Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Apr. 11, 2023 | Jun. 30, 2022 | |
Document Information Line Items | |||
Entity Registrant Name | RYVYL INC. | ||
Trading Symbol | RVYL | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 51,343,821 | ||
Entity Public Float | $ 26 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001419275 | ||
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, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Entity File Number | 001-34294 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 22-3962936 | ||
Entity Address, Address Line One | 3131 Camino Del Rio North, Suite 1400 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92108 | ||
City Area Code | 619 | ||
Local Phone Number | 631-8261 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Document Financial Statement Error Correction [Flag] | true | ||
Document Financial Statement Restatement Recovery Analysis [Flag] | false | ||
Auditor Firm ID | 2485 | ||
Auditor Name | Simon & Edward, LLP | ||
Auditor Location | Rowland Heights, CA | ||
Document Transition Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 13,960,887 | $ 89,045,202 |
Restricted cash | 26,872,835 | 514,493 |
Accounts receivable, net of allowance for credit losses of $82,331 and $54,795, respectively | 1,155,766 | 481,668 |
Accounts receivable from fines and penalties from merchants, net of allowance for credit losses of $27,536 and $9,454,261, respectively | 0 | 0 |
Inventory | 302,037 | 286,360 |
Cash due from gateways, net of allowance of $3,917,495 and $3,904,952, respectively | 7,427,105 | 6,209,376 |
Prepaid and other current assets | 9,497,825 | 28,968 |
Total current assets | 59,216,455 | 96,566,067 |
Non-current Assets: | ||
Property and equipment, net | 1,695,655 | 1,674,884 |
Other assets | 196,868 | 190,636 |
Goodwill | 26,752,624 | 6,548,034 |
Intangible Assets, net | 6,738,614 | 7,578,935 |
Operating lease right-of-use assets, net | 1,533,295 | 1,490,159 |
Investments - assets | 1,523,631 | 0 |
Total non-current assets | 38,440,687 | 17,482,648 |
Total assets | 97,657,142 | 114,048,715 |
Current Liabilities: | ||
Accounts payable | 1,630,217 | 469,129 |
Other current liabilities | 3,662,877 | 1,001,167 |
Accrued interest | 1,728,252 | 1,226,287 |
Payment processing liabilities, net | 28,912,489 | 2,312,657 |
Current portion of long term debt | 14,446 | 0 |
Convertible debt, net of debt discount of $0 and $2,993,408, respectively | 254,979 | 18,735,000 |
Derivative liability | 533,601 | 495,134 |
Total current liabilities | 36,736,861 | 24,239,374 |
Long term debt, net of debt discount of $24,348,791 and $41,344,822, respectively | 61,734,569 | 59,305,078 |
Operating lease liabilities, less current portion | 1,108,665 | 1,035,895 |
Total liabilities | 99,580,095 | 84,580,347 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Common stock, par value $0.001, 175,000,000 shares authorized, shares issued and outstanding of 49,727,355 and 42,831,816, respectively | 49,020 | 42,831 |
Common stock issuable, par value $0.001, 2,516,189 and 0 shares issuable, respectively | 1,754 | 0 |
Additional paid-in capital | 96,270,716 | 94,748,332 |
Accumulated other comprehensive income (loss) | 1,596,234 | 0 |
Accumulated deficit | (99,772,333) | (50,536,635) |
Less: Shares to be returned | (68,344) | (9,852,344) |
Less: Treasury stock, at cost; 0 and 714,831 shares, respectively | 0 | (4,933,816) |
Total stockholders' equity | (1,922,953) | 29,468,368 |
Total liabilities and stockholder's equity | $ 97,657,142 | $ 114,048,715 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit losses | $ 82,331 | $ 54,795 |
Accounts receivable from fines and penalties from merchants, allowance for credit losses | 27,536 | 9,454,261 |
Cash due from gateways, allowance | 3,917,495 | 3,904,952 |
Convertible debt, debt discount | 0 | 2,993,408 |
Long term debt, debt discount | $ 24,348,791 | $ 41,344,822 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 175,000,000 | 175,000,000 |
Common stock shares issued | 49,727,355 | 42,831,816 |
Common stock, shares outstanding | 49,727,355 | 42,831,816 |
Common stock issuable, shares issuable | 2,516,189 | 0 |
Treasury stock, shares | 0 | 714,831 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 32,909,112 | $ 26,304,502 |
Cost of Goods Sold | 16,786,593 | 10,069,661 |
Gross Profit | 16,122,519 | 16,234,841 |
Operating expenses: | ||
Advertising and marketing | 1,337,019 | 134,166 |
Research and development | 6,275,883 | 3,870,050 |
General and administrative | 6,602,967 | 16,878,536 |
Payroll and payroll taxes | 10,547,381 | 4,502,605 |
Professional fees | 5,311,678 | 3,132,528 |
Stock compensation for employees | 166,800 | 3,704,008 |
Stock grant expense | 2,305,650 | 0 |
Stock compensation for services | 496,497 | 12,306,365 |
Depreciation and amortization | 20,916,868 | 912,677 |
Total operating expenses | 53,960,743 | 45,440,935 |
Income (Loss) from operations | (37,838,224) | (29,206,094) |
Other income (expense): | ||
Interest expense | (8,168,784) | (1,931,713) |
Interest expense - debt discount | (15,100,047) | (2,993,408) |
Derivative expense | 0 | (3,435,178) |
Changes in fair value of derivative liability | 16,857,086 | 2,845,000 |
Derecognition expense on conversion of convertible debt | (5,709,672) | 0 |
Merchant liability settlement | 0 | (364,124) |
Merchant fines and penalty income | (401,908) | 401,908 |
Other income or expense | 1,117,148 | (586,390) |
Total other income (expense), net | (11,406,177) | (6,063,905) |
Loss before provision for income taxes | (49,244,401) | (35,269,999) |
Income tax provision | (8,703) | 4,906 |
Net Income (loss) | $ (49,235,698) | $ (35,274,905) |
Net loss per share: | ||
Basic and diluted (in Dollars per share) | $ (1.08) | $ (0.87) |
Weighted average number of common shares outstanding: | ||
Basic and diluted (in Shares) | 45,571,991 | 40,708,304 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) | Restricted Stock [Member] Common Stock [Member] | Restricted Stock [Member] Additional Paid-in Capital [Member] | Restricted Stock [Member] | Investor [Member] Common Stock [Member] | Investor [Member] Additional Paid-in Capital [Member] | Interest Expense [Member] Common Stock [Member] | Interest Expense [Member] Additional Paid-in Capital [Member] | Interest Expense [Member] Common Stock to be Issued [Member] | Interest Expense [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Common Stock to be Returned [Member] | Treasury Stock, Common [Member] | Common Stock to be Issued [Member] | AOCI Attributable to Parent [Member] | Total |
Balance at Dec. 31, 2020 | $ 30,711 | $ 12,559,074 | $ (15,261,730) | $ (2,671,945) | |||||||||||||
Balance (in Shares) at Dec. 31, 2020 | 30,710,645 | ||||||||||||||||
Issuances of common stock, net of issuance costs | $ 639 | $ 4,768,341 | $ 4,768,980 | $ 1,000 | $ (1,000) | $ 4,773 | 45,800,718 | 45,805,491 | |||||||||
Issuances of common stock, net of issuance costs (in Shares) | 639,144 | 999,996 | 4,772,500 | ||||||||||||||
Common stock issued for services | $ 826 | 10,228,066 | 10,228,892 | ||||||||||||||
Common stock issued for services (in Shares) | 826,394 | ||||||||||||||||
Common stock issued upon conversion of note payable | $ 56 | $ 653,411 | $ 653,467 | $ 1,944 | 3,848,056 | 3,850,000 | |||||||||||
Common stock issued upon conversion of note payable (in Shares) | 56,249 | 1,944,416 | |||||||||||||||
Issuances of common stock from previous unregistered shares | $ 600 | (600) | |||||||||||||||
Issuances of common stock from previous unregistered shares (in Shares) | 600,000 | ||||||||||||||||
Issuances of common stock for acquisition | $ 1,000 | 12,139,000 | 12,140,000 | ||||||||||||||
Issuances of common stock for acquisition (in Shares) | 1,000,000 | ||||||||||||||||
Common stock issued for stock options exercised | $ 113 | 2,225 | $ 2,338 | ||||||||||||||
Common stock issued for stock options exercised (in Shares) | 112,885 | 117,297 | |||||||||||||||
Stock compensation expense | 1,021,725 | $ 1,021,725 | |||||||||||||||
Purchases of treasury share | $ (715) | $ (9,852,344) | $ (4,933,816) | (14,786,875) | |||||||||||||
Purchases of treasury share (in Shares) | (1,436,888) | (714,631) | |||||||||||||||
Net loss | (35,274,905) | (35,274,905) | |||||||||||||||
Exercise of warrants - common stocks issued from issuable | $ 1,884 | 3,729,316 | 3,731,200 | ||||||||||||||
Exercise of warrants - common stocks issued from issuable (in Shares) | 1,884,418 | ||||||||||||||||
Balance at Dec. 31, 2021 | $ 42,831 | 94,748,332 | (50,536,635) | $ (9,852,344) | $ (4,933,816) | $ 29,468,368 | |||||||||||
Balance (in Shares) at Dec. 31, 2021 | 43,546,647 | (1,436,888) | (714,631) | 42,831,816 | |||||||||||||
Issuances of common stock, net of issuance costs | $ 33 | (33) | |||||||||||||||
Issuances of common stock, net of issuance costs (in Shares) | 33,333 | ||||||||||||||||
Common stock issued for services | $ 355 | 463,993 | $ 464,348 | ||||||||||||||
Common stock issued for services (in Shares) | 354,883 | ||||||||||||||||
Common stock issued upon conversion of note payable | $ 1,897 | $ 2,524,703 | $ 1,741 | $ 2,528,341 | $ 5,964 | 12,820,171 | 12,826,135 | ||||||||||
Common stock issued upon conversion of note payable (in Shares) | 1,896,876 | 1,741,160 | 5,956,012 | ||||||||||||||
Issuances of common stock for acquisition | $ 500 | 2,109,500 | 2,110,000 | ||||||||||||||
Issuances of common stock for acquisition (in Shares) | 500,000 | ||||||||||||||||
Common stock issued for stock options exercised | $ 12 | 5,204 | $ 5,216 | ||||||||||||||
Common stock issued for stock options exercised (in Shares) | 12,417 | 12,417 | |||||||||||||||
Common stock issued to employees as stock compensation | $ 1,126 | 2,369,686 | $ 13 | $ 2,370,826 | |||||||||||||
Common stock issued to employees as stock compensation (in Shares) | 1,125,773 | 12,756 | |||||||||||||||
Common stock contributed and cancelled from shareholder | $ (2,300) | (10,601,700) | $ 9,784,000 | (820,000) | |||||||||||||
Common stock contributed and cancelled from shareholder (in Shares) | (2,300,000) | 1,300,000 | |||||||||||||||
Other comprehensive loss | $ 1,596,234 | 1,596,234 | |||||||||||||||
Purchases of treasury share | $ (3,236,723) | (3,236,723) | |||||||||||||||
Purchases of treasury share (in Shares) | (683,755) | ||||||||||||||||
Treasury Stock canceelled | $ (1,399) | (8,169,140) | $ 8,170,539 | ||||||||||||||
Treasury Stock canceelled (in Shares) | (1,398,586) | 1,398,586 | |||||||||||||||
Net loss | (49,235,698) | (49,235,698) | |||||||||||||||
Balance at Dec. 31, 2022 | $ 49,020 | $ 96,270,716 | $ (99,772,333) | $ (68,344) | $ 1,754 | $ 1,596,234 | $ (1,922,953) | ||||||||||
Balance (in Shares) at Dec. 31, 2022 | 49,727,355 | (136,888) | 200 | 1,753,916 | 49,727,355 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS € in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Cash flows from operating activities: | ||
Net loss | $ (49,235,698) | $ (26,453,512) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation expense | 20,916,868 | 912,677 |
Forgiveness of PPP Loan | 0 | (272,713) |
Noncash lease expense | 43,136 | 38,555 |
Stock compensation expense | 166,800 | 3,704,008 |
Restricted stock issued for services | 0 | 4,768,980 |
Stock compensation expense for employees | 2,305,650 | 0 |
Common stocks issued for professional fees | 496,497 | 7,537,385 |
Stock compensation issued for interest | 2,418,000 | 653,467 |
Interest expense - debt discount | 15,100,047 | 2,993,408 |
Accretion expense | (1,120,489) | 0 |
Derecognition expense on conversion of convertible debt | 5,709,672 | 0 |
Derivative expense | 0 | 3,435,178 |
Changes in fair value of derivative liability | (16,857,086) | (2,845,000) |
Changes in assets and liabilities: | ||
Accounts receivable | (674,098) | 0 |
Other receivable, net | (692,704) | 2,382,352 |
Inventory | (15,677) | (161,859) |
Prepaid and other current assets | (1,523,631) | (6,343,905) |
Cash due from gateways, net | (1,217,729) | (11,637,812) |
Other assets | (6,232) | 686,876 |
Accounts payable | 1,161,088 | 443,263 |
Other current liabilities | 2,661,710 | 301,469 |
Accrued interest | 501,965 | 1,226,287 |
Payment processing liabilities, net | 10,517,952 | (8,534,989) |
Net cash provided by (used in) operating activities | (9,343,959) | (27,165,885) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (162,337) | (158,858) |
Deposit on acquisitions | (2,175,734) | 0 |
Acquisition of Northeast Merchant Systems, Inc. | (500,000) | (2,500,000) |
Cash provided for Transact Europe Holdings OOD Acquisition | (28,810,600) | 0 |
Cash provided for Sky Financial & Intelligence asset acquisition | (16,000,000) | 0 |
Net cash used in investing activities | (47,648,671) | (2,658,858) |
Cash flows from financing activities: | ||
Treasury stock purchases | (4,056,723) | (4,934,531) |
Proceeds from stock option exercises | 7,942 | 2,338 |
Borrowings (repayments) from convertible debt | (6,000,000) | 76,800,000 |
Borrowings from notes payable | 0 | 350,000 |
Proceeds from exercise of warrant | 0 | 3,731,200 |
Repurchase of common stock from stockholder | 0 | (5,693,863) |
Proceeds from issuance of common stock | 0 | 45,805,491 |
Net cash provided by (used in) financing activities | (10,048,781) | 116,060,635 |
Restricted cash acquired from Transact Europe | 16,719,204 | 0 |
Cash acquired from acquisition of Northeast and ChargeSavvy | 0 | 1,491,068 |
Foreign currency translation adjustment | 1,596,234 | 0 |
Net increase in cash, cash equivalents, and restricted cash | (48,725,973) | 87,726,960 |
Cash, cash equivalents, and restricted cash – beginning of period | 89,559,695 | 1,832,735 |
Cash, cash equivalents, and restricted cash – end of period | 40,833,722 | 89,559,695 |
Cash paid during the period for: | ||
Interest | 5,750,784 | 2,504,533 |
Income taxes | 0 | 0 |
Non-cash financing and investing activities: | ||
Convertible debt conversion to common stock | 8,550,000 | 3,850,000 |
Common stock issued for acquisition of ChargeSavvy | 0 | 12,140,000 |
Interest accrual from convertible debt converted to common stock | 0 | 8,653,467 |
Short-term notes payable converted to common stock | $ 0 | $ 810,000 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Organization RYVYL, Inc. (the “Company”) is a tech company formed with the intent of developing, marketing and selling innovative blockchain-based payment solutions, which the Company believes will cause favorable disruption in the payment solutions marketplace. The Company’s core focus is to develop and monetize disruptive blockchain-based applications, integrated within an end-to-end suite of financial products, capable of supporting a multitude of industries. The Company’s proprietary, blockchain-based systems are designed to facilitate, record and store a virtually limitless volume of tokenized assets, representing cash or data, on a secured, immutable blockchain-based ledger. The Company was formerly known as ASAP Expo, Inc (“ASAP”), which was incorporated April 10, 2007 under the laws of the State of Nevada. On January 4, 2020, PubCo and GreenBox POS LLC, a Washington limited liability company (“PrivCo”), entered into an Asset Purchase Agreement (the “Agreement”), to memorialize a verbal agreement (the “Verbal Agreement”) entered into on April 12, 2018, by and among PubCo (the buyer) and PrivCo, which was formed on August 10, 2017 (the seller). On April 12, 2018, pursuant to the Verbal Agreement, PubCo acquired PrivCo’s blockchain gateway and payment system business, point of sale system business, delivery business and kiosk business, bank and merchant accounts, as well as all intellectual property related thereto (the “GreenBox Business”). As consideration for the GreenBox Business, on April 12, 2018, PubCo assumed PrivCo’s liabilities that had been incurred in the normal course of the GreenBox Business (the “GreenBox Acquisition”). For accounting and reporting purposes, PubCo deemed the GreenBox Acquisition a “Reverse Acquisition” with PrivCo designated the “accounting acquirer” and PubCo designated the “accounting acquiree.” On May 21, 2021, the Company acquired all of the outstanding stock of Northeast Merchant Systems, Inc. (“Northeast”) in a transaction treated as a business combination. Northeast is a merchant services company providing merchant credit card processing through their own Bank Identification Number (BIN) with the acquiring bank Merrick. This involves inside operations for new merchants that include sales assistance and applications processing, underwriting, and onboarding; inside operations for existing merchants include risk monitoring and customer service. Outside operations include: equipment service or replacement; sales calls and applications, site inspections and identity verification; security verification; and on-site customer service and technical support. On July 13, 2021 (the “Closing Date”), RYVYL, Inc. (the “Company”) entered into and closed on a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Charge Savvy LLC, an Illinois limited liability company (“Charge Savvy”), and Charge Savvy’s three members (collectively, the “Sellers”). As a result of the Purchase Agreement, the Company purchased all of Charge Savvy’s issued and outstanding membership interests from the Sellers and Charge Savvy became a wholly owned subsidiary of the Company. Although the Purchase Agreement is dated July 9th, it was entered into and closed on July 13th.The purchase price under the Purchase Agreement for the all- stock transaction consisted of 1,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) being issued and delivered to Sellers in proportion to the Sellers’ share of their membership interests in Charge Savvy. The share price at issuance was $12.14. Charge Savvy is a global Fintech company that specializes on developing software and providing payment processing and point of sale services to the merchant services industry. Charge Savvy also owns an office building located in Chicago, Illinois where it is headquartered. On April 1, 2022, the Company completed the acquisition of Transact Europe Holdings OOD. Transact Europe EAD (TEU) is an EU regulated electronic money institution headquartered in Sofia Bulgaria. TEU is a Principal Level Member of Visa, a Worldwide Member of MasterCard, and a Principal Member of China UnionPay. In addition, TEU is part of the direct SEPA program. With a global footprint, proprietary payment gateway, and technology platforms, TEU offers a comprehensive portfolio of services and decades of industry experience. TEU provides complete payment solutions by offering acquiring, issuing of prepaid cards and agent banking, serving hundreds of clients. The Company paid approximately $28.8 million (€26.0 million) in total consideration for the purchase. Name Change On May 3, 2018, PubCo formally changed its name to GreenBox POS LLC, then subsequently changed its name to GreenBox POS on December 13, 2018. On October 13, 2022 GreenBox POS changed its name to RYVYL Inc. (“RYVYL”). Unless the context otherwise requires, all references to “the Company,” “we,” “our”, “us” and “PubCo” refer to RYVYL Inc.. Unless the context otherwise requires, all references to “PrivCo” or the “Private Company” refer to GreenBox POS LLC, a limited liability company, formed in the state of Washington. Basis of Presentation and Consolidation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The financial statements include the combined accounts of PubCo and PrivCo. All amounts are presented in U.S. Dollars unless otherwise stated. The accompanying financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES COVID-19 considerations In December 2019, a novel strain of coronavirus (“COVID-19”) was identified and the disease has since spread across the world. In March 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, and created significant volatility and disruption in the financial and capital markets. The full extent to which the COVID-19 outbreak will impact the Company’s business, results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning COVID-19 and the actions to contain or treat its impact and the economic impact and the economic impact on local, regional, national and international markets. As the COVID-19 pandemic continues, the Company’s results of operations, financial condition and cash flows may be materially adversely affected, particularly if the pandemic persists for a significant period of time. