively. |
Reserve for Chargeback Losses | Reserve for Chargeback Losses Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly. |
Revenue Recognition and Cost of Revenues | Revenue Recognition and Cost of Revenues The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. In the case of “wholesale” residual revenue in which the Company has a direct contractual relationship with the merchant, bears risk of chargebacks and performs underwriting on the merchants, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees as expenses. In cases of residual revenue where the Company is not responsible for merchant underwriting and has no chargeback liability and has no or limited contractual relationship with the merchant, the Company records the amount it receives from the processor net of interchange and other processing fees as revenue. |
Disaggregation of Revenue | Disaggregation of Revenue The following table presents the Company’s revenue disaggregated by revenue source: For the Years 2021 2020 Revenue from contracts with customers: Wholesale contracts $ 13,336,832 $ 5,106,588 Retail contracts $ 1,680,680 $ 2,242,164 Other transaction and processing fees $ 1,693,247 $ 2,417,869 Total transactions and processing fees $ 16,710,759 $ 9,766,621 The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps: ● Identification of a contract with a customer; ● Identification of the performance obligations in the contract; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when or as the performance obligations are satisfied. Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Shipping and handling activities associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment activity and recognized as revenue at the point in time at which control of the goods transfers to the customer. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. |
Transaction and processing fees | Transaction and processing fees Fees for the Company’s transaction and processing arrangements are typically billed and paid on a monthly basis. The Company receives a percentage of recurring monthly transaction related fees comprised of credit and debit card fees charged to merchants, net of association fees, otherwise known as Interchange, as well as certain service charges and convenience fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. Fees are calculated on either a percentage of the dollar, volume of the transaction or a fixed fee or a hybrid of the two and are recognized at the time of the transaction. These merchant services represent a single performance obligation satisfied over time and that the same measure of progress should be used to measure the Company’s progress toward complete satisfaction of the performance obligation. The Company will recognize revenue on a monthly basis as the services are transferred to the customer in short daily increments that qualify for series guidance as the best measure of the transfer of control. In wholesale contracts, the Company recognizes transaction and processing fees on a gross basis as the Company is the principal in the merchant services. The Company has concluded it is the principal because it has a direct contractual relationship with the merchant, is primarily responsible for the delivery of services to the merchants, including performing underwriting, has discretion in setting prices, and bears risk of chargebacks and other merchant losses. The Company also has the unilateral ability to accept or reject a transaction based on criteria established by the Company. As the principal, the Company records the full discount charged to the merchant as revenue and the related interchange and other processing fees within cost of revenues. In retail contracts, the Company is not responsible for merchant underwriting, has no chargeback liability and has no or limited contractual relationship with the merchant. As such, the Company records the net amount it receives from the processor, after interchange and other interchange and other processing fees, as revenue. |
