Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 22, 2024 | Jun. 30, 2023 | |
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 | 5,995,972 | ||
Entity Public Float | $ 28,663,493 | ||
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, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
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, $0.001 par value | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Document Financial Statement Error Correction [Flag] | true | ||
Document Financial Statement Restatement Recovery Analysis [Flag] | false | ||
Auditor Firm ID | 2485 | ||
Auditor Name | Simon & Edward, LLP | ||
Auditor Location | Rowland Heights, CA | ||
Document Transition Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 12,180 | $ 13,961 |
Restricted cash | 61,138 | 26,873 |
Accounts receivable, net of allowance for credit losses of $23 and $82, respectively | 859 | 1,156 |
Cash due from gateways, net of allowance of $2,636 and $3,917, respectively | 12,834 | 7,427 |
Prepaid and other current assets | 2,854 | 9,799 |
Total current assets | 89,865 | 59,216 |
Non-current Assets: | ||
Property and equipment, net | 306 | 1,696 |
Goodwill | 26,753 | 26,753 |
Intangible assets, net | 5,059 | 6,739 |
Operating lease right-of-use assets, net | 4,279 | 1,533 |
Other assets | 2,403 | 1,720 |
Total non-current assets | 38,800 | 38,441 |
Total assets | 128,665 | 97,657 |
Current Liabilities: | ||
Accounts payable | 1,819 | 1,630 |
Accrued liabilities | 5,755 | 3,350 |
Accrued interest | 0 | 1,728 |
Payment processing liabilities, net | 76,772 | 28,912 |
Current portion of operating lease liabilities | 692 | 534 |
Other current liabilities | 504 | 582 |
Total current liabilities | 85,542 | 36,736 |
Long term debt, net of debt discount of $3,906 and $24,349, respectively | 15,912 | 61,735 |
Operating lease liabilities, less current portion | 3,720 | 1,109 |
Total liabilities | 105,174 | 99,580 |
Commitments and contingencies | 0 | 0 |
Stockholders’ Equity/(Deficit): | ||
Preferred stock, Series B, par value $0.01, 5,000,000 shares authorized; shares issued and outstanding of 55,000 and 0, respectively | 1 | 0 |
Common stock, par value $0.001, 100,000,000 shares authorized; shares issued and outstanding of 5,996,948 and 4,972,736, respectively | 6 | 5 |
Additional paid-in capital | 175,664 | 97,494 |
Accumulated other comprehensive income | 401 | 357 |
Accumulated deficit | (152,581) | (99,772) |
Less: Shares to be returned | 0 | (7) |
Total stockholders’ equity/(deficit) | 23,491 | (1,923) |
Total liabilities and stockholder’s equity/(deficit) | $ 128,665 | $ 97,657 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts receivable, allowance for credit losses (in Dollars) | $ 23 | $ 82 |
Cash due from gateways, allowance (in Dollars) | 2,636 | 3,917 |
Long term debt, debt discount (in Dollars) | $ 3,906 | $ 24,349 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 5,996,948 | 4,972,736 |
Common stock, shares outstanding | 5,996,948 | 4,972,736 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 55,000 | 0 |
Preferred stock, shares outstanding | 55,000 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 65,869 | $ 32,909 |
Cost of Goods Sold | 40,157 | 16,786 |
Gross Profit | 25,712 | 16,123 |
Operating expenses: | ||
Advertising and marketing | 80 | 1,337 |
Research and development | 5,757 | 6,276 |
General and administrative | 8,678 | 6,603 |
Payroll and payroll taxes | 12,017 | 10,547 |
Professional fees | 7,076 | 5,312 |
Stock compensation expense | 1,853 | 2,969 |
Depreciation and amortization | 2,553 | 20,917 |
Total operating expenses | 38,014 | 53,961 |
Loss from operations | (12,302) | (37,838) |
Other income (expense): | ||
Interest expense | (3,340) | (8,169) |
Accretion of debt discount | (13,134) | (13,980) |