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The Act includes provisions relating to refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. These provisions are not expected to have a material effect on the Company’s unaudited consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with the 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. Reclassification Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flows. Cash, Cash Equivalents and Restricted Cash The Company’s cash, cash equivalent and Restricted cash represents the following: ● Cash and cash equivalents ● Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. 2022 2021 Cash and cash equivalents $ 13,960,887 $ 89,045,202 Restricted cash 26,872,835 514,493 $ 40,833,722 $ 89,559,695 Cash Due from Gateways and Payment Processing Liabilities The Company’s primary source of revenues continues to be payment processing services for its merchant clients. When such merchant makes a sale, the process of receiving the payment card information, engaging the banks for transferring the proceeds to the merchant’s account via digital gateways, and recording the transaction on a blockchain ledger are the activities for which the Company gets to collect fees. In 2022 and 2021 the Company utilized several gateways. The gateways have strict guidelines pertaining to scheduling of the release of funds to merchants based on several criteria, such as return and chargeback history, associated risk for the specific business vertical, average transaction amount and so on. In order to mitigate processing risks, these policies determine reserve requirements and payment in arear strategy. While reserve and payment in arrears restrictions are in effect for a merchant payout, the Company records gateway debt against these amounts until released. Therefore, the total gateway balances reflected in the Company’s books represent the amount owed to the Company for processing – these are funds from transactions processed and not yet distributed. Revenue Recognition Revenue is recognized upon transfer of control of promised goods or services to the Company’s customers or when the Company satisfies any performance obligations under contract. The amount of revenue reflects the consideration the Company expects to be entitled to in exchange for the respective goods or services provided. Further, under Accounting Standards Codification 606, “Revenue from Contracts with Customers”, (“ASC 606”), contract assets or contract liabilities that arise from past performance but require a further performance before the obligation can be fully satisfied must be identified and recorded on the balance sheet until respective settlements have been met. The Company’s primary revenue source is generated from payment processing services. Payment processing services revenue is based on a percentage of each transaction’s value and/or upon fixed amounts specified per each transaction or service and is recognized as such transactions or services are performed, at a point in time. Accounts Receivable and Allowance for Credit Losses The Company maintains an allowance for credit losses for estimated losses from the inability of gateways to make required payments. The allowance for credit losses is evaluated periodically based on the aging of accounts receivable, the operational relationship with gateways and their payment history, historical charge-off experience and other assumptions, such as current assessment of economic conditions. Prepaid Expenses Prepaid expenses primarily consist of $6.9 million in deposits made with credit card companies iunder Transact Europe and the prepayment associated with other acquisitions. Property and Equipment Property and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets, which range from three to eight years. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period. Fair Value of Financial Instruments The Company assesses the fair value of financial instruments based on the provisions of ASC 820, Fair Value Measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability between market participants on the measurement date. ASC 820 also establishes a hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1- Quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3- Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table describes the valuation techniques used to calculate the fair value for assets in Level 3. The significant unobservable input used in the fair value measurement of the Company’s identifiable intangible assets is the discount rate. The change in this input could result in a change of fair value measurement: The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10: Fair Value at December 31, 2022 Customer Relationships $ 4,856,653 Business intellectual properties 1,881,962 Derivative Liability $ 254,979 Fair Value at December 31, 2021 Customer Relationship $ 5,820,195 Business Technology/IP 2,611,088 Derivative liability $ 18,735,000 Goodwill and Other Intangible Assets The Company accounts for acquisitions of businesses in accordance with the acquisition method. Goodwill represents the excess of the purchase price of acquired businesses over the fair value of the identifiable assets acquired and liabilities assumed. Acquisition costs are expensed as incurred. Goodwill and other intangible assets acquired in a business combination determined to have an indefinite useful life are generally not amortized, but instead are tested for impairment at least annually and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. Other intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever management believes that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. To the extent that the carrying value is determined to be unrecoverable, an impairment loss is recognized through a charge to expense. As of December 31, 2022, other than a charge off of 100 percent of the consideration paid in connection with the contracted acquisition of the Sky Financial portfolio, the Company performed an impairment analysis on the other acquired goodwill and other long-lived assets and is of the view that their values are supportable and recoverable. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As of December 31, 2021, we have no material unrecognized tax benefits. Earnings Per Share A basic earnings per share is computed by dividing net income to common stockholders by the weighted average number of shares outstanding for the year. Dilutive earnings per share include the effect of any potentially dilutive debt or equity under the treasury stock method, if including such instruments is dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the years ended December 31, 2021 and 2020, as there are no potential shares outstanding that would have a dilutive effect. Leases On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statement of operations and statement of cash flows. ASC 842 supersedes nearly all existing lease accounting guidance under GAAP issued by the Financial Accounting Standards Board (“FASB”) including ASC Topic 840, Leases. For operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the IBR as of that date. Segment Reporting The Company has organized its operations into two segments: North America, and International. These segments reflect the way the Company evaluates its business performance and manages its operations. During 2021, the Company operated in one reporting segment, since the International Segment was not introduced until 2022. Our chief operating decision maker is our chief executive officer. Management determined the operational data used by the chief operating decision maker is that of the two reportable segments. Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Management evaluates the performance of its segments and allocates resources to them based on operating income or (loss) as compared to prior periods and current performance levels. Recently Accounting Pronouncement Not Adopted In October 2021, the FASB issued ASU 2021-08, " Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers The FASB issued ASU 2020-06 (“Update”) to simplify the accounting for convertible instruments by eliminating large sections of the existing guidance in this area. It also eliminates several triggers for derivative accounting, including a requirement to settle certain contracts by delivering registered shares. These changes are intended to make GAAP easier to apply and, therefore, reduce the frequency of errors in this part of the literature. Early adoption is permitted for fiscal years beginning after December 15, 2020. For SEC filers, excluding smaller reporting companies, this Update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, this Update is effective for fiscal years beginning after December 15, 2023, including interim periods therein. The Company is evaluating the impact of this guidance on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”. The standard, including subsequently issued amendments (ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10 and ASU 2019-11), requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is evaluating the impact of this guidance on its consolidated financial statements. |
RESTATEMENT OF CONSOLIDATED FIN
RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Prior Period Adjustment [Abstract] | |
Error Correction [Text Block] | 3. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS During the preparation of this Annual Report, the Company determined that it had not appropriately accounted for certain historical transactions under US GAAP. In accordance with Staff Accounting Bulletin (“SAB”) 99, Materiality, and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the materiality of the errors from qualitative and quantitative perspectives, individually and in aggregate, and concluded that the errors were material to the Consolidated Statements of Operations for the quarters ending March 31, 2021, June 30, 2021, September 30, 2021, March 31, 2022, June 30, 2022, and September 30, 2022, and for the annual period ending December 31, 2021. Based on this evaluation, on January 13, 2023 the Audit Committee, with the concurrence of management, concluded that the Company’s previously issued financial statements for the periods above would need to be restated and could no longer be relied upon. The Company has restated the impacted financial statements for each of these periods, and presented the effects of the restatement adjustments to those statements below. The categories of misstatements and their impact on our previously issued consolidated financial statements are described in more detail below. Description of Misstatements The following include descriptions of the significant adjustments to the Company’s financial position and results of operations from the previously reported consolidated financial statements. Commissions Revenue Repurchases of Company Stock Gateway Bank Fees Charge-off of Accounts Receivable Merchant Liability Convertible Debt In addition, the Company has also recorded adjustments to make certain reclassifications on its balance sheet, to record the loss on extinguishment of debt, and to record fee income from merchants related to assessed fines and penalties. The effect of all restatement adjustments recorded by the Company on its previously issued financial statements are presented below. Description of Restatement Tables The following tables present the impact of the adjustments described above to our previously reported consolidated balance sheet as of December 31, 2021 and the consolidated statements of income, comprehensive income, changes in equity, and cash flows for the quarters ended March 31, 2021, June 30, 2021, September 30, 2021, March 31, 2022, June 30, 2022 and September 30, 2022 (dollars in thousands): Balance Sheet (Unaudited) September 30, 2022 As previously reported Restatement impacts As restated Cash and cash equivalents $ 11,021 $ (4,074 ) $ 6,947 Restricted cash 26,607 4,009 30,616 Accounts receivable, net 790 - 790 Cash due from gateways, net 15,125 (8,896 ) 6,229 Prepaid and other current assets 14,568 (7,030 ) 7,537 Accounts payable 97 (116 ) (19 ) Other current liabilities, and accrued interest 1,416 1,717 3,133 Payment processing liabilities, net 22,593 2,320 24,913 Additional paid-in capital 99,618 781 100,399 Accumulated deficit (64,254 ) (19,502 ) (83,756 ) Shares to be returned - (888 ) (888 ) Treasury stock, at cost - (303 ) (303 ) Statement of Operations (Unaudited) Three Months Ended September 30, 2022 As previously reported Restatement impacts As restated Cost of revenue $ 4,270 $ 63 $ 4,333 Interest expense (1,907 ) 105 (1,802 ) Loss on settlement of debt - (2,395 ) (2,395 ) Merchant fines and penalty income - (368 ) (368 ) Loss before provision for income taxes (15,135 ) (714 ) (15,849 ) Net loss (15,170 ) (714 ) (15,884 ) Balance Sheet (Unaudited) June 30, 2022 As previously reported Restatement impacts As restated Cash and cash equivalents $ 29,099 $ (11,425 ) $ 17,674 Restricted cash 26,526 11,425 37,951 Accounts receivable, net 620 - 620 Cash due from gateways, net 14,271 (9,079 ) 5,192 Prepaid and other current assets 14,105 (6,275 ) 7,829 Accounts payable 1,348 (484 ) 864 Other current liabilities, and accrued interest 3,586 1,808 5,395 Payment processing liabilities, net 33,468 2,073 35,541 Convertible debt, net 59,408 (1,051 ) 58,358 Derivative liability 61 (61 ) - Additional paid-in capital 89,387 1,519 90,905 Accumulated deficit (49,084 ) (18,788 ) (67,872 ) Shares to be returned - (68 ) (68 ) Treasury stock, at cost - (303 ) (303 ) Statement of Operations (Unaudited) Three Months Ended June 30, 2022 As previously reported Restatement impacts As restated Cost of revenue $ 4,143 $ 87 $ 4,230 Interest expense (1,866 ) 83 (1,783 ) Loss on settlement of debt - (757 ) (757 ) Changes in fair value of derivative liability 26,374 61 26,435 Merchant fines and penalty income - 82 82 Other income (expense) 186 2,345 2,531 Income (loss) before provision for income taxes 10,333 1,681 12,014 Net income (loss) 10,410 1,681 12,091 Balance Sheet (Unaudited) March 31, 2022 As previously reported Restatement impacts As restated Cash and cash equivalents $ 27,594 $ (7,142 ) $ 20,452 Restricted cash 0 227 228 Accounts receivable, net 469 - 469 Cash due from gateways, net 20,807 (8,853 ) 11,955 Prepaid and other current assets 35,263 (6,275 ) 28,988 Goodwill 6,048 500 6,548 Accounts payable 1,069 (447 ) 622 Other current liabilities, and accrued interest 2,385 2,441 4,826 Payment processing liabilities, net 5,390 2,430 7,820 Convertible debt, net 58,826 (1,601 ) 57,225 Additional paid-in capital 90,983 (512 ) 90,470 Accumulated deficit (59,494 ) (20,686 ) (80,180 ) Shares to be returned - (2,863 ) (2,863 ) Treasury stock, at cost (8,171 ) (303 ) (8,473 ) Statement of Operations (Unaudited) Three Months Ended March 31, 2022 As previously reported Restatement impacts As restated Cost of revenue $ 2,564 $ 216 $ 2,780 General and administrative expenses 1,792 - 1,792 Interest expense (1,889 ) (1,941 ) (3,830 ) Loss on settlement of debt - (900 ) (900 ) Changes in fair value of derivative liability (7,700 ) - (7,700 ) Merchant fines and penalty income - - - Other income (expense) 49 (4,414 ) (4,364 ) Loss before provision for income taxes (21,236 ) (8,111 ) (29,347 ) Net loss (21,316 ) (8,111 ) (29,427 ) Balance Sheet December 31, 2021 As previously reported Restatement impacts As restated Cash and cash equivalents $ 89,560 $ (514 ) $ 89,045 Restricted cash - 514 514 Accounts receivable, net 482 - 482 Cash due from gateways, net 18,942 (12,732 ) 6,209 Prepaid and other current assets 6,421 (6,392 ) 29 Goodwill 6,048 500 6,548 Accounts payable 871 (402 ) 469 Other current liabilities, and accrued interest 1,727 500 2,227 Payment processing liabilities, net 4,998 (2,685 ) 2,313 Additional paid-in capital 88,574 6,174 94,748 Accumulated deficit (38,178 ) (12,359 ) (50,537 ) Shares to be returned - (9,852 ) (9,852 ) Treasury stock, at cost (4,934 ) - (4,934 ) Statement of Operations (Unaudited) Three Months Ended December 31, 2021 As previously reported Restatement impacts As restated Cost of revenue $ 4,074 $ (201 ) $ 3,873 General and administrative expenses 7,466 6,116 13,582 Merchant fines and penalty income - 75 75 Other income (expense) 271 (802 ) (530 ) Loss before provision for income taxes (10,284 ) (8,289 ) (18,573 ) Net loss (7,035 ) (8,289 ) (15,324 ) Balance Sheet (Unaudited) September 30, 2021 As previously reported Restatement impacts As restated Cash and cash equivalents $ 29,707 $ (305 ) $ 29,403 Restricted cash - 305 305 Accounts receivable, net 229 - 229 Cash due from gateways, net 19,418 (6,540 ) 12,878 Accounts payable 802 (327 ) 475 Payment processing liabilities, net 273 (2,624 ) (2,351 ) Additional paid-in capital 90,291 4,674 94,965 Accumulated deficit (31,143 ) (4,069 ) (35,213 ) Shares to be returned - (4,194 ) (4,194 ) Treasury stock, at cost (2,680 ) - (2,680 ) Statement of Operations (Unaudited) Three Months Ended September 30, 2021 As previously reported Restatement impacts As restated Cost of revenue $ 2,421 $ 335 $ 2,756 General and administrative expenses 784 1,648 2,433 Merchant fines and penalty income - 86 86 Other income (expense) (37 ) - (37 ) Loss before provision for income taxes (2,796 ) (249 ) (3,045 ) Net loss (6,050 ) (249 ) (6,299 ) Balance Sheet (Unaudited) June 30, 2021 As previously reported Restatement impacts As restated Cash and cash equivalents $ 29,797 $ (57 ) $ 29,740 Restricted cash - 57 57 Accounts receivable, net 75 - 75 Cash due from gateways, net 15,759 (6,267 ) 9,492 Accounts payable 520 (241 ) 280 Payment processing liabilities, net 4,296 (2,687 ) 1,609 Additional paid-in capital 73,916 4,674 78,590 Accumulated deficit (25,094 ) (3,820 ) (28,914 ) Shares to be returned - (4,194 ) (4,194 ) Treasury stock, at cost (933 ) - (933 ) Statement of Operations (Unaudited) Three Months Ended June 30, 2021 As previously reported Restatement impacts As restated Cost of revenue $ 1,323 $ 370 $ 1,694 General and administrative expenses 298 - 298 Interest expense - (594 ) (594 ) Merchant fines and penalty income - 104 104 Other income (expense) (4 ) - (4 ) Loss before provision for income taxes (40 ) (266 ) (306 ) Net loss (40 ) (266 ) (306 ) Balance Sheet (Unaudited) March 31, 2021 As previously reported Restatement impacts As restated Cash and cash equivalents $ 35,697 $ (101 ) $ 35,596 Restricted cash - 101 101 Accounts receivable, net 10 - 10 Cash due from gateways, net 11,849 (6,987 ) 4,862 Accounts payable 178 (136 ) 42 Payment processing liabilities, net 5,355 (3,776 ) 1,579 Additional paid-in capital 71,898 4,674 76,572 Accumulated deficit (25,054 ) (3,554 ) (28,608 ) Shares to be returned - (4,194 ) (4,194 ) Treasury stock, at cost - - - Statement of Operations (Unaudited) Three Months Ended March 31, 2021 As previously reported Restatement impacts As restated Cost of revenue $ 1,594 $ 153 $ 1,747 General and administrative expenses 566 - 566 Interest expense (594 ) - (594 ) Loss on settlement of debt - - - Changes in fair value of derivative liability - - - Merchant fines and penalty income - 136 136 Other income (expense) (15 ) - (15 ) Loss before provision for income taxes (13,329 ) (17 ) (13,346 ) Net loss (13,329 ) (17 ) (13,346 ) |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | 4. ACQUISITIONS Northeast Merchant