Merchant equipment sales and other | Merchant equipment sales and other The Company generates revenue through the sale and rental of merchant equipment. The Company satisfies its performance obligation upon delivery of equipment to merchants and recognizes revenue at a point in time. The Company allows for customer returns which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices customers upon delivery of the equipment to merchants, and payments from such customers are due upon invoicing. The Company offers hardware installment sales to customers with terms ranging from three to forty-eight months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue separate from hardware revenue, within subscription and services-based revenue, over the terms of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for hardware installment sales that have a term of one year or less. |
Cryptocurrency mining | Cryptocurrency mining The Company has entered into digital asset mining pools by executing contracts, as amended from time to time, with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining pool operator which are immaterial and are recorded as a deduction from revenue), for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm. Providing computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Each individual unit of cryptocurrency held by the Company is a separate unit of account. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the Financial Accounting Standards Board (“FASB”), the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of disaggregated by revenue | For the Years 2021 2020 Revenue from contracts with customers: Wholesale contracts $ 13,336,832 $ 5,106,588 Retail contracts $ 1,680,680 $ 2,242,164 Other transaction and processing fees $ 1,693,247 $ 2,417,869 Total transactions and processing fees $ 16,710,759 $ 9,766,621 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | December 31, December 31, Merchant Portfolios $ 2,405,000 $ 2,340,000 Less accumulated amortization (1,562,798 ) (1,199,184 ) Net residual portfolios $ 842,202 $ 1,140,816 December 31, December 31, Trade name $ 2,500,000 $ 2,500,000 Less accumulated amortization (1,500,000 ) (1,000,000 ) Net trade name $ 1,000,000 $ 1,500,000 December 31, December 31, CBD Merchant Portfolio $ 18,000,000 $ — Less accumulated amortization (190,476 ) — Net trade name $ 17,809,524 $ — December 31, December 31, Exclusive agreement to purchase natural gas $ 4,499,952 $ — Less accumulated amortization (187,498 ) — Net mineral rights $ 4,312,454 $ — Total intangible assets, net $ 23,964,180 $ 2,640,816 |
Schedule of estimated amortization expense related to amortizing intangible assets | 2022 $ 3,858,090 2023 3,834,281 2024 3,320,234 2025 3,021,424 2026 3,021,424 Thereafter 6,908,727 Total $ 23,964,180 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of assets stated at cost, less accumulated depreciation | December 31, December 31, Furniture and Fixtures $ 36,471 $ 36,471 Office Equipment 474,873 288,273 Computer Software 182,345 182,345 Leasehold Improvements 17,877 17,877 Cryptocurrency Mining Equipment 9,410,000 — Total 10,121,566 — Less accumulated depreciation (1,154,470 ) (505,159 ) Property and Equipment, net $ 8,967,096 $ 19,807 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of outstanding stock options and changes | Stock Options Options Weighted Average Aggregate Options outstanding at January 1, 2020 278,506 $ 0.0001 - Granted 6,667 $ 0.001 - Exercised - $ - - Forfeited - $ - - Options outstanding December 31, 2020 285,173 $ 0.0001 $ 1,408,755 Granted 774,585 0.0001 - Exercised (159,103 ) $ - - Expired (6,667 ) $ - - Options outstanding December 31, 2021 893,988 $ 0.0001 $ 2,369,065 Shares exercisable at December 31, 2021 772,361 $ 0.0001 $ 2,046,759 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Warrant [Abstract] | |
Schedule of outstanding stock warrants | Number of Weighted Weighted Outstanding, December 31, 2019 40,000 $ 7.50 0.52 Warrant A Granted (1) 2,639,848 $ 9.00 9.00 Expired - $ - - Warrant B Granted (2) 659,970 $ 4.50 4.50 Warrant B Exercised (21,150 ) $ 4.50 - Underwriter Warrant 35,000 $ 11.25 11.25 Underwriter Warrant Exercised - - - Outstanding, December 31, 2020 3,353,698 4.61 4.81 Cancelled (40,000 ) $ 7.50 - Underwriter Warrants 8,881,333 $ 3.62 - Warrant A Exercised (742,220 ) $ 9.00 - Warrant B Exercised (313,320 ) $ 4.50 - Underwriter Warrant Exercised (1,176,364 ) $ 0.0001 - Outstanding, December 31, 2021 9,963,127 $ 5.02 4.55 (1) Includes 210,000 Warrant A granted to Underwriters upon exercise of overallotment in connection with the Offering (2) Includes 525,000 Warrant B granted to Underwriters upon exercise of overallotment in connection with the Offering |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Operating Lease [Abstract] | |