Changes in fair value of derivative liability | 6,544 | 16,857 |
Derecognition expense on conversion of convertible debt | (25,035) | (5,709) |
Legal settlement expense | (4,142) | 0 |
Gain on sale of property and equipment | 1,069 | 0 |
Other expense | (2,472) | (405) |
Total other income (expense), net | (40,510) | (11,406) |
Loss before provision for income taxes | (52,812) | (49,244) |
Income tax provision | 289 | (8) |
Net Income (loss) | (53,101) | (49,236) |
Comprehensive income statement: | ||
Net loss | (53,101) | (49,236) |
Foreign currency translation gain | 44 | 357 |
Total comprehensive loss | $ (53,057) | $ (48,879) |
Net loss per share: | ||
Basic and diluted (in Dollars per share) | $ (10.11) | $ (10.8) |
Weighted average number of common shares outstanding: | ||
Basic and diluted (in Shares) | 5,251,852 | 4,557,200 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Shareholder [Member] Common Stock [Member] | Restricted Stock [Member] Common Stock [Member] | Restricted Stock [Member] Additional Paid-in Capital [Member] | Restricted Stock [Member] | Series B Preferred Stock [Member] Additional Paid-in Capital [Member] | Series B Preferred Stock [Member] Preferred Stock [Member] | Series B Preferred Stock [Member] | Other Comprehensive Income (Loss) [Member] AOCI Attributable to Parent [Member] | Other Comprehensive Income (Loss) [Member] | Interest Expense [Member] Common Stock [Member] Common Stock to be Issued [Member] | Interest Expense [Member] Additional Paid-in Capital [Member] Common Stock to be Issued [Member] | Interest Expense [Member] Common Stock to be Issued [Member] Common Stock to be Issued [Member] | Interest Expense [Member] Common Stock to be Issued [Member] | Common Stock [Member] | Common Stock to be Returned [Member] | Treasury Stock, Common [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Common Stock to be Issued [Member] | AOCI Attributable to Parent [Member] | Preferred Stock [Member] | Total |
Balance at Dec. 31, 2021 | $ 4 | $ (985) | $ (493) | $ 81,479 | $ (50,536) | $ 29,469 | ||||||||||||||||
Balance (in Shares) at Dec. 31, 2021 | 4,354,665 | (143,689) | (71,463) | |||||||||||||||||||
Common stock issued for services | 464 | 464 | ||||||||||||||||||||
Common stock issued for services (in Shares) | 35,488 | |||||||||||||||||||||
Common stock issued | 2,372 | $ 2,372 | ||||||||||||||||||||
Common stock issued (in Shares) | 3,333 | 112,587 | 1,276 | 105,417 | ||||||||||||||||||
Net loss and comprehensive loss | $ 1,596 | $ 1,596 | ||||||||||||||||||||
Reclassification adjustment | 1,239 | $ (1,239) | ||||||||||||||||||||
Net loss | (49,236) | $ (49,236) | ||||||||||||||||||||
Common stock issued for stock options exercised | 5 | 5 | ||||||||||||||||||||
Common stock issued for stock options exercised (in Shares) | 1,242 | |||||||||||||||||||||
Share repurchase | $ 978 | (1,798) | (820) | |||||||||||||||||||
Share repurchase (in Shares) | (230,000) | 130,000 | ||||||||||||||||||||
Issuances of common stock for acquisition | 2,110 | 2,110 | ||||||||||||||||||||
Issuances of common stock for acquisition (in Shares) | 50,000 | |||||||||||||||||||||
Common stock issued upon conversion of note payable | $ 2,528 | $ 2,528 | $ 1 | 12,825 | 12,826 | |||||||||||||||||
Common stock issued upon conversion of note payable (in Shares) | 189,650 | 174,116 | 595,610 | |||||||||||||||||||
Treasury stock | $ (324) | (2,913) | (3,237) | |||||||||||||||||||
Treasury stock (in Shares) | (68,376) | |||||||||||||||||||||
Treasury Stock canceelled | $ 817 | (817) | ||||||||||||||||||||
Treasury Stock canceelled (in Shares) | (139,839) | 139,839 | ||||||||||||||||||||
Balance at Dec. 31, 2022 | $ 5 | $ (7) | 97,494 | (99,772) | 357 | (1,923) | ||||||||||||||||
Balance (in Shares) at Dec. 31, 2022 | 4,972,736 | (13,689) | 175,392 | |||||||||||||||||||