Systems, Inc. On May 21, 2021, the Company acquired all the outstanding stock of Northeast Merchant Systems, Inc. (“Northeast”). Northeast is a merchant services company providing merchant credit card processing through their own Bank Identification Number (BIN) with the acquiring bank Merrick. This involves inside operations for new merchants that include sales assistance and applications processing, underwriting, and onboarding; inside operations for existing merchants include risk monitoring and customer service. Outside operations include: equipment service or replacement; sales calls and applications; site inspections and identity verification; security verification; and on-site customer service and technical support. Purchase Price Allocation The acquisition qualified as a business combination and was accounted for using the acquisition method. Accordingly, the total fair value of consideration transferred of $2,500,000 for the acquisition was allocated to the net tangible, intangible and liabilities acquired using fair value estimates at the date of acquisition. The excess of the purchase price over the fair value of the net tangible and intangible assets acquired was allocated to goodwill, which is taxable. The following summarizes the estimated fair values of the net assets acquired: Tangible assets (liabilities): Net assets and liabilities $ (70,057 ) Intangible assets: Customer relationships 276,583 Goodwill 2,293,474 2,570,057 Total net assets acquired $ 2,500,000 The acquisition was funded through cash on hand, and there were no transaction costs associated with the acquisition. The agreement also provides for a future additional contingent purchase price payment (earn-out) of $500,000, which is derived using the performance of Northeast and is based on a predetermined formula. As of December 31, 2021, the Company believes it is probable that the target will be achieved and, accordingly, has provided an accrual for the earn out amount. Charge Savvy LLC On July 13, 2021 (the “Closing Date”), RYVYL, Inc. (the “Company”) entered into and closed on a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Charge Savvy LLC, an Illinois limited liability company (“Charge Savvy”), and Charge Savvy’s three members (collectively, the “Sellers”). As a result of the Purchase Agreement, the Company purchased all of Charge Savvy’s issued and outstanding membership interests from the Sellers and Charge Savvy became a wholly owned subsidiary of the Company. Although the Purchase Agreement is dated July 9th, it was entered into and closed on July 13th.The purchase price under the Purchase Agreement for the all- stock transaction consisted of 1,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) being issued and delivered to Sellers in proportion to the Sellers’ share of their membership interests in Charge Savvy. The share price at issuance was $12.14. Charge Savvy is a global Fintech company that specializes on developing software and providing payment processing and point of sale services to the merchant services industry. Charge Savvy also owns an office building located in Chicago, Illinois where it is headquartered. Purchase Price Allocation The acquisition qualified as a business combination and was accounted for using the acquisition method. Accordingly, the total fair value of consideration transferred of $12,140,000 for the acquisition was allocated to the net tangible, intangible and liabilities acquired using fair value estimates at the date of acquisition. The excess of the purchase price over the fair value of the net tangible and intangible assets acquired was allocated to goodwill, which is taxable. The following summarizes the estimated fair values of the net assets acquired: Tangible assets (liabilities): Land/building $ 1,360,000 Other net assets (1,129,259 ) 230,741 Intangible assets: Customer relationships 5,543,612 Business technology 2,611,088 Goodwill 3,754,559 11,909,259 Total net assets acquired $ 12,140,000 The acquisition was funded by issuing 1,000,000 shares of common stock. Transact Europe Holdings Acquisition On April 1, 2022, the Company acquired Transact Europe Holdings for approximately $28.8 million (€26.0 million) in cash. Transact Europe EAD (TEU), an EU regulated electronic money institution headquartered in Sofia, Bulgaria, boasts an array of licenses such as principal level membership of Visa, worldwide membership of MasterCard, and principal membership of China UnionPay. TEU is also part of the direct SEPA (Single Euro Payments Area), a payment system enabling cashless payments across continental Europe. The Company paid approximately $28.8 million as of March 31, 2022 but the transaction closed on April 1, 2022. As a result, the financial statements as of and for the three months ended March 31, 2022 does not include financial statements of TEU. The following summarizes the estimated fair values of the net assets acquired which is recorded as of April 1, 2022: Tangible assets (liabilities): Net assets and liabilities $ 7,339,229 Intangible assets: Customer relationships 1,266,781 Goodwill 20,204,590 21,471,371 Total net assets acquired $ 28,810,600 Assets Purchase of Sky Financial Portfolio On March 31, 2022, the Company acquired a portfolio of merchant accounts from Sky Financial & Intelligence for $18,110,000. The Company paid $16,000,000 of cash in March 2022 and is scheduled to issue 500,000 shares of restricted common stock for the transaction in May 2022. The following summarizes the estimated fair values of the net assets acquired: Intangible assets: Customer relationships $ 18,110,000 After the closing of the acquisition, the Company has not received the expected access to the merchant accounts and the ISO management portal in accordance with the purchase agreement. The Company has elected to reverse the residual revenue associated with the Sky Financial portfolio in its 2022 financial reports and record a charge for the entire consideration paid. The Company will vigorously seek to recover the paid acquisition price from the seller. |
SETTLEMENT PROCESSING
SETTLEMENT PROCESSING | 12 Months Ended |
Dec. 31, 2022 | |
Settlement Processing Abstract | |
Settlement Processing [Text Block] | 5. SETTLEMENT PROCESSING The Company’s proprietary blockchain-based technology serves as the settlement engine for all transactions within the Company’s ecosystem. The blockchain ledger provides a robust and secure platform to log immense volumes of immutable transactional records in real time. Generally speaking, blockchain is a distributed ledger that uses digitally encrypted keys to verify, secure and record details of each transaction conducted within an ecosystem. Unlike general blockchain-based systems, GreenBox uses proprietary, private ledger technology to verify every transaction conducted within the GreenBox ecosystem. The verification of transaction data comes from trusted partners, all of whom have been extensively vetted by us. GreenBox facilitates all financial elements of our closed-loop ecosystem and we act as the administrator for all related accounts. Using our TrustGateway technology, we seek authorization and settlement for each transaction from Gateways to the issuing bank responsible for the credit/debit card used in the transaction. When the Gateway settles the transaction, our TrustGateway technology composes a chain of blockchain instructions to our ledger manager system. When consumers use credit/debit cards to pay for transactions with merchants who use our ecosystem, the transaction starts with the consumer purchasing tokens from us. The issuance of tokens is accomplished when we load a virtual wallet with a token, which then transfers credits to the merchant’s wallet on a dollar for dollar basis, after which the merchant releases its goods or services to the consumer. These transfers take place instantaneously and seamlessly, allowing the transaction experience to seem like any other ordinary credit/debit card transaction to the consumer and merchant. While our blockchain ledger records transaction details instantaneously, the final cash settlement of each transaction can take days to weeks, depending upon contract terms between us and the gateways we use, between us and our ISOs, and between us and/or our ISOs and merchants who use our services. In the case where we have received transaction funds, but not yet paid a merchant or an ISO, we hold funds in either a trust account or as cash deemed restricted within our operating accounts. We record the total of such funds as Cash due from gateways, net – a Current Asset. Of these funds, we record the sum balance due to Merchants and ISOs as Payment processing liabilities, net – a Current Liability. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 6. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: December 31, 2022 2021 Buildings, machinery and equipment $ 1,360,000 $ 1,301,405 Computers 231,072 134,982 Furniture and fixtures 149,090 108,715 Improvements 164,375 140,300 Vehicles, Machinery and Equipment 15,316 13,519 Total property and equipment 1,919,853 1,757,516 Less: accumulated depreciation (224,198 ) (82,632 ) Net property and equipment $ 1,695,655 $ 1,674,884 Depreciation expense was $141,566 and $123,805 for the years ended December 31, 2022 and 2021, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | 7. INTANGIBLE ASSETS As of December 31, 2022 intangible assets consisted of the following: As of December 31, 2022 Amortization Accumulated Net Period Cost Amortization Customer relationships – Northeast and Charge Savvy 5 years $ 5,820,195 $ (1,755,279 ) $ 4,064,916 Customer relationships – Transact Europe 3 years $ 1,266,781 $ (475,044 ) $ 791,737 Business technology/IP 5 years $ 2,674,815 $ (792.889 ) $ 1,881,962 Total intangible assets $ 9,761,791 $ (3,023,177 ) $ 6,738,614 Intangible assets with finite lives are amortized over the estimated periods benefitted on a straight- line basis. Amortization expense on intangible assets with finite lives for the 2022 financial year was $20,280,864 and is included in depreciation and amortization expense condensed consolidated statement of operations and comprehensive loss. This amortization expense included a $18,110,000 charge for the entire consideration paid. Amortization expense related to intangible assets for each of the next five fiscal years and thereafter is expected as follows: Year Ending December 31, Amount 2023 2,332,401 2024 1,857,356 2025 1,699,010 Thereafter 849,847 $ 6,738,614 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Goodwill Disclosure [Text Block] | 8. GOODWILL The Company performs its goodwill impairment test annually and evaluates goodwill when events or changes in circumstances indicate that its carrying value may not be recoverable. The Company goodwill assessment indicated no impairment for 2022. As of December 31, 2022 goodwill consisted of the following: December 31, 2022 December 31, 2021 Acquisition of Northeast $ 2,793,474 $ 2,793,474 Acquisition of ChargeSavvy 3,754,560 3,754,560 Acquisition of Transact Europe 20,204,590 - Total goodwill $ 26,752,624 $ 6,548,034 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 9. DEBT The Company’s Debt obligation at the end of 2022 consists of the following: As of December 31, 2022 2021 $100,000,000 8% Senior convertible note due November 3, 2024, (see below) $ 61,101,209 $ 58,655,178 $149,900 Economic Injury Disaster Loan (EIDL), interest rate of 3.75%, due June 1, 2050 146,426 149,900 $500,000 EIDL, interest rate of 3.75%, due May 8, 2050 486,934 500,000 Total debt 61,734,569 59,305,078 Current portion - - Net long term debt $ 61,734,569 $ 59,305,078 Senior Convertible Note A continuity of the Notes for the year ended December 31, 2022 is summarized as follows: Senior Convertible Notes Balance, December 31, 2020 $ - Convertible debentures issued 100,000,000 Derivative liability (21,580,000 ) Original Issue Discount of 16% (16,000,000 ) Placement fees and issuance costs (7,200,000 ) Accretion expense 3,435,178 Balance, December 31, 2021 $ 58,655,178 Repayments (14,550,000 ) Accretion expense 16,996,031 Balance, December 31, 2022 $ 61,101,209 Derivative liability The Notes contain embedded derivatives representing the conversion features, redemption rights, and certain events of default. The Company determined that these embedded derivative required bifurcation and separate valuation. The Company utilizes a binomial lattice model to value its bifurcated derivatives included in the Notes. ASC 815 does not permit an issuer to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation and liability classification as derivative financial instruments. Rather, such terms and features must be combined together and fair valued as a single, compound embedded derivative. The Company selected a binomial lattice model to value the compound embedded derivative because it believes this technique is reflective of all significant assumptions that market participants would likely consider in negotiating the transfer of the Notes. Such assumptions include, among other inputs, stock price volatility, risk-free rates, credit risk assumptions, early redemption and conversion assumptions, and the potential for future adjustment of the conversion price due to triggering events. Additionally, there are other embedded features of the Notes requiring bifurcation, other than the conversion features, which had no value at December 31, 2020 due to management’s estimates of the likelihood of certain events, but that may have value in the future should those estimates change. A continuity of derivative liability for the year ended December 31, 2022 is summarized as follows: Total Balance, December 1, 2020 $ - Derivative liability on convertible debentures 21,580,000 Change in fair value 2021 (2,845,000 ) Balance, December 31, 2021 $ 18,735,000 Change in fair value 2022 (18,480,021 ) Balance, December 31, 2022 $ 254,979 The Company sold and issued, in a registered direct offering, an 8% senior convertible note due November 3, 2023, and subsequently extended to November 5, 2024, in the aggregate original principal amount of $100 million (the “Note”). The Note had an original issue discount of sixteen percent (16%) resulting in gross proceeds of $84 million. The Note was sold pursuant to the terms of a Securities Purchase Agreement, dated November 2, 2021 (the “SPA”), between The Company and the investor in the Note (the “Investor”). The Note was issued on November 8, 2021, pursuant to an indenture dated November 2, 2021 between the Company and Wilmington Savings Fund Society, FSB, as trustee (the “Base Indenture”), as supplemented by a first supplemental indenture thereto, dated November 2, 2021, relating to the Notes (the “First Supplemental Indenture” and, the Base Indenture as supplemented by the First Supplemental Indenture, the “First Indenture”). The terms of the Note include those provided in the First Indenture and those made part of the First Indenture by reference to the Trust Indenture Act. Ranking The Note is the senior unsecured obligations of the Company and not the financial obligations of our subsidiaries. Until such date as the principal amount of the Note is $5 million or less, all payments due under the Note will be senior to all other indebtedness of the Company and/or any of our subsidiaries. Maturity Date Unless earlier converted, or redeemed, the Note, as amended, will mature on November 5, 2024, the third anniversary of their issuance date, which we refer to herein as the “Maturity Date”, subject to the right of the investors to extend the date: (i) if an event of default under the Note has occurred and is continuing (or any event shall have occurred and be continuing that with the passage of time and the failure to cure would result in an event of default under the Note) and (ii) for a period of 20 business days after the consummation of a fundamental transaction if certain events occur. We are required to pay, on the Maturity Date, all outstanding principal, accrued and unpaid interest and accrued and unpaid late charges on such principal and interest, if any. Interest The Note bears interest at the rate of 8% per annum (a) shall commence accruing on the date of issuance, (b) shall be computed on the basis of a 360-day year and twelve 30- day months and (c) shall be payable in cash quarterly in arrears on the first trading day of each calendar quarter or otherwise in accordance with the terms of the Note. If a holder elects to convert or redeem all or any portion of a Note prior to the Maturity Date, all accrued and unpaid interest on the amount being converted or redeemed will also be payable. If we elect to redeem all or any portion of a Note prior to the Maturity Date, all accrued and unpaid interest on the amount being redeemed will also be payable. The interest rate of the Note will automatically increase to 15% per annum upon the occurrence and continuance of an event of default (See “-- Events of Default” below). Late Charges We are required to pay a late charge of 15% on any amount of principal or other amounts that are not paid when due. Conversion Fixed Conversions at Option of Holder The holder of the Note may convert all, or any part, of the outstanding principal and interest of the Note, at any time at such holder’s option, into shares of our common stock at an initial fixed conversion price, which is subject to: ● proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination and/or similar transactions; and ● full-ratchet adjustment in connection a subsequent offering at a per share price less than the fixed conversion price then in effect. On January 28, 2022, we and the Investor, entered into an Agreement and Waiver (the “Waiver”) with regard to the Note that has the following major provisions: a) the Investor agreed to extend the “90 Day Eligibility Date” from February 3, 2022 to May 2, 2022 such that the Investor can no longer, if the closing price of the stock is less than $5.50, convert up to $30 million of the Note into shares of the Company’s common stock (with the conversion price being the lower of (i) the then in effect conversion price and (ii) the greater of (x) the Note’s $1.67 floor price or (y) 98% of the market price on the conversion date) (the “Alternate Optional Conversion Price”) prior to May 2, 2022; b) allows us to acquire, for cancellation, $6 million in in aggregate principal amount of the Note for a purchase price of $6.9 million such that the new principal amount of the Note is $94 million; c) lowers the initial fixed conversion price of the Note from $15 to $12; and d) if the trading volume of our common stock on any individual trading day is over $5 million (the “Alternate Conversion Company Waiver Measuring Date”), allows the Investor an opportunity to convert up to $5 million of the Note into shares of our common stock from the Alternate Conversion Company Waiver Measuring Date through and including 7:00 PM ET on the immediately following trading day. The conversion price would be the lower of (i) the then in effect conversion price and (ii) the greater of (x) the Note’s $1.67 floor price or (y) 98% of the market price on the conversion date. The Company paid the investor 6.0 million, $5.0 million and $3.6 million in principal in the first three quarters of 2022, respectively. Consisting of $12.2 million in cash and $2.4 million in interest, consisting of shares of company stock. The foregoing description of the Waiver does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Waiver, a copy of which is attached hereto as Exhibit 10.9 and incorporated herein by reference. 