Schedule of balance sheet classification | Balance Sheet Classification December 31, Asset Operating lease asset Right of use asset $ 402,538 Total lease asset $ 402,538 Liability Operating lease liability – current portion Current operating lease liability $ 133,180 Operating lease liability – noncurrent portion Long-term operating lease liability 273,166 Total lease liability $ 406,346 |
Schedule of lease obligations | For the year ended December 31: 2022 $ 150,139 2023 144,393 2024 50,000 2025 50,000 2026 41,667 Total payments $ 436,199 Amount representing interest $ (29,853 ) Lease obligation, net 406,346 Less current portion (133,180 ) Lease obligation – long term $ 273,166 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of net deferred tax assets | 2021 2020 Deferred Tax Assets: NOL Carryover $ 2,431,700 $ 1,790,700 Allowance for Doubtful Accounts 10,300 10,300 Depreciation and amortization 687,605 467,658 Less valuation allowance (3,129,605 ) (2,268,658 ) Net deferred tax assets $ — $ — |
Schedule of income tax provision | 2021 2020 Book loss $ (1,045,000 ) $ (373,000 ) State taxes (299,000 ) (107,000 ) Meals and entertainment 1,800 800 Stock based compensation 124,500 135,600 Non deductible expenses 156,421 — Other adjustments 200,332 (368,891 ) Valuation allowance 860,947 712,491 $ — $ — |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of total assets | For the Year ended Reportable segment revenue: Revenue, net - cryptocurrency mining $ 304,004 Fintech services revenue 16,406,755 Total segment and consolidated revenue 16,710,759 Reconciling Items: Processing and servicing costs, excluding merchant portfolio amortization (13,480,212 ) Amortization and depreciation expense (1,255,674 ) Depreciation expense - cryptocurrency mining (635,225 ) Salaries and wages (2,126,451 ) Professional fees (1,590,520 ) General and administrative expenses (2,387,416 ) Interest expense (116,737 ) Gain on forgiveness of debt 236,231 Litigation expense (333,158 ) Other income 45 Net Loss $ (4,978,358 ) |
Schedule of total assets | December 31, Total Assets: Cryptocurrency mining $ 9,749,652 Fintech services 33,779,839 $ 43,529,491 |
Background (Details)
Background (Details) - USD ($) | 1 Months Ended | |
Jul. 28, 2021 | Dec. 31, 2021 | |
Background (Details) [Line Items] | ||
Purchase of shares (in Shares) | 767,918 | |
Cai Energy Blockchain, Inc.[Member] | ||
Background (Details) [Line Items] | ||
Common stock par value (in Dollars per share) | $ 0.0001 | |
Fair market value | $ 4,500,000 | |
Exercise price per share (in Dollars per share) | $ 0.0001 | |
Minimum [Member] | ||
Background (Details) [Line Items] | ||
Capital raise | $ 1,000,000 | |
Maximum [Member] | ||
Background (Details) [Line Items] | ||
Capital raise | $ 50,000,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Cash amount | $ 3,220,339 | |
FDIC’s coverage limit | $ 250,000 | |
Weighted average number of common shares anti-dilutive effect | 9,963,127 | 3,353,698 |
Weighted average number of common shares anti-dilutive effect | 772,362 | 172,438 |
Merchant portfolios estimated useful lives | 7 years | |
Allowance for doubtful accounts receivable | $ 0 | $ 38,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of disaggregated by revenue - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from contracts with customers: | ||
Wholesale contracts | $ 13,336,832 | $ 5,106,588 |
Retail contracts | 1,680,680 | 2,242,164 |
Other transaction and processing fees | 1,693,247 | 2,417,869 |
Total transactions and processing fees | $ 16,710,759 | $ 9,766,621 |
Liquidity and Capital Resourc_2
Liquidity and Capital Resources (Details) | Dec. 31, 2021USD ($) |
Liquidity And Capital Resources [Abstract] | |
Cash | $ 3,500,000 |
Working capital deficit | $ 1,800,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets (Details) [Line Items] | ||
Amortization expense (in Dollars) | $ 1,241,589 | $ 844,423 |
Purchase natural gas is being amortized over the useful life | 10 years | |
Weighted average useful life of amortizing intangible assets | 6 years 2 months 12 days | |
Maximum [Member] | ||
Intangible Assets (Details) [Line Items] | ||
Portfolios and tradename are being amortized over respective useful lives | 7 years | |
Minimum [Member] | ||
Intangible Assets (Details) [Line Items] | ||