1- Year Alternate Optional Conversion At any time following the first anniversary of the issuance date of the Note, but only if the closing bid price of our common stock on the immediately prior trading day is less than $6.50, each holder of the Note shall have the option to convert, at such holder’s option, pro rata, up to $30 million of the principal amount of the Note (in $250,000 increments) at the Alternate Optional Conversion Price. Alternate Event of Default Optional Conversion If an event of default has occurred under the Note, each holder may alternatively elect to convert the Note (subject to an additional 15% redemption premium) at the “Alternate Event of Default Conversion Price” equal to the lesser of: ● the fixed conversion price then in effect; and the greater of: ● the floor price; and ● 80% of the lowest volume weighted average price of our common stock during the five trading days immediately prior to such conversion. Beneficial Ownership Limitation The Note may not be converted and shares of common stock may not be issued under the Note if, after giving effect to the conversion or issuance, the applicable holder of the Note (together with its affiliates, if any) would beneficially own in excess of 4.99% of the Company’s outstanding shares of common stock, which is referred to herein as the “Note Blocker”. The Note Blocker may be raised or lowered to any other percentage not in excess of 9.99% at the option of the applicable holder of Notes, except that any raise will only be effective upon 61-days’ prior notice to us. Clarification to First Quarter Adjustment to Fixed Conversion Price The Company wishes to clarify the possible first quarter adjustment to the Note’s initial fixed conversion price (which was originally $15 and is now, pursuant to the Waiver, $12). If, during the fiscal quarter ending March 31, 2022, the Company (i) fails to process at least $750 million in transaction volume or (ii) has revenue that is less than $12 million, and, if the Note’s fixed conversion price then in effect is greater than the greater of (x) the Note’s $1.67 floor price floor and (y) 140% of the market price as of April 1, 2022 (the “Adjustment Measuring Price”) then, on April 1, 2022, the fixed conversion price will automatically adjust to the Adjustment Measuring Price. Change of Control Redemption Right In connection with a change of control of the Company, each holder may require us to redeem in cash all, or any portion, of the Notes at a 15% redemption premium to the greater of the face value, the equity value of our common stock underlying the Notes and the equity value of the change of control consideration payable to the holder of our common stock underlying the Notes. The equity value of our common stock underlying the Notes is calculated using the greatest closing sale price of our common stock during the period immediately preceding the consummation or the public announcement of the change of control and ending the date the holder gives notice of such redemption. The equity value of the change of control consideration payable to the holder of our common stock underlying the Notes is calculated using the aggregate cash consideration per share of our common stock to be paid to the holders of our common stock upon the change of control. Events of Default Under the terms of the first supplemental indenture, the events of default contained in the base indenture shall not apply to the Notes. Rather, the Notes contain standard and customary events of default including but not limited: (i) the suspension from trading or the failure to list our common stock within certain time periods; (ii) failure to make payments when due under the Notes; and (iii) bankruptcy or insolvency of the Company. If an event of default occurs, each holder may require us to redeem all or any portion of the Notes (including all accrued and unpaid interest and late charges thereon), in cash, at a 15% redemption premium to the greater of the face value and the equity value of our common stock underlying the Notes The equity value of our common stock underlying the Notes is calculated using the greatest closing sale price of our common stock on any trading day immediately preceding such event of default and the date we make the entire payment required. Company Optional Redemption Rights At any time no event of default exits, we may redeem all, but not less than all, the Notes outstanding in cash all, or any portion, of the Notes at a 5% redemption premium to the greater of the face value and the equity value of our common stock underlying the Notes The equity value of the Company’s common stock underlying the Notes is calculated using the greatest closing sale price of our common stock on any trading day during the period commencing on the date immediately preceding such date we notify the applicable holder of such redemption election and the date we make the entire payment required. The foregoing description of the Note does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Note, a copy of which is attached hereto as Exhibit 4.3, and incorporated herein by reference. Kingswood Capital (Syndicate Convertible Note) - $3,850,000 On October 27, 2020, the Company issued a convertible promissory note for $3,850,000 to various lenders through its placement agent, Kingswood Capital (“Kingswood Note”), due July 27, 2021 (the “Maturity Date”) with conversion price to common stock of $1.98 per share. The Kingswood Note included an original issue discount of $350,000, netting the balance received by the Company from Kingswood Note at $3,500,000. The Company also issued warrants for 1,944,444 shares with a fixed exercise price to common stock of $1.98 per share under the Kingswood Note. The Company valued the warrants using the Black-Scholes valuation method which amounted to $3,498,667 and recorded as a debt discount at the time of issuance of warrant. The Kingswood Note was settled in the first quarter of 2021. The Company issued 1,944,416 shares to settle the debt and another 1,884,418 shares to settle the warrants. The Company received $3.7 million upon the settlement of the warrants. SBA CARES Act Loans - $649,900 On June 9, 2020, the Company entered into a 30 year loan agreement with the SBA under the CARES Act in the amount of $149,900. The loan bears interest at 3.75% per annum and requires monthly principal and interest payments of $731 beginning June 9, 2021. Both the Chief Executive Officer and Chairman of the Company signed personal guarantees under this loan. On May 8, 2020, Charge Savvy executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the TNB’s business. As of December 31, 2020, the loan payable, Emergency Injury Disaster Loan noted above is not in default. Pursuant to that certain Loan Authorization and Agreement (the “SBA Loan Agreement”), Charge Savvy borrowed an aggregate principal amount of the EIDL Loan of $150,000, with proceeds to be used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue only on funds actually advanced from the date of each advance. Installment payments, including principal and interest, are due monthly beginning May 8, 2021 (twelve months from the date of the SBA Loan) in the amount of $731. The balance of principal and interest is payable thirty years from the date of the SBA Loan. In connection therewith, the Company also received a $10,000 grant, which does not have to be repaid. During the year ended December 31, 2020, $10,000 was recorded in Economy injury disaster loan (EIDL) grant income in the Statements of Operations. On Aug 24, 2021, Charge Savvy was granted an increase in loan principal in the amount of $350,000 on identical terms. In connection therewith, Charge Savvy executed (i) loans for the benefit of the SBA (the “SBA Loan”), which contains customary events of default and (ii) Security Agreements, granting the SBA a security interest in all tangible and intangible personal property of Charge Savvy, which also contains customary events of default (the “SBA Security Agreement”). Preferred Bank - Paycheck Protection Program CARES Act - $272,713 On April 29, 2020, the Company entered into a loan agreement with Preferred Bank under Paycheck Protection Program administered by SBA in the amount of $272,713. Under this loan program, the loan may be forgiven if utilized for specific purpose specified under the CARES Act and PPP guideline. The loan bears interest of 1.00% per annum and matures on April 29, 2022.The loan was forgiven on November 8, 2021. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 10. INCOME TAXES The components of the provision for income taxes are as follows: Years Ended December 31, 2022 2021 Current: (as restated) Federal - - State 39,758 4,906 International - - Current income tax expense (benefit) 39,758 4,906 Deferred Federal - - State - - International (48,461 ) - Deferred income tax expense (benefit) (48,461 ) - Total tax expense Federal - - State 39,758 4,906 International (48,461 ) - Total (8,703 ) 4,906 Taxes on income vary from the statutory federal income tax rate applied to earnings before tax on income as follows: Years Ended December 31, 2022 2021 (as restated) Statutory federal income tax rate of 21% applied to earnings before income taxes and extraordinary items $ (10,341,324 ) $ (7,406,700 ) State taxes - net of federal benefit 31,409 3,876 Penalties (242 ) 265 Meals and entertainment 14,064 10,085 Transactions expenses 40,771 32,253 PPP loan grant income - (57,270 ) Derivative expense - 721,387 Gift 3,477 Stock compensation(ISOs) - 487,294 Changes in FV of derivative liability (3,539,988 ) (597,450 ) Derecognition expense on conversion of convertible debt 1,199,031 - Stock compensation(NQ) - - Valuation allowance 12,328,573 6,335,905 Other, net 116,143 475,261 Foreign rate difference 139,383 - $ (8,703 ) $ 4,906 Deferred income tax assets and liabilities arising from differences between accounting for financial statement purposes and tax purposes, less valuation reserves at year end are as follows: Years Ended December 31, 2022 2021 (as restated) State taxes - prior year 4,022 1,030 Intangible assets 5,379,522 83,066 Allowance for credit losses 6,169,148 4,024,538 Stock compensation - 329,072 Capitalization of research and development Under Sec 174 1,120,728 - Lease liability - 364,147 Contingent liability 130,503 118,922 Charitable contributions carryforward 141 - Lease liability 270,374 - Net operating loss carryover 12,488,907 5,554,376 Total deferred tax assets 25,563,345 10,475,151 Deferred tax liabilities: Fixed assets (5,383 ) (3,055 ) Goodwill Tier 1 (103,613 ) (24,806 ) Intangible assets (78,217 ) - Right of use assets (250,111 ) (354,426 ) Total deferred tax liabilities (437,324 ) (382,287 ) Net deferred tax assets, non-current prior to valuation allowance 25,126,021 10,092,864 Valuation allowance (25,204,238 ) (10,092,864 ) Total net deferred taxes $ (78,217 ) $ - The Company uses the liability method of accounting for income taxes as set forth in ASC 740. Under the liability method, deferred taxes are determined based on differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. As of December 31, 2022, the Company had federal and State Net Operating Loss Carryforwards (“NOL”) of $50.0 million and $25.8 million, respectively. Federal net operating loss arising in tax years ending after December 31, 2017 will be carried forward indefinitely. The Company does not have pre-tax reform federal net operating loss carryforwards as of December 31, 2021. Net operating loss carryforwards arising tax years ending after December 31, 2017, is $50.0 million. The state net operating loss carryforwards will begin to expire in 2038. The following table shows the characteristics of Net Operating Loss Carryover amounts: Total NOL Pre-2017 Post 2017 Federal $ 49,977,661 $ - $ 49,977,661 State 25,760,588 - 25,760,588 International - - - As of December 31, 2022 and 2021, the Company maintained full valuation allowance for net operating loss carryforward deferred tax asset. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The amount of the deferred tax asset considered realizable, however, could be reduced if estimates of future taxable income are reduced. The Company files a consolidated federal income tax return and files tax returns in various state and local jurisdictions. The statutes of limitations for its consolidated federal income tax returns are open for years 2019 and thereafter, and state and local income tax returns are open for years 2018 and thereafter. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. For the tax year ended December 31, 2022 and 2021 the Company recognized no interest or penalties. |
STOCK OPTIONS AND AWARDS
STOCK OPTIONS AND AWARDS | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Equity [Text Block] | 11. STOCK OPTIONS AND AWARDS The Company applies the provisions of ASC 718, “Compensation - Stock Compensation,” using a modified prospective application, and the Black-Scholes model to value stock options. Under this application, the Company records compensation expense for all awards granted. Compensation costs will be recognized over the period that an employee provides service in exchange for the award. The Company adopted the 2020 Incentive and Non-statutory Stock Option Plan (“2020 Plan”) in June 2020, which provides for the grant of incentive stock options and nonqualified stock options to employees and directors. The 2020 Plan provides for up to 3.3 million shares of common stock. Options granted under the 2020 Plan generally have a term of five years and generally vest and become exercisable at various times from the option grant dates. These options will have such vesting or other provisions as may be established by the Board of Directors at the time of each grant. The Company adopted the 2021 Incentive and Non-statutory Stock Option Plan (“2021 Plan”) in April 2021, which provides for the grant of incentive stock options and nonqualified stock options to employees, directors and consultants. The 2021 Plan provides for up to 5.0 million shares of common stock. Options granted under the 2021 Plan shall have a term of five to ten years and generally vest and become exercisable at various times from the option grant dates. These options will have such vesting or other provisions as may be established by the Board of Directors at the time of each grant. The fair value of each share option award on the date of grant was estimated using the Black-Scholes method based on the following weighted-average assumptions: Year Ended December 31, 2022 2021 Risk free interest rate 2.70 % 0.29 % Expected term (years) 5.0 5.0 Expected volatility 93.2 % 555.8 % Expected dividend yield 0 % 0 % The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the option award; the expected term represents the weighted-average period of time that option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based upon the Company’s dividend rate at the time fair value is measured and future expectations. The Company recorded $2,370,826 and $1,759,164 of stock compensation expense for the years ended December 31, 2022 and 2021, respectively, related to the 2021 and 2020 Plans. The following table represents the employee stock option activity during the years ended December 31, 2022 and 2021. Shares Weighted Average Exercise Price Outstanding at December 31, 2020 477,430 $ 3.53 Exercisable at December 31, 2020 467,247 3.47 Granted 132,288 6.87 Exercised (117,297 ) 0.5 Forfeited or Expired (100,858 ) 7.62 Outstanding at December 31, 2021 391,563 5.07 Exercisable at December 31, 2021 377,039 4.8 Vested and Expected to Vest at December 31, 2021 391,563 $ 5.07 Granted 36,822 3.66 Exercised (12,417 ) 0.42 Forfeited or Expired (93,573 ) 6.72 Outstanding at December 31, 2021 322,395 4.29 Exercisable at December 31, 2021 - - Vested and Expected to Vest at December 31, 2022 319,627 $ 4.29 As of December 31, 2022 and 2021, there was unrecognized compensation cost related to non-vested stock options granted in the amount of $173,433 and $40,797, respectively. The Company adopted the 2021 Restricted Stock Plan (“2021 Plan”) in November 2021, which provides for the grant of restricted stock awards and performance stock awards to executive officers, non-employee directors and other key employees of the Company. The 2021 Plan provides for up to 5.0 million shares of common stock. the 2020 Plan generally have a term of five years and generally vest and become exercisable at various times from the option grant dates. These award will have such vesting or other provisions as may be established by the Board of Directors at the time of each award. A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2022 is presented below: Non-vested Restricted Stock Awards Weighted Average Grant Date Fair Value Non-vested at January 1, 2021 - Granted 359,226 $ 4.95 Vested (359,226 ) 4.95 Forfeited - - Non-vested at December 31, 2021 - - Granted 1,282,578 $ 1.67 Vested (563,218 ) 3.56 Forfeited (52,083 ) 2.12 Non-vested at December 31, 2022 667,277 $ 1.20 Total stock-based compensation expense recognized for the Company’s 2021 Plan was $1,776,750 for the year ended December 31, 2022. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block [Abstract] | |