Portfolios and tradename are being amortized over respective useful lives | 5 years |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of intangible assets [Abstract] | ||
Merchant Portfolios | $ 2,405,000 | $ 2,340,000 |
Less Accumulated Amortization | (1,562,798) | (1,199,184) |
Net residual portfolios | 842,202 | 1,140,816 |
Trade name | 2,500,000 | 2,500,000 |
Less accumulated amortization | (1,500,000) | (1,000,000) |
Net trade name | 1,000,000 | 1,500,000 |
CBD Merchant Portfolio | 18,000,000 | |
Less accumulated amortization | (190,476) | |
Net trade name | 17,809,524 | |
Exclusive agreement to purchase natural gas | 4,499,952 | |
Less accumulated amortization | (187,498) | |
Net mineral rights | 4,312,454 | |
Total intangible assets, net | $ 23,964,180 | $ 2,640,816 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of estimated amortization expense related to amortizing intangible assets | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of estimated amortization expense related to amortizing intangible assets [Abstract] | |
2022 | $ 3,858,090 |
2023 | 3,834,281 |
2024 | 3,320,234 |
2025 | 3,021,424 |
2026 | 3,021,424 |
Thereafter | 6,908,727 |
Total | $ 23,964,180 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 649,310 | $ 16,846 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of assets stated at cost, less accumulated depreciation - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 10,121,566 | |
Less accumulated depreciation | (1,154,470) | (505,159) |
Property and Equipment, net | 8,967,096 | 19,807 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 36,471 | 36,471 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 474,873 | 288,273 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 182,345 | 182,345 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 17,877 | 17,877 |
Cryptocurrency Mining Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 9,410,000 |
Note Payable (Details)
Note Payable (Details) - USD ($) $ in Millions | Mar. 02, 2021 | May 06, 2020 | Apr. 08, 2018 | Nov. 24, 2021 |
Note Payable (Details) [Line Items] | ||||
Credit agreement, description | the Company transferred cash in the amount of $7,712,256.28 to the Agent under the Credit Agreement (the “Prepayment”). The Prepayment facilitated the discharge in full of all of the obligations under the Credit Agreement. In connection with the extinguishment of the obligations under the Credit Agreement, 40,000 warrants to purchase Common Stock were cancelled. | |||
Paycheck protection program, description | the Company received a Paycheck Protection Program loan under the CARES Act for $236,231 (the “PPP Loan”). The PPP Loan matures on May 7, 2022 and bears interest at 1% per annum. Monthly amortized principal and interest payments are deferred for 6 months after the date of the agreement. The Paycheck Protection Program provides that the use of PPP Loan proceeds were limited to certain qualifying expenses and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act. The Company received notice on October 11, 2021 that the $236,000 PPP Loan had been entirely forgiven resulting in the recognition of a gain on extinguishing of debt. | |||
Purchase price | $ 20 | |||
At Closing [Member] | ||||
Note Payable (Details) [Line Items] | ||||
Purchase price | 16 | |||
Within Six Months After Closing [Member] | ||||
Note Payable (Details) [Line Items] | ||||
Purchase price | 2 | |||
Escrow Account [Member] | ||||
Note Payable (Details) [Line Items] | ||||
Purchase price | $ 2 | |||
GACP [Member] | ||||
Note Payable (Details) [Line Items] | ||||
Term loan, description | eVance, Omnisoft, and CrowdPay, (collectively, the “Borrowers”), entered into a term loan of $12,500,000 with GACP (the “Term Loan”) which obligations are guaranteed by the Company (collectively with the Borrowers, the “Loan Parties”), under the Loan and Security Agreement (the “Credit Agreement”). |
Stock Options (Details)
Stock Options (Details) - USD ($) | Jul. 28, 2021 | Jan. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Stock Options (Details) [Line Items] | |||||
Options granted | 774,585 | 6,667 | |||
Aggregate fair value of options | $ 4,499,952 | ||||
Exercise price | $ 0.0001 | ||||
Risk free rate | 1.26% | ||||
Volatility rate | 143.30% | ||||
Expected life | 10 years | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Fair market value | $ 2,369,065 | $ 1,408,755 | |||
Exercise price per share | $ 0.0001 | ||||
Mr. Yakov [Member] | |||||
Stock Options (Details) [Line Items] | |||||
Options granted | 6,667 | ||||
Grant vest rate, description | The grant shall vest at the rate of 1/3 beginning on each anniversary of the effective date of grant. The options have an exercise price of $0.001 per share and expire in three years after each vest date. | ||||
Vesting period | 3 years | ||||
Aggregate fair value of options | $ 32,793 | ||||
Exercise price | $ 0.001 | ||||
Risk free rate | 0.16% | ||||
Volatility rate | 35.03% | ||||
Expected life | 3 years | ||||
Cai Energy Blockchain, Inc.[Member] | |||||
Stock Options (Details) [Line Items] | |||||
Options granted | 767,918 | ||||
Common stock, par value | $ 0.0001 | ||||
Fair market value | $ 4,500,000 |
Stock Options (Details) - Sched
Stock Options (Details) - Schedule of outstanding stock options and changes - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of outstanding stock options and changes [Abstract] | ||
Options outstanding, beginning balance | 285,173 | 278,506 |
Weighted Average Exercise Price, Options outstanding, beginning balance | $ 0.0001 | $ 0.0001 |
Aggregate Intrinsic Value, Options outstanding, beginning balance | $ 1,408,755 | |
Options outstanding, Granted | 774,585 | 6,667 |
Weighted Average Exercise Price, Granted | $ 0.0001 | $ 0.001 |
Aggregate Intrinsic Value, Granted | ||
Options outstanding, Expired | (6,667) | |
Weighted Average Exercise Price, Expired | ||
Aggregate Intrinsic Value, Expired | ||
Options outstanding, Shares exercisable | 772,361 | |
Weighted Average Exercise Price, Shares exercisable | $ 0.0001 | |
Aggregate Intrinsic Value, Shares exercisable | $ 2,046,759 | |
Options outstanding, Exercised | (159,103) | |
Weighted Average Exercise Price, Exercised | ||
Aggregate Intrinsic Value, Exercised | ||
Options outstanding, Forfeited | ||
Weighted Average Exercise Price, Forfeited | ||
Aggregate Intrinsic Value, Forfeited | ||
Options outstanding, ending balance | 893,988 | 285,173 |
Weighted Average Exercise Price, Options outstanding, ending balance | $ 0.0001 | $ 0.0001 |
Aggregate Intrinsic Value, Options outstanding, ending balance | $ 2,369,065 | $ 1,408,755 |
Warrants (Details)
Warrants (Details) - USD ($) | Nov. 02, 2021 | Aug. 06, 2020 | Aug. 18, 2021 | Dec. 31, 2021 |
Warrants (Details) [Line Items] | ||||
Aggregate of shares | 700,000 | |||
Common stock exercise price (in Dollars per share) | $ 4.5 | |||
Additional of common stock, shares | 105,000 | |||
Offering expenses (in Dollars) | $ 4,900,000 | |||
Net proceeds (in Dollars) | $ 1,120,155 | |||
Exercise price (in Dollars per share) | $ 11.25 | |||
Warrants, description | Each holder of the Warrants will be subject to a requirement that they will not have the right to exercise the Warrants to the extent that, after giving effect to such exercise, such holder (together with its affiliates) would beneficially own in excess of 4.99% (subject to increase to 9.99%) of the shares of our common stock outstanding immediately after giving effect to such exercise. | |||
Warrants exercise price (in Dollars per share) | $ 9 | |||
Risk free rate, percentage | 0.21% | |||
Volatility, percentage | 315.60% | |||
Expected life | 6 years | |||
Aggregate of common shares | 1,418,605 | |||
Number of warrants purchased | 1,418,605 | |||
Purchase price per share (in Dollars per share) | $ 4.3 | |||
Exercise price description | The Warrants will be exercisable six months from the date of issuance at an exercise price of $5.42 per share and will expire five and one-half years following the initial date of issuance. | |||
Securities Purchase Agreements [Member] | ||||
Warrants (Details) [Line Items] | ||||
Shares of common stock | 1,969,091 | |||
Prefunded Warrant Shares [Member] | ||||
Warrants (Details) [Line Items] | ||||
Exercise price (in Dollars per share) | $ 0.0001 | |||
Shares of common stock | 2,576,364 | |||
Common Warrant Shares [Member] | ||||
Warrants (Details) [Line Items] | ||||
Exercise price (in Dollars per share) | $ 6.5 | |||
Shares of common stock | 4,545,455 | |||
Series A Warrant [Member] | ||||
Warrants (Details) [Line Items] | ||||
Exercise price (in Dollars per share) | $ 9 | |||
Common stock per share price (in Dollars per share) | $ 9 | |||
Class A Warrants [Member] | ||||
Warrants (Details) [Line Items] | ||||
Warrants to purchase of granted to underwriters | 210,000 | 210,000 | ||
Class B Warrants [Member] | ||||