Lessor, Operating Leases [Text Block] | 12. LEASES For operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the incremental borrowing rate, in accordance with ASC 842, Leases. The Company leases office space at four locations in California, Florida and Massachusetts. The components of lease expense are as follows: Year Ended December 31, 2022 2021 Operating lease expense $ 141,212 $ 433,025 Amortization of right-of-use assets 670,535 39,757 Total lease expense $ 811,747 $ 472,782 Payments for the year ended December 31, Total 2023 $ 671,630 2024 462,452 2025 350,422 2026 248,605 2027 42,463 Thereafter - Total undiscounted cash flows 1,775,572 Discounted (present value): Lease liabilities - current 533,601 Lease liabilities - long-term 1,108,665 Total lease liabilities $ 1,642,267 Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the lease commencement date. As of December 31, 2022, the weighted average remaining lease term is 3.19 years and the weighted average discount rate used to determine the operating lease liabilities is 10.0%. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 13. RELATED PARTY TRANSACTIONS The Company had the following related party transactions: ● Kenneth Haller and the Haller Companies Kenneth Haller (“Haller”) became the Company’s Senior Vice President of Payment Systems in November 2018. The Company began working indirectly with Haller earlier in 2018, both individually and through our relationship with MTrac Tech Corporation (“MTrac”), which in turn has business relationships with Haller. Haller brings considerable advantages to the Company’s platform development and business development efforts and capabilities, including transactional business relations and a large network of agents (the “Haller Network”). The Haller Network is an amalgamation of the collective networks of Haller and two companies owned or majority-owned by Haller, which are Sky Financial & Intelligence, LLC (“Sky”), and Charge Savvy, LLC (collectively, the “Haller Companies”), each of which has formalized business relationships with the Company, as well as with some of the Company’s partners, which the Company believes allows the Company to maximize and diversity the Company’s market penetration capabilities. Haller, through Sky, owns controlling interests in Charge Savvy, LLC with whom the Company does business through their respective business relationship with MTrac. The following are certain transactions between the Company and the Haller Companies: Sky Financial & Intelligence, LLC – Haller owns 100% of Sky Financial & Intelligence LLC (“Sky”), a Wyoming limited liability company, and serves as its sole Managing Member. Sky is a strategic merchant services company that focuses on high risk merchants and international credit card processing solutions. In 2018, Sky was using GreenBox’s QuickCard payment system as its main payment processing infrastructure, through Sky’s relationship with MTrac. It was through this successful relationship, that we came to know Haller and the Haller Network. Realizing that the Haller Network and Haller’s unique skill set was highly complementary to our business objectives, we commenced discussions to retain Haller through his consulting firm, Sky, for a senior role, directly responsible for growing GreenBox’s operations. Subsequently, in November 2018, Haller was appointed as our Senior Vice President of Payment Systems, for a monthly consulting fee of $10,000, paid to Sky (“Haller Consulting Fee”). The Company did not pay any commissions to the related parties mentioned above for the years ended December 31, 2022 and 2021. Mr. Haller left the Company in March 2022. The Company recognized net revenue of $13,130,482 from outside third-party merchants through independent sales organization (ISO), Sky, for the year ended December 31, 2012. The Company had accounts receivables of $6,540,027 from outside third-party merchants through Sky. The Company did not record any revenue from Sky in 2022. Charge Savvy, LLC – Sky owns 68.4% of Charge Savvy, LLC (“Charge Savvy”), an Illinois limited liability company. Haller serves as one of three Managing Members of Charge Savvy, along with Higher Ground Capital, LLC (owns 14%), and Jeff Nickel (owns 17.4%). As a result of the Purchase Agreement, the Company purchased all of Charge Savvy’s issued and outstanding membership interests and Charge Savvy became a wholly owned subsidiary of the Company. The purchase price under the Purchase Agreement for the all-stock transaction consisted of 1,000,000 shares of Common Stock being issued and delivered to the Sellers in proportion to the Sellers’ share of their membership interests in Charge Savvy. The share price at issuance was $12.14. PrivCo The Company repurchased, in two separate repurchase transactions each consisting of 1 million shares of common stock, an aggregate of 2 million shares owned by PrivCo (an entity controlled by Messrs. Errez and Nisan). In October 2022, the Board unanimously ratified these two repurchase transactions between the Company and PrivCo. The Company repurchased 1,000,000 shares for a price per share of $5.59 (for total proceeds to PrivCo of $5,590,000) (the “First Repurchase”) and 1,000,000 shares for a price per share of $0.82 (for total proceeds to PrivCo of $820,000) (the “Second Repurchase”). The First Repurchase was based on the closing price of the common stock on November 24, 2021 and took place over a number of months starting in February 2022 and ending in October 2022. The Second Repurchase was based on the closing price of the common stock on July 29, 2022 and took place in October 2022. The purpose of each of these transactions was to allow the Company to issue shares to new shareholders without increasing the Company’s shares outstanding. Family Relationships The Company employs two of our CEO’s brothers, Dan and Liron Nusonivich, who are paid approximately $200,000 and $110,000 per year, respectively. There are no family relationships between any of other directors or executive officers and any other employees or directors or executive officers. The Company did not pay any commissions to the related parties mentioned above for the years ended December 31, 2021 and 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 14. COMMITMENTS AND CONTINGENCIES From time-to-time, the Company is involved in a number of legal proceedings. The Company records a liability for those legal proceedings when it determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred. From time to time, the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders. This is a summary of our current outstanding litigation: ● Corporate Performance Consulting, LLC (CPC) v. GreenBox POS – On April 7, 2021, CPC filed a complaint against RYVYL Inc. in San Diego Superior Court. Plaintiff CPC alleges breach of contract, breach of implied covenant of good faith and fair dealing, goods and services rendered, negligent misrepresentation, violation of CA Business and Professions Code Section 17200, and unjust enrichment. The crux of CPC’s claim is that RYVYL Inc. failed to compensate for certain consulting and corporate advisory services. RYVYL Inc. believes the claims are without merit and intends to defend itself vigorously. On June 17, 2021 RYVYL Inc. filed a Cross-Complaint for breach of contract, breach of implied covenant of good faith and fair dealing, negligent misrepresentation, unjust enrichment, and rescission. The parties attended mediation on December 15, 2022 and subsequently entered into a confidential settlement agreement. The parties have executed a request for dismissal with prejudice to be filed with the Court. ● The Good People Farms, LLC (TGPF) - TGPF initiated an arbitration in AAA on or about April 20, 2020 against RYVYL Inc., Fredi Nisan, Ben Errez, MTrac Tech., Vanessa Luna, and Jason LeBlanc. The matter was placed in abeyance for some time. On January 15, 2021 RYVYL Inc. filed a counter-claim for fraud - intentional misrepresentation, breach of contract, breach of covenant of good faith and fair dealing, violation of California Business and Professions Code Section 17200, and accounting. The arbitration was stayed pending further proceedings in the separate but related action filed by MTrac and Ms. Luna in San Diego Superior Court. The arbitration re-commenced upon the state court's January 14, 2022 order denying MTrac's and Ms. Luna's motion for summary judgment and granting of The Good People Farm's motion to compel arbitration as to MTrac only. TGPF submitted a new statement of claim of June 21, 2022; the individual named as respondents in the original arbitration demand have been removed. Final arbitration hearings are set for April 18-21, 2023. ● Pure Health, et al. v. Worldpay LLC et al - On February 18, 2022 forty-three online marketer Plaintiffs filed suit in the Court of Common Pleas, Hamilton County, Ohio against Worldpay LLC (formerly Vantiv LLC), Fifth Third Bank, ChargeSavvy LLC, a wholly owned subsidiary of RYVYL Inc., RYVYL Inc., and John Does 1 (Defendants) through 10, alleging breach of contract, breach of implied covenant of good faith and fair dealing, conversion, and money had and received (constructive trust). Defendant RYVYL Inc. believes that Plaintiffs’ claims against it are without merit and plans to pursue all judicial remedies necessary to resolve this matter. The parties have settled the matter and executed a request for dismissal with prejudice to be filed with the Court. ● On April 27, 2022, Paul Levine (“Levine”), former Chief Executive Officer of Coyni, Inc., wholly-owned subsidiary of RYVYL Inc., filed a charge with The Occupational Safety and Health Administration (“OSHA”) against respondents Coyni and RYVYL Inc. Levine alleges retaliation in violation of the Sarbanes-Oxley Act of 2022, as amended, 18 U.S.C. §1514A (“SOX”). The OSHA claim was withdrawn on or around April 3, 2023. ● On November 8, 2022, RYVYL Inc. filed a complaint against its former COO, Luna Consultant Group, LLC and John Does 1 through 50 in San Diego Superior Court. RYVYL is alleging misappropriation of trade secrets, breach of fiduciary duty, and conversion among other causes of action. The parties are currently in the discovery phase. ● On November 10, 2022, Vanessa Luna, former COO of RYVYL Inc., filed a complaint against RYVYL and Fredi Nisan. Luna alleges breach of contract, unjust enrichment, promissory estoppel, harassment, retaliation and wrong termination, and fraud among other claims. Luna is seeking damages including compensatory damages, unpaid wages (past and future), loss of wages and benefits (past and future), expectation damages, and other damages to be proven at trial. The Company denies all allegations. Investigation is ongoing. As the Company cannot predict the outcome of the matter the probability of an outcome cannot be determined. The Company intends to vigorously defend against all claims. The parties are currently in the discovery phase. ● On December 12, 2022, Jacqueline Dollar (aka Jacqueline Reynolds), former CMO of RYVYL Inc. filed a complaint against RYVYL Inc. fka Greenbox POS, Inc., Fredi Nisan, and DOES 1-20 alleging sex discrimination in violation of FEHA, failure to prevent discrimination in violation of FEHA, IIED, NIED, and negligent supervision/negligent retention. Ms. Dollar is seeking an unspecified amount of damages related to, among other things, payment of past and future lost wages, stock issuances, bonuses and benefits, compensatory damages, and general, economic, non-economic, and special damages. As the Company cannot predict the outcome of the matter the probability of an outcome cannot be determined. The Company intends to vigorously defend against all claims. ● On February 1, 2023 a purported class action lawsuit titled Cullen V. RYVYL Inc. fka Greenbox POS, Inc., et al., Case No. 3:23-cv-00185-GPC-AGS, was filed in the United States District Court for the Southern District of California against the company and certain of our current and former directors and officers (the “Defendants”). The complaint was filed on behalf of persons who purchased or otherwise acquired the Company’s publicly traded securities between January 29, 2021 and January 20, 2023, (the “Class Action”). The complaint generally alleges that the Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making false and misleading statements regarding the Company’s financial performance and prospects. The action includes claims for damages, including interest, and an award of reasonable costs and attorneys’ fees and expert fees to the putative class. As the Company cannot predict the outcome of the matter the probability of an outcome cannot be determined. The Company intends to vigorously defend against all claims. This is a summary of our current commitments with respect to pending acquisitions: ● In November 2021, the Company executed a term sheet in November 2021 to acquire the ACH business of Merchant Payment Solutions LLC. The parties expect they will execute a definitive agreement and hold the transaction closing on or about December 3, 2021. The Company made the first payment toward to the two tranches per the term sheet of $725,000. As of December 31, 2022, and as of April 17, 2023, the status of the purchase agreement is still in negotiation and further due diligence. ● On July 27, 2022, the Company signed a letter of intent to acquire Fundstr UAB for their foreign exchange conversion and international payment capabilities and made a deposit payment of 685,000 euros. As of December 31, 2022, and as of April 17, 2023, the company is conducting acquisition due diligence to meet corporate governance requirements. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 15. SEGMENT REPORTING The Company has organized its operations into two segments: North America, and International. These segments reflect the way the Company evaluates its business performance and manages its operations. Our chief operating decision maker is our chief executive officer. Management determined the operational data used by the chief operating decision maker is that of the two reportable segments. Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Management evaluates the performance of its segments and allocates resources to them based on operating income or (loss) as compared to prior periods and current performance levels. The reportable segment operational data is presented in the tables below (in thousands): Year Ended December 31, 2022 2021 Net revenue North America $ 28,613 $ 26,305 International 4,296 - $ 32,909 $ 26,305 December 31, 2022 2021 Long-lived assets, net North America $ 5,893 $ 7,579 International 846 - $ 6,739 $ 7,579 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 16. SUBSEQUENT EVENTS The Company follows the guidance in FASB ASC Topic 855, Subsequent Events (“ASC 855”), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. ASC 855 sets forth (i) the period after the balance sheet date during which management of a reporting entity evaluates events or transactions that may occur for potential recognition or disclosure in the consolidated financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its consolidated financial statements, and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. Accordingly, the Company did not have any subsequent events that require disclosure other than the following: ● On June 30, 2022, RYVYL EU entered into a purchase agreement to acquire Roark Holdings, Ltd, a United Kingdom based licensed payment institution, in an all-cash transaction for 1,000,000 pounds, of which 685,000 pounds were paid to the seller and the remaining amount will be due at the change of control. Roark Holdings T/A Paysos.com is a respected UK payment institution which allows the licensor to process debit and credit card payments, in addition to local payments within the UK. The Company submitted a request for change of control with the UK Financial Conduct Authority (FCA) but chose to withdraw the change of control application due to unforeseen complication on the part of the Roark Holdings, Ltd in March 2023. The FCA has granted the Company a relief period until December 31, 2023 to maintain compliance status. The Company expects to retrieve the already made to the seller and will seek other means to comply with the UK processing regulations. ● On March 28, 2023, the Company’s subsidiary Charge Savvy executed an agreement to sell and subsequent leaseback of its property located at 3333 East End Avenue, South Chicago Heights, Illinois (the “Property”), owned by its subsidiary, Charge Savvy LLC (“CS”). The sales price is Two Million Seven Hundred Thousand Dollars ($2,700,000) with an anticipated closing by June 7, 2023. The initial term of the leaseback is five (5) years, with an option to terminate early without penalty after conclusion of the second year. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with the 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. |
Reclassification, Comparability Adjustment [Policy Text Block] | Reclassification Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flows. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Cash, Cash Equivalents and Restricted Cash The Company’s cash, cash equivalent and Restricted cash represents the following: ● Cash and cash equivalents ● Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. 2022 2021 Cash and cash equivalents $ 13,960,887 $ 89,045,202 Restricted cash 26,872,835 514,493 $ 40,833,722 $ 89,559,695 |
Receivable [Policy Text Block] | Cash Due from Gateways and Payment Processing Liabilities The Company’s primary source of revenues continues to be payment processing services for its merchant clients. When such merchant makes a sale, the process of receiving the payment card information, engaging the banks for transferring the proceeds to the merchant’s account via digital gateways, and recording the transaction on a blockchain ledger are the activities for which the Company gets to collect fees. In 2022 and 2021 the Company utilized several gateways. The gateways have strict guidelines pertaining to scheduling of the release of funds to merchants based on several criteria, such as return and chargeback history, associated risk for the specific business vertical, average transaction amount and so on. In order to mitigate processing risks, these policies determine reserve requirements and payment in arear strategy. While reserve and payment in arrears restrictions are in effect for a merchant payout, the Company records gateway debt against these amounts until released. Therefore, the total gateway balances reflected in the Company’s books represent the amount owed to the Company for processing – these are funds from transactions processed and not yet distributed. |
Revenue [Policy Text Block] | Revenue Recognition Revenue is recognized upon transfer of control of promised goods or services to the Company’s customers or when the Company satisfies any performance obligations under contract. The amount of revenue reflects the consideration the Company expects to be entitled to in exchange for the respective goods or services provided. Further, under Accounting Standards Codification 606, “Revenue from Contracts with Customers”, (“ASC 606”), contract assets or contract liabilities that arise from past performance but require a further performance before the obligation can be fully satisfied must be identified and recorded on the balance sheet until respective settlements have been met. The Company’s primary revenue source is generated from payment processing services. Payment processing services revenue is based on a percentage of each transaction’s value and/or upon fixed amounts specified per each transaction or service and is recognized as such transactions or services are performed, at a point in time. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Accounts Receivable and Allowance for Credit Losses The Company maintains an allowance for credit losses for estimated losses from the inability of gateways to make required payments. The allowance for credit losses is evaluated periodically based on the aging of accounts receivable, the operational relationship with gateways and their payment history, historical charge-off experience and other assumptions, such as current assessment of economic conditions. |
Prepaid Expenses, Policy [Policy Text Block] | Prepaid Expenses Prepaid expenses primarily consist of $6.9 million in deposits made with credit card companies iunder Transact Europe and the prepayment associated with other acquisitions. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets, which range from three to eight years. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company assesses the fair value of financial instruments based on the provisions of ASC 820, Fair Value Measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability between market participants on the measurement date. ASC 820 also establishes a hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1- Quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3- Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table describes the valuation techniques used to calculate the fair value for assets in Level 3. The significant unobservable input used in the fair value measurement of the Company’s identifiable intangible assets is the discount rate. The change in this input could result in a change of fair value measurement: The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10: Fair Value at December 31, 2022 Customer Relationships $ 4,856,653 Business intellectual properties 1,881,962 Derivative Liability $ 254,979 Fair Value at December 31, 2021 Customer Relationship $ 5,820,195 Business Technology/IP 2,611,088 Derivative liability $ 18,735,000 |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill and Other Intangible Assets The Company accounts for acquisitions of businesses in accordance with the acquisition method. Goodwill represents the excess of the purchase price of acquired businesses over the fair value of the identifiable assets acquired and liabilities assumed. Acquisition costs are expensed as incurred. Goodwill and other intangible assets acquired in a business combination determined to have an indefinite useful life are generally not amortized, but instead are tested for impairment at least annually and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. Other intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever management believes that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. To the extent that the carrying value is determined to be unrecoverable, an impairment loss is recognized through a charge to expense. As of December 31, 2022, other than a charge off of 100 percent of the consideration paid in connection with the contracted acquisition of the Sky Financial portfolio, the Company performed an impairment analysis on the other acquired goodwill and other long-lived assets and is of the view that their values are supportable and recoverable. |