Warrants (Details) [Line Items] | ||||
Warrants to purchase of granted to underwriters | 52,500 | |||
Series B Warrant [Member] | ||||
Warrants (Details) [Line Items] | ||||
Warrants to purchase of granted to underwriters | 525,000 | |||
Exercise price (in Dollars per share) | $ 4.5 | |||
Warrants [Member] | ||||
Warrants (Details) [Line Items] | ||||
Exercise price (in Dollars per share) | $ 11.25 | |||
Purchase of common stock, shares | 35,000 | |||
Aggregate fair value, shares | 35,000 | |||
Total aggregate fair value (in Dollars) | $ 363,958 |
Warrants (Details) - Schedule o
Warrants (Details) - Schedule of outstanding stock warrants - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Schedule of outstanding stock warrants [Abstract] | |||
Number of Warrants, outstanding beginning balance | 3,353,698 | 40,000 | |
Weighted Average Exercise Price, outstanding beginning balance | $ 4.61 | $ 7.5 | |
Weighted Average Remaining Contract Term, outstanding beginning balance | 6 months 7 days | ||
Number of Warrants, Cancelled | (40,000) | ||
Weighted Average Exercise Price, Cancelled | $ 7.5 | ||
Weighted Average Remaining Contract Term, Cancelled | |||
Number of Warrants, Warrant A Exercised | (742,220) | ||
Weighted Average Exercise Price, Warrant A Exercised | $ 9 | ||
Weighted Average Remaining Contract Term, Warrant A Exercised | |||
Number of Warrants, Warrant A Granted | [1] | 2,639,848 | |
Weighted Average Exercise Price, Warrant A Granted | [1] | $ 9 | |
Weighted Average Remaining Contract Term, Warrant A Granted | [1] | 9 years | |
Number of Warrants, Expired | |||
Weighted Average Exercise Price, Expired | |||
Weighted Average Remaining Contract Term, Expired | |||
Number of Warrants, Warrant B Granted | [2] | 659,970 | |
Weighted Average Exercise Price, Warrant B Granted | [2] | $ 4.5 | |
Weighted Average Remaining Contract Term, Warrant B Granted | [2] | 4 years 6 months | |
Number of Warrants, Warrant B Exercised | (313,320) | (21,150) | |
Weighted Average Exercise Price, Warrant B Exercised | $ 4.5 | $ 4.5 | |
Weighted Average Remaining Contract Term, Warrant B Exercised | |||
Number of Warrants, Underwriter Warrant | 8,881,333 | 35,000 | |
Weighted Average Exercise Price, Underwriter Warrant | $ 3.62 | $ 11.25 | |
Weighted Average Remaining Contract Term, Underwriter Warrant | 11 years 3 months | ||
Number of Warrants, Underwriter Warrant Exercised | (1,176,364) | ||
Weighted Average Exercise Price, Underwriter Warrant Exercised | $ 0.0001 | ||
Weighted Average Remaining Contract Term, Underwriter Warrant Exercised | |||
Number of Warrants, outstanding ending balance | 9,963,127 | 3,353,698 | |
Weighted Average Exercise Price, outstanding ending balance | $ 5.02 | $ 4.61 | |
Weighted Average Remaining Contract Term, outstanding ending balance | 4 years 6 months 18 days | 4 years 9 months 21 days | |
[1] | Includes 210,000 Warrant A granted to Underwriters upon exercise of overallotment in connection with the Offering | ||
[2] | Includes 525,000 Warrant B granted to Underwriters upon exercise of overallotment in connection with the Offering |
Operating Leases (Details)
Operating Leases (Details) | Jan. 11, 2022USD ($)ft²m² | Jun. 24, 2020 | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Operating Lease (Textual) | ||||
Lease agreement, description | eVance, Inc. (“eVance”) entered into a Lease Agreement (the “Lease”) with Pergament Lodi, LLC (the “Lessor”) relating to approximately 4,277 square feet of property located at 960 Northpoint Parkway, Alpharetta, Georgia, Suite 400. The term of the Lease is for thirty-nine (39) months commencing September 1, 2020. The monthly base rent is $8,019 for the first twelve (12) months increasing thereafter to $8,768. The total rent for the entire lease term is $315,044 and $8,768 is payable as a security deposit. | |||
Lease term | 5 years | |||
Monthly base rent | $ 1,667 | |||
Operating lease rent expense | $ 106,201 | $ 91,052 | ||
Cell 3 [Member] | ||||
Operating Lease (Textual) | ||||
Area | ft² | 4,000 | |||
Security deposit | $ 25,000 | |||
Cell 4 [Member] | ||||
Operating Lease (Textual) | ||||
Area | m² | 6,000 | |||
Monthly base rent | $ 2,500 | |||
Security deposit | $ 8,768 | |||
DMINT [Member] | ||||
Operating Lease (Textual) | ||||
Area | ft² | 10,000 |
Operating Leases (Details) - Sc
Operating Leases (Details) - Schedule of balance sheet classification - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Asset | ||
Operating lease asset | $ 402,538 | $ 269,508 |
Total lease asset | 402,538 | |
Liability | ||
Operating lease liability – current portion | 133,180 | |
Operating lease liability – noncurrent portion | 273,166 | |
Total lease liability | $ 406,346 |
Operating Leases (Details) - _2
Operating Leases (Details) - Schedule of lease obligations | Dec. 31, 2021USD ($) |
Schedule of lease obligations [Abstract] | |
2022 | $ 150,139 |
2023 | 144,393 |
2024 | 50,000 |
2025 | 50,000 |
2026 | 41,667 |
Total payments | 436,199 |
Amount representing interest | (29,853) |
Lease obligation, net | 406,346 |
Less current portion | (133,180) |
Lease obligation – long term | $ 273,166 |
Common Stock (Details)
Common Stock (Details) - USD ($) | Nov. 02, 2021 | Aug. 18, 2021 |
Common Stock (Details) [Line Items] | ||
Purchase price per share (in Dollars per share) | $ 4.3 | |
Net proceeds (in Dollars) | $ 6,100,000 | |
Purchase agreement, description | the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional accredited investors (the “Investors”) pursuant to which the Company issued and sold, in a private placement (the “Private Placement”), (i) 1,969,091 shares (the “Shares”) of common stock, along with warrants to purchase up to 7,121,819 shares of common stock, for total net proceeds of approximately $22,918,000. | |
Private Placement [Member] | ||
Common Stock (Details) [Line Items] | ||
Shares of common stock | 1,418,605 | |
Warrant [Member] | ||
Common Stock (Details) [Line Items] | ||
Shares of common stock | 1,418,605 | |
Purchase price per share (in Dollars per share) | $ 4.3 |
Preferred Stock (Details)
Preferred Stock (Details) - shares | Aug. 07, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred Stock (Details) [Line Items] | |||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |
Series A Preferred Stock [Member] | |||
Preferred Stock (Details) [Line Items] | |||
Preferred stock, shares authorized | 10,000 | 10,000 | |
Certificate of designations, descriptions | The Certificate of Designations will provide that the Company may issue up to 10,000 shares of Series A Preferred Stock at a stated value (the “Stated Value”) of $1,000 per share. | ||
Cash dividend percentage | 12.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jan. 02, 2021 | Aug. 11, 2020 | Nov. 19, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 24, 2020 | May 13, 2020 |
Related Party Transactions (Details) [Line Items] | |||||||
Granted shares (in Shares) | 774,585 | 6,667 | |||||
Alina Dulimof [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Granted shares (in Shares) | 10,800 | ||||||
Share value per share (in Dollars per share) | $ 4.63 | ||||||
Non-cash stock compensation expense | $ 50,004 | ||||||
Amir Sternhell [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Granted shares (in Shares) | 10,800 | ||||||
Share value per share (in Dollars per share) | $ 4.63 | ||||||
Non-cash stock compensation expense | $ 50,004 | ||||||
Ehud Ernst [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Granted shares (in Shares) | 14,039 | ||||||
Share value per share (in Dollars per share) | $ 4.63 | ||||||
Non-cash stock compensation expense | $ 65,001 | ||||||
Mr. Herzog [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Voting interest | 10.30% | ||||||
Herzog [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Principal amount | $ 3,522,191 | $ 3,522,191 | |||||
Aggregate indebtedness | 3,582,355 | ||||||
Conversion of warrants, description | On August 11, 2020, Mr. Herzog converted $3,612,940 of indebtedness into 3,612 shares of Series A Preferred Stock (the terms of which are described below) and 802,875 Series A Conversion Warrants with an exercise price of $9.00 and 200,719 Series B Conversion Warrants with an exercise price of $4.50. | ||||||
Mr. Yakov [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Principal amount | 1,017,753 | 1,011,016 | |||||
Granted shares (in Shares) | 6,667 | ||||||
Series A Preferred Stock [Member] | Herzog [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Aggregate indebtedness | 3,582,355 | ||||||
Series A Preferred Stock [Member] | Mr. Yakov [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Aggregate indebtedness | $ 1,017,573 | $ 1,017,573 | |||||