Income Tax, Policy [Policy Text Block] | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As of December 31, 2021, we have no material unrecognized tax benefits. |
Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share A basic earnings per share is computed by dividing net income to common stockholders by the weighted average number of shares outstanding for the year. Dilutive earnings per share include the effect of any potentially dilutive debt or equity under the treasury stock method, if including such instruments is dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the years ended December 31, 2021 and 2020, as there are no potential shares outstanding that would have a dilutive effect. |
Lessee, Leases [Policy Text Block] | Leases On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statement of operations and statement of cash flows. ASC 842 supersedes nearly all existing lease accounting guidance under GAAP issued by the Financial Accounting Standards Board (“FASB”) including ASC Topic 840, Leases. For operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the IBR as of that date. |
Segment Reporting, Policy [Policy Text Block] | Segment Reporting The Company has organized its operations into two segments: North America, and International. These segments reflect the way the Company evaluates its business performance and manages its operations. During 2021, the Company operated in one reporting segment, since the International Segment was not introduced until 2022. Our chief operating decision maker is our chief executive officer. Management determined the operational data used by the chief operating decision maker is that of the two reportable segments. Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Management evaluates the performance of its segments and allocates resources to them based on operating income or (loss) as compared to prior periods and current performance levels. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Accounting Pronouncement Not Adopted In October 2021, the FASB issued ASU 2021-08, " Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers The FASB issued ASU 2020-06 (“Update”) to simplify the accounting for convertible instruments by eliminating large sections of the existing guidance in this area. It also eliminates several triggers for derivative accounting, including a requirement to settle certain contracts by delivering registered shares. These changes are intended to make GAAP easier to apply and, therefore, reduce the frequency of errors in this part of the literature. Early adoption is permitted for fiscal years beginning after December 15, 2020. For SEC filers, excluding smaller reporting companies, this Update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, this Update is effective for fiscal years beginning after December 15, 2023, including interim periods therein. The Company is evaluating the impact of this guidance on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”. The standard, including subsequently issued amendments (ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10 and ASU 2019-11), requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is evaluating the impact of this guidance on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents [Table Text Block] | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. 2022 2021 Cash and cash equivalents $ 13,960,887 $ 89,045,202 Restricted cash 26,872,835 514,493 $ 40,833,722 $ 89,559,695 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10: Fair Value at December 31, 2022 Customer Relationships $ 4,856,653 Business intellectual properties 1,881,962 Derivative Liability $ 254,979 Fair Value at December 31, 2021 Customer Relationship $ 5,820,195 Business Technology/IP 2,611,088 Derivative liability $ 18,735,000 |
RESTATEMENT OF CONSOLIDATED F_2
RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prior Period Adjustment [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | Balance Sheet (Unaudited) September 30, 2022 As previously reported Restatement impacts As restated Cash and cash equivalents $ 11,021 $ (4,074 ) $ 6,947 Restricted cash 26,607 4,009 30,616 Accounts receivable, net 790 - 790 Cash due from gateways, net 15,125 (8,896 ) 6,229 Prepaid and other current assets 14,568 (7,030 ) 7,537 Accounts payable 97 (116 ) (19 ) Other current liabilities, and accrued interest 1,416 1,717 3,133 Payment processing liabilities, net 22,593 2,320 24,913 Additional paid-in capital 99,618 781 100,399 Accumulated deficit (64,254 ) (19,502 ) (83,756 ) Shares to be returned - (888 ) (888 ) Treasury stock, at cost - (303 ) (303 ) Statement of Operations (Unaudited) Three Months Ended September 30, 2022 As previously reported Restatement impacts As restated Cost of revenue $ 4,270 $ 63 $ 4,333 Interest expense (1,907 ) 105 (1,802 ) Loss on settlement of debt - (2,395 ) (2,395 ) Merchant fines and penalty income - (368 ) (368 ) Loss before provision for income taxes (15,135 ) (714 ) (15,849 ) Net loss (15,170 ) (714 ) (15,884 ) Balance Sheet (Unaudited) June 30, 2022 As previously reported Restatement impacts As restated Cash and cash equivalents $ 29,099 $ (11,425 ) $ 17,674 Restricted cash 26,526 11,425 37,951 Accounts receivable, net 620 - 620 Cash due from gateways, net 14,271 (9,079 ) 5,192 Prepaid and other current assets 14,105 (6,275 ) 7,829 Accounts payable 1,348 (484 ) 864 Other current liabilities, and accrued interest 3,586 1,808 5,395 Payment processing liabilities, net 33,468 2,073 35,541 Convertible debt, net 59,408 (1,051 ) 58,358 Derivative liability 61 (61 ) - Additional paid-in capital 89,387 1,519 90,905 Accumulated deficit (49,084 ) (18,788 ) (67,872 ) Shares to be returned - (68 ) (68 ) Treasury stock, at cost - (303 ) (303 ) Statement of Operations (Unaudited) Three Months Ended June 30, 2022 As previously reported Restatement impacts As restated Cost of revenue $ 4,143 $ 87 $ 4,230 Interest expense (1,866 ) 83 (1,783 ) Loss on settlement of debt - (757 ) (757 ) Changes in fair value of derivative liability 26,374 61 26,435 Merchant fines and penalty income - 82 82 Other income (expense) 186 2,345 2,531 Income (loss) before provision for income taxes 10,333 1,681 12,014 Net income (loss) 10,410 1,681 12,091 Balance Sheet (Unaudited) March 31, 2022 As previously reported Restatement impacts As restated Cash and cash equivalents $ 27,594 $ (7,142 ) $ 20,452 Restricted cash 0 227 228 Accounts receivable, net 469 - 469 Cash due from gateways, net 20,807 (8,853 ) 11,955 Prepaid and other current assets 35,263 (6,275 ) 28,988 Goodwill 6,048 500 6,548 Accounts payable 1,069 (447 ) 622 Other current liabilities, and accrued interest 2,385 2,441 4,826 Payment processing liabilities, net 5,390 2,430 7,820 Convertible debt, net 58,826 (1,601 ) 57,225 Additional paid-in capital 90,983 (512 ) 90,470 Accumulated deficit (59,494 ) (20,686 ) (80,180 ) Shares to be returned - (2,863 ) (2,863 ) Treasury stock, at cost (8,171 ) (303 ) (8,473 ) Statement of Operations (Unaudited) Three Months Ended March 31, 2022 As previously reported Restatement impacts As restated Cost of revenue $ 2,564 $ 216 $ 2,780 General and administrative expenses 1,792 - 1,792 Interest expense (1,889 ) (1,941 ) (3,830 ) Loss on settlement of debt - (900 ) (900 ) Changes in fair value of derivative liability (7,700 ) - (7,700 ) Merchant fines and penalty income - - - Other income (expense) 49 (4,414 ) (4,364 ) Loss before provision for income taxes (21,236 ) (8,111 ) (29,347 ) Net loss (21,316 ) (8,111 ) (29,427 ) Balance Sheet December 31, 2021 As previously reported Restatement impacts As restated Cash and cash equivalents $ 89,560 $ (514 ) $ 89,045 Restricted cash - 514 514 Accounts receivable, net 482 - 482 Cash due from gateways, net 18,942 (12,732 ) 6,209 Prepaid and other current assets 6,421 (6,392 ) 29 Goodwill 6,048 500 6,548 Accounts payable 871 (402 ) 469 Other current liabilities, and accrued interest 1,727 500 2,227 Payment processing liabilities, net 4,998 (2,685 ) 2,313 Additional paid-in capital 88,574 6,174 94,748 Accumulated deficit (38,178 ) (12,359 ) (50,537 ) Shares to be returned - (9,852 ) (9,852 ) Treasury stock, at cost (4,934 ) - (4,934 ) Statement of Operations (Unaudited) Three Months Ended December 31, 2021 As previously reported Restatement impacts As restated Cost of revenue $ 4,074 $ (201 ) $ 3,873 General and administrative expenses 7,466 6,116 13,582 Merchant fines and penalty income - 75 75 Other income (expense) 271 (802 ) (530 ) Loss before provision for income taxes (10,284 ) (8,289 ) (18,573 ) Net loss (7,035 ) (8,289 ) (15,324 ) Balance Sheet (Unaudited) September 30, 2021 As previously reported Restatement impacts As restated Cash and cash equivalents $ 29,707 $ (305 ) $ 29,403 Restricted cash - 305 305 Accounts receivable, net 229 - 229 Cash due from gateways, net 19,418 (6,540 ) 12,878 Accounts payable 802 (327 ) 475 Payment processing liabilities, net 273 (2,624 ) (2,351 ) Additional paid-in capital 90,291 4,674 94,965 Accumulated deficit (31,143 ) (4,069 ) (35,213 ) Shares to be returned - (4,194 ) (4,194 ) Treasury stock, at cost (2,680 ) - (2,680 ) Statement of Operations (Unaudited) Three Months Ended September 30, 2021 As previously reported Restatement impacts As restated Cost of revenue $ 2,421 $ 335 $ 2,756 General and administrative expenses 784 1,648 2,433 Merchant fines and penalty income - 86 86 Other income (expense) (37 ) - (37 ) Loss before provision for income taxes (2,796 ) (249 ) (3,045 ) Net loss (6,050 ) (249 ) (6,299 ) Balance Sheet (Unaudited) June 30, 2021 As previously reported Restatement impacts As restated Cash and cash equivalents $ 29,797 $ (57 ) $ 29,740 Restricted cash - 57 57 Accounts receivable, net 75 - 75 Cash due from gateways, net 15,759 (6,267 ) 9,492 Accounts payable 520 (241 ) 280 Payment processing liabilities, net 4,296 (2,687 ) 1,609 Additional paid-in capital 73,916 4,674 78,590 Accumulated deficit (25,094 ) (3,820 ) (28,914 ) Shares to be returned - (4,194 ) (4,194 ) Treasury stock, at cost (933 ) - (933 ) Statement of Operations (Unaudited) Three Months Ended June 30, 2021 As previously reported Restatement impacts As restated Cost of revenue $ 1,323 $ 370 $ 1,694 General and administrative expenses 298 - 298 Interest expense - (594 ) (594 ) Merchant fines and penalty income - 104 104 Other income (expense) (4 ) - (4 ) Loss before provision for income taxes (40 ) (266 ) (306 ) Net loss (40 ) (266 ) (306 ) Balance Sheet (Unaudited) March 31, 2021 As previously reported Restatement impacts As restated Cash and cash equivalents $ 35,697 $ (101 ) $ 35,596 Restricted cash - 101 101 Accounts receivable, net 10 - 10 Cash due from gateways, net 11,849 (6,987 ) 4,862 Accounts payable 178 (136 ) 42 Payment processing liabilities, net 5,355 (3,776 ) 1,579 Additional paid-in capital 71,898 4,674 76,572 Accumulated deficit (25,054 ) (3,554 ) (28,608 ) Shares to be returned - (4,194 ) (4,194 ) Treasury stock, at cost - - - Statement of Operations (Unaudited) Three Months Ended March 31, 2021 As previously reported Restatement impacts As restated Cost of revenue $ 1,594 $ 153 $ 1,747 General and administrative expenses 566 - 566 Interest expense (594 ) - (594 ) Loss on settlement of debt - - - Changes in fair value of derivative liability - - - Merchant fines and penalty income - 136 136 Other income (expense) (15 ) - (15 ) Loss before provision for income taxes (13,329 ) (17 ) (13,346 ) Net loss (13,329 ) (17 ) (13,346 ) |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Northeast Merchant Systems, Inc. (“Northeast”) [Member] | |
ACQUISITIONS (Tables) [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following summarizes the estimated fair values of the net assets acquired: Tangible assets (liabilities): Net assets and liabilities $ (70,057 ) Intangible assets: Customer relationships 276,583 Goodwill 2,293,474 2,570,057 Total net assets acquired $ 2,500,000 |
Charge Savvy LLC [Member] | |
ACQUISITIONS (Tables) [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following summarizes the estimated fair values of the net assets acquired: Tangible assets (liabilities): Land/building $ 1,360,000 Other net assets (1,129,259 ) 230,741 Intangible assets: Customer relationships 5,543,612 Business technology 2,611,088 Goodwill 3,754,559 11,909,259 Total net assets acquired $ 12,140,000 |
Transact Europe Holdings [Member] | |
ACQUISITIONS (Tables) [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following summarizes the estimated fair values of the net assets acquired which is recorded as of April 1, 2022: Tangible assets (liabilities): Net assets and liabilities $ 7,339,229 Intangible assets: Customer relationships 1,266,781 Goodwill 20,204,590 21,471,371 Total net assets acquired $ 28,810,600 |
Sky Financial & Intelligence [Member] | |
ACQUISITIONS (Tables) [Line Items] | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The following summarizes the estimated fair values of the net assets acquired: Intangible assets: Customer relationships $ 18,110,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment consisted of the following: December 31, 2022 2021 Buildings, machinery and equipment $ 1,360,000 $ 1,301,405 Computers 231,072 134,982 Furniture and fixtures 149,090 108,715 Improvements 164,375 140,300 Vehicles, Machinery and Equipment 15,316 13,519 Total property and equipment 1,919,853 1,757,516 Less: accumulated depreciation (224,198 ) (82,632 ) Net property and equipment $ 1,695,655 $ 1,674,884 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | As of December 31, 2022 intangible assets consisted of the following: As of December 31, 2022 Amortization Accumulated Net Period Cost Amortization Customer relationships – Northeast and Charge Savvy 5 years $ 5,820,195 $ (1,755,279 ) $ 4,064,916 Customer relationships – Transact Europe 3 years $ 1,266,781 $ (475,044 ) $ 791,737 Business technology/IP 5 years $ 2,674,815 $ (792.889 ) $ 1,881,962 Total intangible assets $ 9,761,791 $ (3,023,177 ) $ 6,738,614 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Intangible assets with finite lives are amortized over the estimated periods benefitted on a straight- line basis. Amortization expense on intangible assets with finite lives for the 2022 financial year was $20,280,864 and is included in depreciation and amortization expense condensed consolidated statement of operations and comprehensive loss. This amortization expense included a $18,110,000 charge for the entire consideration paid. Amortization expense related to intangible assets for each of the next five fiscal years and thereafter is expected as follows: Year Ending December 31, Amount 2023 2,332,401 2024 1,857,356 2025 1,699,010 Thereafter 849,847 $ 6,738,614 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Goodwill [Table Text Block] | As of December 31, 2022 goodwill consisted of the following: December 31, 2022 December 31, 2021 Acquisition of Northeast $ 2,793,474 $ 2,793,474 Acquisition of ChargeSavvy 3,754,560 3,754,560 Acquisition of Transact Europe 20,204,590 - Total goodwill $ 26,752,624 $ 6,548,034 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | The Company’s Debt obligation at the end of 2022 consists of the following: As of December 31, 2022 2021 $100,000,000 8% Senior convertible note due November 3, 2024, (see below) $ 61,101,209 $ 58,655,178 $149,900 Economic Injury Disaster Loan (EIDL), interest rate of 3.75%, due June 1, 2050 146,426 149,900 $500,000 EIDL, interest rate of 3.75%, due May 8, 2050 486,934 500,000 Total debt 61,734,569 59,305,078 Current portion - - Net long term debt $ 61,734,569 $ 59,305,078 |
Convertible Debt [Table Text Block] | A continuity of the Notes for the year ended December 31, 2022 is summarized as follows: Balance, December 31, 2020 $ - Convertible debentures issued 100,000,000 Derivative liability (21,580,000 ) Original Issue Discount of 16% (16,000,000 ) Placement fees and issuance costs (7,200,000 ) Accretion expense 3,435,178 Balance, December 31, 2021 $ 58,655,178 Repayments (14,550,000 ) Accretion expense 16,996,031 Balance, December 31, 2022 $ 61,101,209 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | A continuity of derivative liability for the year ended December 31, 2022 is summarized as follows: Total Balance, December 1, 2020 $ - Derivative liability on convertible debentures 21,580,000 Change in fair value 2021 (2,845,000 ) Balance, December 31, 2021 $ 18,735,000 Change in fair value 2022 (18,480,021 ) Balance, December 31, 2022 $ 254,979 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The components of the provision for income taxes are as follows: Years Ended December 31, 2022 2021 Current: (as restated) Federal - - State 39,758 4,906 International - - Current income tax expense (benefit) 39,758 4,906 Deferred Federal - - State - - International (48,461 ) - Deferred income tax expense (benefit) (48,461 ) - Total tax expense Federal - - State 39,758 4,906 International (48,461 ) - Total (8,703 ) 4,906 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Taxes on income vary from the statutory federal income tax rate applied to earnings before tax on income as follows: Years Ended December 31, 2022 2021 (as restated) Statutory federal income tax rate of 21% applied to earnings before income taxes and extraordinary items $ (10,341,324 ) $ (7,406,700 ) State taxes - net of federal benefit 31,409 3,876 Penalties (242 ) 265 Meals and entertainment 14,064 10,085 Transactions expenses 40,771 32,253 PPP loan grant income - (57,270 ) Derivative expense - 721,387 Gift 3,477 Stock compensation(ISOs) - 487,294 Changes in FV of derivative liability (3,539,988 ) (597,450 ) Derecognition expense on conversion of convertible debt 1,199,031 - Stock compensation(NQ) - - Valuation allowance 12,328,573 6,335,905 Other, net 116,143 475,261 Foreign rate difference 139,383 - $ (8,703 ) $ 4,906 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred income tax assets and liabilities arising from differences between accounting for financial statement purposes and tax purposes, less valuation reserves at year end are as follows: Years Ended December 31, 2022 2021 (as restated) State taxes - prior year 4,022 1,030 Intangible assets 5,379,522 83,066 Allowance for credit losses 6,169,148 4,024,538 Stock compensation - 329,072 Capitalization of research and development Under Sec 174 1,120,728 - Lease liability - 364,147 Contingent liability 130,503 118,922 Charitable contributions carryforward 141 - Lease liability 270,374 - Net operating loss carryover 12,488,907 5,554,376 Total deferred tax assets 25,563,345 10,475,151 Deferred tax liabilities: Fixed assets (5,383 ) (3,055 ) Goodwill Tier 1 (103,613 ) (24,806 ) Intangible assets (78,217 ) - Right of use assets (250,111 ) (354,426 ) Total deferred tax liabilities (437,324 ) (382,287 ) Net deferred tax assets, non-current prior to valuation allowance 25,126,021 10,092,864 Valuation allowance (25,204,238 ) (10,092,864 ) Total net deferred taxes $ (78,217 ) $ - |
Summary of Operating Loss Carryforwards [Table Text Block] | Total NOL Pre-2017 Post 2017 Federal $ 49,977,661 $ - $ 49,977,661 State 25,760,588 - 25,760,588 International - - - |
STOCK OPTIONS AND AWARDS (Table
STOCK OPTIONS AND AWARDS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair value of each share option award on the date of grant was estimated using the Black-Scholes method based on the following weighted-average assumptions: 2022 2021 Risk free interest rate 2.70 % 0.29 % Expected term (years) 5.0 5.0 Expected volatility 93.2 % 555.8 % Expected dividend yield 0 % 0 % |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | The following table represents the employee stock option activity during the years ended December 31, 2022 and 2021. Shares Weighted Average Exercise Price Outstanding at December 31, 2020 477,430 $ 3.53 Exercisable at December 31, 2020 467,247 3.47 Granted 132,288 6.87 Exercised (117,297 ) 0.5 Forfeited or Expired (100,858 ) 7.62 Outstanding at December 31, 2021 391,563 5.07 Exercisable at December 31, 2021 377,039 4.8 Vested and Expected to Vest at December 31, 2021 391,563 $ 5.07 Granted 36,822 3.66 Exercised (12,417 ) 0.42 Forfeited or Expired (93,573 ) 6.72 Outstanding at December 31, 2021 322,395 4.29 Exercisable at December 31, 2021 - - Vested and Expected to Vest at December 31, 2022 319,627 $ 4.29 |