Conversion of warrants, description | On August 11, 2020, Mr. Yakov converted $1,021,512 of indebtedness into 1,021 shares of Series A Preferred Stock (the terms of which are described in Note 10 below) and 227,003 Series A Conversion Warrants with an exercise price of $9.00 and 56,751 Series B Conversion Warrants with an exercise price of $4.50. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | ||
Oct. 20, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies (Details) [Line Items] | |||
Employment agreement, description | On October 20, 2017, the Company entered into a 7-year term employment agreement with its founder and President, effective January 1, 2018 through December 31, 2024. | ||
Annual salary | $ 375,000 | ||
Monthly automobile allowance | 2,500 | ||
Incentive bonus | 200,000 | $ 200,000 | $ 200,000 |
Debt existing sales | $ (3,500,000) | ||
Mr. Yakov [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Incentive bonus | $ 400,000 | ||
Series of Individually Immaterial Business Acquisitions [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Percentage of acquisition | 2.00% |
Income Tax (Details)
Income Tax (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Operating loss carry forwards description | At December 31, 2021, the Company had operating loss carry forwards of approximately $9,006,000, $3,417,000 of which expire from 2021 – 2040, and no expiration on the remaining amount. |
Income Tax (Details) - Schedule
Income Tax (Details) - Schedule of net deferred tax assets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets: | ||
NOL Carryover | $ 2,431,700 | $ 1,790,700 |
Allowance for Doubtful Accounts | 10,300 | 10,300 |
Depreciation and amortization | 687,605 | 467,658 |
Less valuation allowance | (3,129,605) | (2,268,658) |
Net deferred tax assets |
Income Tax (Details) - Schedu_2
Income Tax (Details) - Schedule of income tax provision - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of income tax provision [Abstract] | ||
Book loss | $ (1,045,000) | $ (373,000) |
State taxes | (299,000) | (107,000) |
Meals and entertainment | 1,800 | 800 |
Stock based compensation | 124,500 | 135,600 |
Non deductible expenses | 156,421 | |
Other adjustments | 200,332 | (368,891) |
Valuation allowance | 860,947 | 712,491 |
Income tax provision |
Segments (Details) - Schedule o
Segments (Details) - Schedule of reportable segment revenue | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Reportable segment revenue: | |
Revenue, net - cryptocurrency mining | $ 304,004 |
Fintech services revenue | 16,406,755 |
Total segment and consolidated revenue | 16,710,759 |
Reconciling Items: | |
Processing and servicing costs, excluding merchant portfolio amortization | (13,480,212) |
Amortization and depreciation expense | (1,255,674) |
Depreciation expense - cryptocurrency mining | (635,225) |
Salaries and wages | (2,126,451) |
Professional fees | (1,590,520) |
General and administrative expenses | (2,387,416) |
Interest expense | (116,737) |
Gain on forgiveness of debt | 236,231 |
Litigation expense | (333,158) |
Other income | 45 |
Net Loss | $ (4,978,358) |
Segments (Details) - Schedule_2
Segments (Details) - Schedule of total assets | Dec. 31, 2021USD ($) |
Total Assets: | |
Total assets | $ 43,529,491 |
Cryptocurrency Mining [Member] | |
Total Assets: | |
Total assets | 9,749,652 |
Fintech Services [Member] | |
Total Assets: | |
Total assets | $ 33,779,839 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jan. 03, 2022 | Jan. 31, 2022 | Dec. 31, 2021 |
Subsequent Events (Details) [Line Items] | |||
Armistice capital | $ 1,400,000 | ||
Number of exercise shares (in Shares) | 1,400,000 | ||
warrants per shares (in Dollars per share) | $ 0.0001 | ||
Crowd Ignition Inc [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Equity purchase percentage | 100.00% | ||
Shares issued (in Shares) | 1,318,408 | ||
Common stock price per share (in Dollars per share) | $ 0.0001 | ||
Aggregate purchase price | $ 5,300,000 | ||
Mr. Yakov’s [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Shares issued (in Shares) | 200,000 | ||
Common stock price per share (in Dollars per share) | $ 0.001 | ||
Base salary | $ 750,000 | ||
Bonus amount | 490,000 | ||
Bonus percentage | 0.02 | ||
Annual bonus | $ (300,000) | ||
Mr. Smith’s [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Shares issued (in Shares) | 275,000 | ||
Common stock price per share (in Dollars per share) | $ 0.001 | ||
Base salary | $ 350,000 | ||
Annual bonus | $ (150,000) | ||
Options vested term | 5 years |