Nonvested Restricted Stock Shares Activity [Table Text Block] | A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2022 is presented below: Non-vested Restricted Stock Awards Weighted Average Grant Date Fair Value Non-vested at January 1, 2021 - Granted 359,226 $ 4.95 Vested (359,226 ) 4.95 Forfeited - - Non-vested at December 31, 2021 - - Granted 1,282,578 $ 1.67 Vested (563,218 ) 3.56 Forfeited (52,083 ) 2.12 Non-vested at December 31, 2022 667,277 $ 1.20 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block [Abstract] | |
Lease, Cost [Table Text Block] | The Company leases office space at four locations in California, Florida and Massachusetts. The components of lease expense are as follows: Year Ended December 31, 2022 2021 Operating lease expense $ 141,212 $ 433,025 Amortization of right-of-use assets 670,535 39,757 Total lease expense $ 811,747 $ 472,782 |
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block] | Payments for the year ended December 31, Total 2023 $ 671,630 2024 462,452 2025 350,422 2026 248,605 2027 42,463 Thereafter - Total undiscounted cash flows 1,775,572 Discounted (present value): Lease liabilities - current 533,601 Lease liabilities - long-term 1,108,665 Total lease liabilities $ 1,642,267 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | Year Ended December 31, 2022 2021 Net revenue North America $ 28,613 $ 26,305 International 4,296 - $ 32,909 $ 26,305 |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | December 31, 2022 2021 Long-lived assets, net North America $ 5,893 $ 7,579 International 846 - $ 6,739 $ 7,579 |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) $ / shares in Units, € in Millions | 12 Months Ended | ||||
Apr. 01, 2022 USD ($) | Apr. 01, 2022 EUR (€) | Jul. 13, 2021 $ / shares shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares shares | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) [Line Items] | |||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||
Payments to Acquire Businesses, Gross | $ 28,800,000 | € 26 | $ 500,000 | $ 2,500,000 | |
Charge Savvy LLC [Member] | |||||
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) [Line Items] | |||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | shares | 1,000,000 | 1,000,000 | |||
Common Stock, Par or Stated Value Per Share | $ 0.001 | ||||
Shares Issued, Price Per Share | $ 12.14 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2022 | Jul. 27, 2022 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Deposits (in Dollars) | $ 6,900,000 | $ 685,000 |
Minimum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Maximum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 8 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Cash and Cash Equivalents - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule Of Cash And Cash Equivalents Abstract | |||||||||
Cash and cash equivalents | $ 13,960,887 | $ 6,947,000 | $ 17,674,000 | $ 20,452,000 | $ 89,045,202 | $ 29,403,000 | $ 29,740,000 | $ 35,596,000 | |
Restricted cash | 26,872,835 | $ 30,616,000 | $ 37,951,000 | $ 228,000 | 514,493 | $ 305,000 | $ 57,000 | $ 101,000 | |
Total cash, cash equivalents and restricted cash | $ 40,833,722 | $ 89,559,695 | $ 1,832,735 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | $ 254,979 | $ 18,735,000 |
Customer Relationships [Member] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 4,856,653 | 5,820,195 |
Technology-Based Intangible Assets [Member] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | $ 1,881,962 | $ 2,611,088 |
RESTATEMENT OF CONSOLIDATED F_3
RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Prior Period Adjustment [Abstract] | |
Asset Impairment Charges | $ 1,400,000 |
Debt Instrument, Face Amount | $ 100,000,000 |
RESTATEMENT OF CONSOLIDATED F_4
RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS (Details) - Schedule of Error Corrections and Prior Period Adjustments - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||
Cash and cash equivalents | $ 6,947,000 | $ 17,674,000 | $ 20,452,000 | $ 89,045,202 | $ 29,403,000 | $ 29,740,000 | $ 35,596,000 | $ 13,960,887 | $ 89,045,202 |
Restricted cash | 30,616,000 | 37,951,000 | 228,000 | 514,493 | 305,000 | 57,000 | 101,000 | 26,872,835 | 514,493 |
Accounts receivable, net | 790,000 | 620,000 | 469,000 | 481,668 | 229,000 | 75,000 | 10,000 | 1,155,766 | 481,668 |
Cash due from gateways, net | 6,229,000 | 5,192,000 | 11,955,000 | 6,209,000 | 12,878,000 | 9,492,000 | 4,862,000 | 6,209,000 | |
Prepaid and other current assets | 7,537,000 | 7,829,000 | 28,988,000 | 28,968 | 9,497,825 | 28,968 | |||
Goodwill | 6,548,000 | 6,548,034 | 26,752,624 | 6,548,034 | |||||
Accounts payable | (19,000) | 864,000 | 622,000 | 469,000 | 475,000 | 280,000 | 42,000 | 469,000 | |
Other current liabilities | 3,133,000 | 5,395,000 | 4,826,000 | 2,227,000 | 2,227,000 | ||||
Payment processing liabilities, net | 24,913,000 | 35,541,000 | 7,820,000 | 2,313,000 | (2,351,000) | 1,609,000 | 1,579,000 | 2,313,000 | |
Convertible debt, net | 58,358,000 | 57,225,000 | 18,735,000 | 254,979 | 18,735,000 | ||||
Derivative liability | 0 | 495,134 | 533,601 | 495,134 | |||||
Additional paid-in capital | 100,399,000 | 90,905,000 | 90,470,000 | 94,748,332 | 94,965,000 | 78,590,000 | 76,572,000 | 96,270,716 | 94,748,332 |
Accumulated deficit | (83,756,000) | (67,872,000) | (80,180,000) | (50,536,635) | (35,213,000) | (28,914,000) | (28,608,000) | (99,772,333) | (50,536,635) |
Shares to be returned | (888,000) | (68,000) | (2,863,000) | (9,852,344) | (4,194,000) | (4,194,000) | (4,194,000) | (68,344) | (9,852,344) |
Treasury stock, at cost | (8,473,000) | (4,933,816) | (2,680,000) | (933,000) | 0 | (4,933,816) | |||
Treasury stock, at cost | (303,000) | (303,000) | |||||||
Cost of revenue | 4,333,000 | 4,230,000 | 2,780,000 | 3,873,000 | 2,756,000 | 1,694,000 | 1,747,000 | 16,786,593 | 10,069,661 |
General and administrative expenses | 1,792,000 | 13,582,000 | 2,433,000 | 298,000 | 566,000 | 6,602,967 | 16,878,536 | ||
Interest expense | (1,802,000) | (1,783,000) | (3,830,000) | (594,000) | (594,000) | ||||
Loss on settlement of debt | (2,395,000) | (757,000) | (900,000) | 0 | 272,713 | ||||
Changes in fair value of derivative liability | 26,435,000 | (7,700,000) | 16,857,086 | 2,845,000 | |||||
Merchant fines and penalty income | (368,000) | 82,000 | 0 | 75,000 | 86,000 | 104,000 | 136,000 | ||
Other income (expense) | 2,531,000 | (4,364,000) | (530,000) | (37,000) | (4,000) | (15,000) | 1,117,148 | (586,390) | |
Income (loss) before provision for income taxes | (15,849,000) | 12,014,000 | (29,347,000) | (18,573,000) | (3,045,000) | (306,000) | (13,346,000) | (49,244,401) | (35,269,999) |
Net income (loss) | (15,884,000) | 12,091,000 | (29,427,000) | (15,324,000) | (6,299,000) | (306,000) | (13,346,000) | $ (49,235,698) | (35,274,905) |
Previously Reported [Member] | |||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||
Cash and cash equivalents | 11,021,000 | 29,099,000 | 27,594,000 | 89,560,000 | 29,707,000 | 29,797,000 | 35,697,000 | 89,560,000 | |
Restricted cash | 26,607,000 | 26,526,000 | 0 | 0 | 0 | 0 | 0 | 0 | |
Accounts receivable, net | 790,000 | 620,000 | 469,000 | 482,000 | 229,000 | 75,000 | 10,000 | 482,000 | |
Cash due from gateways, net | 15,125,000 | 14,271,000 | 20,807,000 | 18,942,000 | 19,418,000 | 15,759,000 | 11,849,000 | 18,942,000 | |
Prepaid and other current assets | 14,568,000 | 14,105,000 | 35,263,000 | 6,421,000 | 6,421,000 | ||||
Goodwill | 6,048,000 | 6,048,000 | 6,048,000 | ||||||
Accounts payable | 97,000 | 1,348,000 | 1,069,000 | 871,000 | 802,000 | 520,000 | 178,000 | 871,000 | |
Other current liabilities | 1,416,000 | 3,586,000 | 2,385,000 | 1,727,000 | 1,727,000 | ||||
Payment processing liabilities, net | 22,593,000 | 33,468,000 | 5,390,000 | 4,998,000 | 273,000 | 4,296,000 | 5,355,000 | 4,998,000 | |
Convertible debt, net | 59,408,000 | 58,826,000 | |||||||
Derivative liability | 61,000 | ||||||||
Additional paid-in capital | 99,618,000 | 89,387,000 | 90,983,000 | 88,574,000 | 90,291,000 | 73,916,000 | 71,898,000 | 88,574,000 | |
Accumulated deficit | (64,254,000) | (49,084,000) | (59,494,000) | (38,178,000) | (31,143,000) | (25,094,000) | (25,054,000) | (38,178,000) | |
Shares to be returned | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Treasury stock, at cost | (8,171,000) | (4,934,000) | (2,680,000) | (933,000) | (4,934,000) | ||||
Treasury stock, at cost | 0 | 0 | |||||||
Cost of revenue | 4,270,000 | 4,143,000 | 2,564,000 | 4,074,000 | 2,421,000 | 1,323,000 | 1,594,000 | ||
General and administrative expenses | 1,792,000 | 7,466,000 | 784,000 | 298,000 | 566,000 | ||||
Interest expense | (1,907,000) | (1,866,000) | (1,889,000) | (594,000) | |||||
Loss on settlement of debt | 0 | 0 | 0 | ||||||
Changes in fair value of derivative liability | 26,374,000 | (7,700,000) | |||||||
Merchant fines and penalty income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Other income (expense) | 186,000 | 49,000 | 271,000 | (37,000) | (4,000) | (15,000) | |||
Income (loss) before provision for income taxes | (15,135,000) | 10,333,000 | (21,236,000) | (10,284,000) | (2,796,000) | (40,000) | (13,329,000) | ||
Net income (loss) | (15,170,000) | 10,410,000 | (21,316,000) | (7,035,000) | (6,050,000) | (40,000) | (13,329,000) | ||
Revision of Prior Period, Adjustment [Member] | |||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||
Cash and cash equivalents | (4,074,000) | (11,425,000) | (7,142,000) | (514,000) | (305,000) | (57,000) | (101,000) | (514,000) | |
Restricted cash | 4,009,000 | 11,425,000 | 227,000 | 514,000 | 305,000 | 57,000 | 101,000 | 514,000 | |
Accounts receivable, net | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Cash due from gateways, net | (8,896,000) | (9,079,000) | (8,853,000) | (12,732,000) | (6,540,000) | (6,267,000) | (6,987,000) | (12,732,000) | |
Prepaid and other current assets | (7,030,000) | (6,275,000) | (6,275,000) | (6,392,000) | (6,392,000) | ||||
Goodwill | 500,000 | 500,000 | 500,000 | ||||||
Accounts payable | (116,000) | (484,000) | (447,000) | (402,000) | (327,000) | (241,000) | (136,000) | (402,000) | |
Other current liabilities | 1,717,000 | 1,808,000 | 2,441,000 | 500,000 | 500,000 | ||||
Payment processing liabilities, net | 2,320,000 | 2,073,000 | 2,430,000 | (2,685,000) | (2,624,000) | (2,687,000) | (3,776,000) | (2,685,000) | |
Convertible debt, net | (1,051,000) | (1,601,000) | |||||||
Derivative liability | (61,000) | ||||||||
Additional paid-in capital | 781,000 | 1,519,000 | (512,000) | 6,174,000 | 4,674,000 | 4,674,000 | 4,674,000 | 6,174,000 | |
Accumulated deficit | (19,502,000) | (18,788,000) | (20,686,000) | (12,359,000) | (4,069,000) | (3,820,000) | (3,554,000) | (12,359,000) | |
Shares to be returned | (888,000) | (68,000) | (2,863,000) | (9,852,000) | (4,194,000) | (4,194,000) | (4,194,000) | (9,852,000) | |
Treasury stock, at cost | (303,000) | 0 | 0 | 0 | $ 0 | ||||
Treasury stock, at cost | (303,000) | (303,000) | |||||||
Cost of revenue | 63,000 | 87,000 | 216,000 | (201,000) | 335,000 | 370,000 | 153,000 | ||
General and administrative expenses | 6,116,000 | 1,648,000 | 0 | 0 | |||||
Interest expense | 105,000 | 83,000 | (1,941,000) | (594,000) | 0 | ||||
Loss on settlement of debt | (2,395,000) | (757,000) | (900,000) | ||||||
Changes in fair value of derivative liability | 61,000 | 0 | |||||||
Merchant fines and penalty income | (368,000) | 82,000 | 0 | 75,000 | 86,000 | 104,000 | 136,000 | ||
Other income (expense) | 2,345,000 | (4,414,000) | (802,000) | 0 | 0 | 0 | |||
Income (loss) before provision for income taxes | (714,000) | 1,681,000 | (8,111,000) | (8,289,000) | (249,000) | (266,000) | (17,000) | ||
Net income (loss) | $ (714,000) | $ 1,681,000 | $ (8,111,000) | $ (8,289,000) | $ (249,000) | $ (266,000) | $ (17,000) |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ / shares in Units, € in Millions | 12 Months Ended | ||||
Apr. 01, 2022 USD ($) shares | Apr. 01, 2022 EUR (€) shares | Jul. 13, 2021 USD ($) $ / shares shares | May 21, 2021 USD ($) | Dec. 31, 2021 shares | |
Northeast Merchant Systems, Inc. (“Northeast”) [Member] | |||||
ACQUISITIONS (Details) [Line Items] | |||||
Business Combination, Consideration Transferred | $ 2,500,000 | ||||
Business Combination, Contingent Consideration, Liability | $ 500,000 | ||||
Charge Savvy LLC [Member] | |||||
ACQUISITIONS (Details) [Line Items] | |||||
Business Combination, Consideration Transferred | $ 12,140,000 | ||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | shares | 1,000,000 | ||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ / shares | $ 0.001 | ||||
Business Acquisition, Share Price (in Dollars per share) | $ / shares | $ 12.14 | ||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | shares | 1,000,000 | 1,000,000 | |||
Transact Europe Holdings [Member] | |||||
ACQUISITIONS (Details) [Line Items] | |||||
Payments to Acquire Businesses, Gross | $ 28,800,000 | € 26 | |||
Sky Financial & Intelligence [Member] | |||||
ACQUISITIONS (Details) [Line Items] | |||||
Business Combination, Consideration Transferred | $ 18,110,000 | ||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | shares | 500,000 | 500,000 | |||
Payments to Acquire Businesses, Gross | $ 16,000,000 |
ACQUISITIONS (Details) - Schedu
ACQUISITIONS (Details) - Schedule of Business Acquisitions, by Acquisition - Northeast Merchant Systems, Inc. (“Northeast”) [Member] | May 21, 2021 USD ($) |
Tangible assets (liabilities): | |
Net assets and liabilities | $ (70,057) |
Intangible assets: | |
Intangible assets | 2,570,057 |
Total net assets acquired | 2,500,000 |
Goodwill [Member] | |
Intangible assets: | |
Intangible assets | 2,293,474 |
Customer Relationships [Member] | |
Intangible assets: | |
Intangible assets | $ 276,583 |
ACQUISITIONS (Details) - Sche_2
ACQUISITIONS (Details) - Schedule of Business Acquisitions, by Acquisition - Charge Savvy LLC [Member] - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 13, 2021 |
Tangible assets (liabilities): | |||
Property, Plant and Equipment | $ 230,741 | ||
Net assets and liabilities | (1,129,259) | ||
Intangible assets: | |||
Goodwill | $ 3,754,560 | $ 3,754,560 | 3,754,559 |
11,909,259 | |||
Total net assets acquired | 12,140,000 | ||
Customer Relationships [Member] | |||
Intangible assets: | |||
Intangible assets | 5,543,612 | ||
Technology-Based Intangible Assets [Member] | |||
Intangible assets: | |||
Intangible assets | 2,611,088 | ||
Land and Building [Member] | |||
Tangible assets (liabilities): | |||
Property, Plant and Equipment | $ 1,360,000 |
ACQUISITIONS (Details) - Sche_3
ACQUISITIONS (Details) - Schedule of Business Acquisitions, by Acquisition - Transact Europe Holdings [Member] | Apr. 01, 2022 USD ($) |
Tangible assets (liabilities): | |
Net assets and liabilities | $ 7,339,229 |
Intangible assets: | |
Intangible assets | 21,471,371 |
Total net assets acquired | 28,810,600 |
Customer Relationships [Member] | |
Intangible assets: | |
Intangible assets | 1,266,781 |
Goodwill [Member] | |
Intangible assets: | |
Intangible assets | $ 20,204,590 |
ACQUISITIONS (Details) - Sche_4
ACQUISITIONS (Details) - Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Mar. 31, 2022 USD ($) |
Sky Financial & Intelligence [Member] | |
Intangible assets: | |
Customer relationships | $ 18,110,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 141,566 | $ 123,805 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details) - Property, Plant and Equipment - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,919,853 | $ 1,757,516 |
Less: accumulated depreciation | (224,198) | (82,632) |
Net property and equipment | 1,695,655 | 1,674,884 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,360,000 | 1,301,405 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 231,072 | 134,982 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 149,090 | 108,715 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 164,375 | 140,300 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 15,316 | $ 13,519 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization of Intangible Assets | $ 20,280,864 |
Impairment of Intangible Assets, Finite-Lived | $ 18,110,000 |
INTANGIBLE ASSETS (Details) - S
INTANGIBLE ASSETS (Details) - Schedule of Finite-Lived Intangible Assets | Dec. 31, 2022 USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Cost | $ 9,761,791 |
Accumulated Amortization | (3,023,177) |
Net | $ 6,738,614 |
Technology-Based Intangible Assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization Period | 5 years |
Cost | $ 2,674,815 |
Accumulated Amortization | (792.889) |
Net | $ 1,881,962 |
Charge Savvy [Member] | Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization Period | 5 years |
Cost | $ 5,820,195 |
Accumulated Amortization | (1,755,279) |
Net | $ 4,064,916 |
Transact Europe Holdings [Member] | Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization Period | 3 years |
Cost | $ 1,266,781 |
Accumulated Amortization | (475,044) |
Net | $ 791,737 |
INTANGIBLE ASSETS (Details) -_2
INTANGIBLE ASSETS (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Dec. 31, 2022 USD ($) |
Schedule Of Finite Lived Intangible Assets Future Amortization Expense Abstract | |
2023 | $ 2,332,401 |
2024 | 1,857,356 |
2025 | 1,699,010 |
Thereafter | 849,847 |
$ 6,738,614 |
GOODWILL (Details) - Schedule o
GOODWILL (Details) - Schedule of Goodwill - USD ($) | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jul. 13, 2021 |
Goodwill [Line Items] | ||||
Goodwill | $ 26,752,624 | $ 6,548,000 | $ 6,548,034 | |
Northeast Merchant Systems, Inc. (“Northeast”) [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 2,793,474 | 2,793,474 | ||
Charge Savvy LLC [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | 3,754,560 | 3,754,560 | $ 3,754,559 | |
Transact Europe Holdings [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 20,204,590 | $ 0 |
DEBT (Details)
DEBT (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Jan. 28, 2022 | Nov. 02, 2021 | Oct. 27, 2020 | Jun. 09, 2020 | May 08, 2020 | Mar. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 29, 2020 | |
DEBT (Details) [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 100,000,000 | ||||||||||
Principal [Member] | |||||||||||
DEBT (Details) [Line Items] | |||||||||||
Repayments of Debt | 12,200,000 | ||||||||||
Interest Expense [Member] | |||||||||||
DEBT (Details) [Line Items] | |||||||||||
Repayments of Debt | 2,400,000 | ||||||||||
Senior Convertible Debt ]Member] | |||||||||||
DEBT (Details) [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 100,000,000 | $ 100,000,000 | |||||||||
Debt, Original Issue Discount Rate | 16% | ||||||||||
Proceeds from Debt, Net of Issuance Costs | $ 84,000,000 | ||||||||||
Debt Instrument, Description | Until such date as the principal amount of the Note is $5 million or less, all payments due under the Note will be senior to all other indebtedness of the Company and/or any of our subsidiaries. | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8% | 8% | |||||||||
Debt, Default Interest Rate | 15% | ||||||||||
Debt, Late Charge, Percentage | 15% | ||||||||||
Debt, Amendment Description | On January 28, 2022, we and the Investor, entered into an Agreement and Waiver (the “Waiver”) with regard to the Note that has the following major provisions: a) the Investor agreed to extend the “90 Day Eligibility Date” from February 3, 2022 to May 2, 2022 such that the Investor can no longer, if the closing price of the stock is less than $5.50, convert up to $30 million of the Note into shares of the Company’s common stock (with the conversion price being the lower of (i) the then in effect conversion price and (ii) the greater of (x) the Note’s $1.67 floor price or (y) 98% of the market price on the conversion date) (the “Alternate Optional Conversion Price”) prior to May 2, 2022; b) allows us to acquire, for cancellation, $6 million in in aggregate principal amount of the Note for a purchase price of $6.9 million such that the new principal amount of the Note is $94 million; c) lowers the initial fixed conversion price of the Note from $15 to $12; and d) if the trading volume of our common stock on any individual trading day is over $5 million (the “Alternate Conversion Company Waiver Measuring Date”), allows the Investor an opportunity to convert up to $5 million of the Note into shares of our common stock from the Alternate Conversion Company Waiver Measuring Date through and including 7:00 PM ET on the immediately following trading day. The conversion price would be the lower of (i) the then in effect conversion price and (ii) the greater of (x) the Note’s $1.67 floor price or (y) 98% of the market price on the conversion date. | ||||||||||
Repayments of Debt | $ 6,000,000 | $ 3,600,000 | $ 5,000,000 | ||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | At any time following the first anniversary of the issuance date of the Note, but only if the closing bid price of our common stock on the immediately prior trading day is less than $6.50, each holder of the Note shall have the option to convert, at such holder’s option, pro rata, up to $30 million of the principal amount of the Note (in $250,000 increments) at the Alternate Optional Conversion Price. | ||||||||||
Debt Instrument, Debt Default, Description of Violation or Event of Default | If an event of default has occurred under the Note, each holder may alternatively elect to convert the Note (subject to an additional 15% redemption premium) at the “Alternate Event of Default Conversion Price” equal to the lesser of: ● the fixed conversion price then in effect; and the greater of: ● the floor price; and ● 80% of the lowest volume weighted average price of our common stock during the five trading days immediately prior to such conversion. | ||||||||||
Debt Instrument, Redemption Price, Percentage | 15% | ||||||||||
Debt, Ownership Limitations | The Note may not be converted and shares of common stock may not be issued under the Note if, after giving effect to the conversion or issuance, the applicable holder of the Note (together with its affiliates, if any) would beneficially own in excess of 4.99% of the Company’s outstanding shares of common stock, which is referred to herein as the “Note Blocker”. The Note Blocker may be raised or lowered to any other percentage not in excess of 9.99% at the option of the applicable holder of Notes, except that any raise will only be effective upon 61-days’ prior notice to us. | ||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ 12 | $ 15 | |||||||||
Debt Conversion, Description | If, during the fiscal quarter ending March 31, 2022, the Company (i) fails to process at least $750 million in transaction volume or (ii) has revenue that is less than $12 million, and, if the Note’s fixed conversion price then in effect is greater than the greater of (x) the Note’s $1.67 floor price floor and (y) 140% of the market price as of April 1, 2022 (the “Adjustment Measuring Price”) then, on April 1, 2022, the fixed conversion price will automatically adjust to the Adjustment Measuring Price. | ||||||||||
Debt Instrument, Redemption, Description | At any time no event of default exits, we may redeem all, but not less than all, the Notes outstanding in cash all, or any portion, of the Notes at a 5% redemption premium to the greater of the face value and the equity value of our common stock underlying the Notes | ||||||||||
Debt Instrument, Maturity Date | Nov. 03, 2024 | ||||||||||
Kingswood Capital Markets [Member] | |||||||||||
DEBT (Details) [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 3,850,000 | ||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ 1.98 | ||||||||||
Debt Instrument, Maturity Date | Jul. 27, 2021 | ||||||||||
Debt Instrument, Unamortized Discount | $ 350,000 | ||||||||||
Proceeds from Convertible Debt | $ 3,500,000 | ||||||||||
Class of Warrant or Rights, Granted (in Shares) | 1,944,444 | 1,884,418 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 1.98 | ||||||||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 3,498,667 | ||||||||||
Stock Issued During Period, Shares, Other (in Shares) | 1,944,416 | ||||||||||
Proceeds from Other Debt | $ 3,700,000 | ||||||||||
SBA CARES Act Loan [Member] | |||||||||||
DEBT (Details) [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 149,900 | $ 149,900 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | 3.75% | |||||||||
Debt Instrument, Maturity Date | Jun. 01, 2050 | ||||||||||
Debt Instrument, Term | 30 years | ||||||||||
Debt Instrument, Periodic Payment | $ 731 | ||||||||||
Economic Injury Disaster Loan (“EIDL”) [Member] | |||||||||||
DEBT (Details) [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 150,000 | $ 500,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | 3.75% | |||||||||
Debt Instrument, Maturity Date | May 08, 2050 | ||||||||||
Proceeds from Other Debt | $ 10,000 | ||||||||||
Debt Instrument, Periodic Payment | 731 | ||||||||||
Other Nonrecurring Income | 10,000 | ||||||||||
Debt Instrument, Increase (Decrease), Net | $ 350,000 | ||||||||||
Preferred Bank PPP Loan [Member] | |||||||||||
DEBT (Details) [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 272,713 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1% |
DEBT (Details) - Schedule of De
DEBT (Details) - Schedule of Debt - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
DEBT (Details) - Schedule of Debt [Line Items] | |||
Total debt | $ 61,734,569 | $ 59,305,078 | |
Current portion | 0 | 0 | |
Net long term debt | 61,734,569 | 59,305,078 | |
Senior Convertible Debt ]Member] | |||
DEBT (Details) - Schedule of Debt [Line Items] | |||
Convertible notes payable | 61,101,209 | 58,655,178 | $ 0 |
SBA CARES Act Loan [Member] | |||
DEBT (Details) - Schedule of Debt [Line Items] | |||
Loan | 146,426 | 149,900 | |
Economic Injury Disaster Loan (“EIDL”) [Member] | |||
DEBT (Details) - Schedule of Debt [Line Items] | |||
Loan | $ 486,934 | $ 500,000 |
DEBT (Details) - Schedule of _2
DEBT (Details) - Schedule of Debt (Parentheticals) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Nov. 02, 2021 | Jun. 09, 2020 | May 08, 2020 | |
Senior Convertible Debt ]Member] | ||||
DEBT (Details) - Schedule of Debt (Parentheticals) [Line Items] | ||||
Principal | $ 100,000,000 | $ 100,000,000 | ||
Interest rate | 8% | 8% | ||
Due | Nov. 03, 2024 | |||
SBA CARES Act Loan [Member] | ||||
DEBT (Details) - Schedule of Debt (Parentheticals) [Line Items] | ||||
Principal | $ 149,900 | $ 149,900 | ||
Interest rate | 3.75% | 3.75% | ||
Due | Jun. 01, 2050 | |||
Economic Injury Disaster Loan (“EIDL”) [Member] | ||||
DEBT (Details) - Schedule of Debt (Parentheticals) [Line Items] | ||||
Principal | $ 500,000 | $ 150,000 | ||
Interest rate | 3.75% | 3.75% | ||
Due | May 08, 2050 |
DEBT (Details) - Convertible De
DEBT (Details) - Convertible Debt - Senior Convertible Debt ]Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
DEBT (Details) - Convertible Debt [Line Items] | ||
Balance | $ 58,655,178 | $ 0 |
Repayments | (14,550,000) | |
Convertible debentures issued | 100,000,000 | |
Derivative liability | (21,580,000) | |
Original Issue Discount of 16% | (16,000,000) | |
Placement fees and issuance costs | (7,200,000) | |
Accretion expense | 16,996,031 | 3,435,178 |
Balance | $ 61,101,209 | $ 58,655,178 |
DEBT (Details) - Fair Value, Li
DEBT (Details) - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation Abstract | ||
Balance | $ 18,735,000 | $ 0 |
Derivative liability on convertible debentures | 21,580,000 | |
Change in fair value | (18,480,021) | (2,845,000) |
Balance | $ 254,979 | $ 18,735,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Domestic Tax Authority [Member] | ||
INCOME TAXES (Details) [Line Items] | ||
Operating Loss Carryforwards | $ 49,977,661 | $ 49,977,661 |
State and Local Jurisdiction [Member] | ||
INCOME TAXES (Details) [Line Items] | ||
Operating Loss Carryforwards | $ 25,760,588 | $ 25,760,588 |
INCOME TAXES (Details) - Schedu
INCOME TAXES (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 39,758 | 4,906 |
International | 0 | 0 |
Current income tax expense (benefit) | 39,758 | 4,906 |
Deferred | ||
Federal | 0 | 0 |
State | 0 | 0 |
International | (48,461) | 0 |
Deferred income tax expense (benefit) | (48,461) | 0 |
Total tax expense | ||
Federal | 0 | 0 |
State | 39,758 | 4,906 |
International | (48,461) | 0 |
Income tax provision | $ (8,703) | $ 4,906 |
INCOME TAXES (Details) - Sche_2
INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Effective Income Tax Rate Reconciliation Abstract | ||
Statutory federal income tax rate of 21% applied to earnings before income taxes and extraordinary items | $ (10,341,324) | $ (7,406,700) |
State taxes - net of federal benefit | 31,409 | 3,876 |
Penalties | (242) | 265 |
Meals and entertainment | 14,064 | 10,085 |
Transactions expenses | 40,771 | 32,253 |
PPP loan grant income | 0 | (57,270) |
Derivative expense | 0 | 721,387 |
Gift | 3,477 | |
Stock compensation(ISOs) | 0 | 487,294 |
Changes in FV of derivative liability | (3,539,988) | (597,450) |
Derecognition expense on conversion of convertible debt | 1,199,031 | 0 |
Stock compensation(NQ) | 0 | 0 |
Valuation allowance | 12,328,573 | 6,335,905 |
Other, net | 116,143 | 475,261 |
Foreign rate difference | 139,383 | 0 |
$ (8,703) | $ 4,906 |
INCOME TAXES (Details) - Sche_3
INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation (Parentheticals) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule Of Effective Income Tax Rate Reconciliation Abstract | |
Statutory federal income tax rate | 21% |
INCOME TAXES (Details) - Sche_4
INCOME TAXES (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule Of Deferred Tax Assets And Liabilities Abstract | ||
State taxes - prior year | $ 4,022 | $ 1,030 |
Intangible assets | 5,379,522 | 83,066 |
Allowance for credit losses | 6,169,148 | 4,024,538 |
Stock compensation | 0 | 329,072 |
Capitalization of research and development Under Sec 174 | 1,120,728 | 0 |
Lease liability | 0 | 364,147 |
Contingent liability | 130,503 | 118,922 |
Charitable contributions carryforward | 141 | 0 |
Lease liability | 270,374 | 0 |
Net operating loss carryover | 12,488,907 | 5,554,376 |
Total deferred tax assets | 25,563,345 | 10,475,151 |
Fixed assets | (5,383) | (3,055) |
Goodwill Tier 1 | (103,613) | (24,806) |
Intangible assets | (78,217) | 0 |
Right of use assets | (250,111) | (354,426) |
Total deferred tax liabilities | (437,324) | (382,287) |
Net deferred tax assets, non-current prior to valuation allowance | 25,126,021 | 10,092,864 |
Valuation allowance | (25,204,238) | (10,092,864) |
Total net deferred taxes | $ (78,217) | $ 0 |
INCOME TAXES (Details) - Summar
INCOME TAXES (Details) - Summary of Operating Loss Carryforwards - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Loss Carryforwards [Line Items] | ||
NOL | $ 0 | $ 0 |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
NOL | 49,977,661 | 49,977,661 |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
NOL | $ 25,760,588 | $ 25,760,588 |
STOCK OPTIONS AND AWARDS (Detai
STOCK OPTIONS AND AWARDS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement, Option [Member] | ||||
STOCK OPTIONS AND AWARDS (Details) [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 3,300,000 | 5,000,000 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 5 years | |||
Share-Based Payment Arrangement, Expense (in Dollars) | $ 2,370,826 | $ 1,759,164 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number | 173,433 | 40,797 | ||
Share-Based Payment Arrangement, Option [Member] | Minimum [Member] | ||||
STOCK OPTIONS AND AWARDS (Details) [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 5 years | |||
Share-Based Payment Arrangement, Option [Member] | Maximum [Member] | ||||
STOCK OPTIONS AND AWARDS (Details) [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 10 years | |||
Restricted Stock [Member] | ||||
STOCK OPTIONS AND AWARDS (Details) [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 5,000,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 5 years | |||
Share-Based Payment Arrangement, Expense (in Dollars) | $ 1,776,750 |
STOCK OPTIONS AND AWARDS (Det_2
STOCK OPTIONS AND AWARDS (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCK OPTIONS AND AWARDS (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items] | ||
Risk-free interest rate | 0.29% | |
Expected term | 5 years | |
Expected volatility | 555.80% | |
Expected dividend yield | 0% | |
Minimum [Member] | ||
STOCK OPTIONS AND AWARDS (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items] | ||
Risk-free interest rate | 2.70% | |
Expected term | 5 years | |
Expected volatility | 93.20% | |
Expected dividend yield | 0% |
STOCK OPTIONS AND AWARDS (Det_3
STOCK OPTIONS AND AWARDS (Details) - Share-based Payment Arrangement, Option, Activity - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Payment Arrangement Option Activity Abstract | ||
Outstanding, Shares | 391,563 | 477,430 |
Outstanding, Weighted- Average Exercise Price | $ 5.07 | $ 3.53 |
Exercisable, Shares | 377,039 | 467,247 |
Exercisable, Weighted- Average Exercise Price | $ 4.8 | $ 3.47 |
Vested and Expected to Vest, Shares | 319,627 | 391,563 |
Vested and Expected to Vest, Weighted- Average Exercise Price | $ 4.29 | $ 5.07 |
Granted, Shares | 36,822 | 132,288 |
Granted, Weighted- Average Exercise Price | $ 3.66 | $ 6.87 |
Exercise, Shares | (12,417) | (117,297) |
Exercised, Weighted- Average Exercise Price | $ 0.42 | $ 0.5 |
Forfeited or Expired, Shares | (93,573) | (100,858) |
Forfeited or Expired, Weighted- Average Exercise Price | $ 6.72 | $ 7.62 |
Outstanding, Shares | 322,395 | 391,563 |
Outstanding, Weighted- Average Exercise Price | $ 4.29 | $ 5.07 |
Exercisable, Shares | 0 | 377,039 |
Exercisable, Weighted- Average Exercise Price | $ 0 | $ 4.8 |
STOCK OPTIONS AND AWARDS (Det_4
STOCK OPTIONS AND AWARDS (Details) - Nonvested Restricted Stock Shares Activity - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Nonvested Restricted Stock Shares Activity Abstract | ||
Granted | 1,282,578 | 359,226 |
Granted, Weighted Average Grant Date Fair Value (in Dollars per share) | $ 1.67 | $ 4.95 |
Vested | (563,218) | (359,226) |
Vested, Weighted Average Grant Date Fair Value (in Dollars per share) | $ 3.56 | $ 4.95 |
Forfeited | (52,083) | 0 |
Forfeited, Weighted Average Grant Date Fair Value (in Dollars per share) | $ 2.12 | $ 0 |
Non-vested Restricted Stock Awards | 0 | |
Non-vested Restricted Stock Awards, Weighted Average Grant Date Fair Value (in Dollars per share) | $ 0 | |
Non-vested Restricted Stock Awards | 667,277 | 0 |
Non-vested Restricted Stock Awards, Weighted Average Grant Date Fair Value (in Dollars per share) | $ 1.2 | $ 0 |
LEASES (Details)
LEASES (Details) | Dec. 31, 2022 |
Disclosure Text Block [Abstract] | |
Operating Lease, Weighted Average Remaining Lease Term | 3 years 2 months 8 days |
Operating Lease, Weighted Average Discount Rate, Percent | 10% |
LEASES (Details) - Lease, Cost
LEASES (Details) - Lease, Cost - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lease, Cost [Abstract] | ||
Operating lease expense | $ 141,212 | $ 433,025 |
Amortization of right-of-use assets | 670,535 | 39,757 |
Total lease expense | $ 811,747 | $ 472,782 |
LEASES (Details) - Lessee, Oper
LEASES (Details) - Lessee, Operating Lease, Liability, Maturity - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Lessee Operating Lease Liability Maturity Abstract | ||
2023 | $ 671,630 | |
2024 | 462,452 | |
2025 | 350,422 | |
2025 | 248,605 | |
2027 | 42,463 | |
Thereafter | 0 | |
Total undiscounted cash flows | 1,775,572 | |
Discounted (present value): | ||
Lease liabilities - current | 533,601 | |
Lease liabilities - long-term | 1,108,665 | $ 1,035,895 |
Total lease liabilities | $ 1,642,267 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Oct. 31, 2022 | Jul. 13, 2021 | Oct. 31, 2022 | Nov. 30, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||||
Revenues | $ 32,909,112 | $ 26,304,502 | |||||
Stock Repurchased During Period, Shares (in Shares) | 2,000,000 | ||||||
Payments for Repurchase of Equity | 4,056,723 | 4,934,531 | |||||
Charge Savvy [Member] | |||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||||
Equity Method Investment, Ownership Percentage | 100% | ||||||
Related Party Transaction, Description of Transaction | Sky owns 68.4% of Charge Savvy, LLC (“Charge Savvy”), an Illinois limited liability company. Haller serves as one of three Managing Members of Charge Savvy, along with Higher Ground Capital, LLC (owns 14%), and Jeff Nickel (owns 17.4%). | ||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 1,000,000 | ||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 12.14 | ||||||
Monthly Consulting Fee [Member] | |||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||||
Related Party Transaction, Amounts of Transaction | $ 10,000 | ||||||
First Repurchase [Member] | |||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||||
Stock Repurchased During Period, Shares (in Shares) | 1,000,000 | ||||||
Share Price (in Dollars per share) | $ 5.59 | $ 5.59 | |||||
Payments for Repurchase of Equity | $ 5,590,000 | ||||||
Second Repurchase [Member] | |||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||||
Stock Repurchased During Period, Shares (in Shares) | 1,000,000 | ||||||
Share Price (in Dollars per share) | $ 0.82 | $ 0.82 | |||||
Payments for Repurchase of Equity | $ 820,000 | ||||||
Sky Financial & Intelligence [Member] | |||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||||
Revenues | 13,130,482 | ||||||
Accounts Receivable, after Allowance for Credit Loss | $ 6,540,027 | ||||||
Family of CEO #1 [Member] | |||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||||
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold | 200,000 | ||||||
Family of CEO #2 [Member] | |||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | |||||||
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold | $ 110,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 1 Months Ended | ||
Nov. 30, 2021 | Dec. 31, 2022 | Jul. 27, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Other Payments to Acquire Businesses | $ 725,000 | ||
Deposits | $ 6,900,000 | $ 685,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 2 |
Number of Reportable Segments | 2 |
SEGMENT INFORMATION (Details) -
SEGMENT INFORMATION (Details) - Reconciliation of Revenue from Segments to Consolidated - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net revenue | ||
Revenues | $ 32,909,112 | $ 26,304,502 |
North America [Member] | ||
Net revenue | ||
Revenues | 28,613,000 | 26,305,000 |
International [Member] | ||
Net revenue | ||
Revenues | $ 4,296,000 | $ 0 |
SEGMENT INFORMATION (Details)_2
SEGMENT INFORMATION (Details) - Reconciliation of Assets from Segment to Consolidated - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Long-lived assets, net | ||
Long-Lived Assets | $ 6,739 | $ 7,579 |
North America [Member] | ||
Long-lived assets, net | ||
Long-Lived Assets | 5,893 | 7,579 |
International [Member] | ||
Long-lived assets, net | ||
Long-Lived Assets | $ 846 | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] | Mar. 28, 2023 USD ($) |
SUBSEQUENT EVENTS (Details) [Line Items] | |
Sale Leaseback Transaction, Amount Due under Financing Arrangement | $ 2,700,000 |
Sale Leaseback Transaction, Lease Term | 5 years |