Common stock issued | $ 129 | $ 129 | 1,555 | $ 1,555 | ||||||||||||||||||
Common stock issued (in Shares) | 23,820 | 303,015 | 100,525 | |||||||||||||||||||
Net loss and comprehensive loss | (53,101) | 44 | $ (53,057) | |||||||||||||||||||
Net loss | $ (53,101) | |||||||||||||||||||||
Common stock issued for stock options exercised (in Shares) | 0 | |||||||||||||||||||||
Share repurchase | $ 7 | (7) | ||||||||||||||||||||
Share repurchase (in Shares) | (13,672) | 13,689 | ||||||||||||||||||||
Common stock issued upon conversion of note payable | $ 74,141 | $ 1 | $ 74,142 | $ 5 | $ 5 | $ 1 | 2,514 | $ 2,515 | ||||||||||||||
Common stock issued upon conversion of note payable (in Shares) | 55,000 | 176,130 | (175,392) | 527,172 | ||||||||||||||||||
Carryover effects of financial statement restatements in prior periods | 292 | 292 | ||||||||||||||||||||
Shares forfeited | (167) | (167) | ||||||||||||||||||||
Shares forfeited (in Shares) | (26,683) | |||||||||||||||||||||
Issuances of common stock from previous unregistered shares (in Shares) | 34,430 | |||||||||||||||||||||
Balance at Dec. 31, 2023 | $ 6 | $ 175,664 | $ (152,581) | $ 401 | $ 1 | $ 23,491 | ||||||||||||||||
Balance (in Shares) at Dec. 31, 2023 | 5,996,948 | 55,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands, € in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Cash flows from operating activities: | ||
Net loss | $ (53,101) | $ (49,236) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 2,553 | 20,917 |
Noncash lease expense | 350 | 43 |
Stock compensation expense | 1,853 | 2,969 |
Stock issued for interest expense | 0 | 2,418 |
Accretion of debt discount | 13,134 | 13,980 |
Derecognition expense on conversion of convertible debt | 25,035 | 5,709 |
Changes in fair value of derivative liability | (6,544) | (16,857) |
Gain on sale of property and equipment | (1,069) | 0 |
Changes in assets and liabilities: | ||
Accounts receivable, net | 297 | (1,367) |
Prepaid and other current assets | 6,568 | (1,539) |
Cash due from gateways, net | (5,407) | (1,218) |
Other assets | (1,183) | (6) |
Accounts payable | 189 | 1,161 |
Accrued and other current liabilities | 2,080 | 2,662 |
Accrued interest | 546 | 502 |
Payment processing liabilities, net | 47,860 | 10,518 |
Net cash provided by (used in) operating activities | 33,161 | (9,344) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (108) | (162) |
Proceeds from sale of property and equipment | 2,620 | 0 |
Sky Financial & Intelligence asset acquisition | 0 | (16,000) |
Net cash provided by (used in) investing activities | 2,287 | (46,409) |
Deposit on acquisitions | 0 | (936) |
Purchase of intangibles | 0 | (500) |
Cash flows from financing activities: | ||
Treasury stock purchases | 7 | (4,057) |
Proceeds from stock option exercises | 0 | 8 |
Repayments of convertible debt | (3,000) | (6,000) |
Repayments on long-term debt | (15) | 0 |
Net cash used in financing activities | (3,008) | (10,049) |
Restricted cash acquired from Transact Europe | 0 | 16,719 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 32,440 | (49,083) |
Foreign currency translation adjustment | 44 | 357 |
Cash, cash equivalents, and restricted cash – beginning of period | 40,834 | 89,560 |
Cash, cash equivalents, and restricted cash – end of period | 73,318 | 40,834 |
Cash paid during the period for: | ||
Interest | 2,709 | 5,751 |
Income taxes | 0 | 0 |
Principal [Member] | Preferred Stock [Member] | ||
Non-cash financing and investing activities: | ||
Convertible debt conversion to stock | 64,600 | 0 |
Interest accrual from convertible debt converted to stock | 64,600 | 0 |
Principal [Member] | Common Stock [Member] | ||
Non-cash financing and investing activities: | ||
Convertible debt conversion to stock | 1,650 | 8,550 |
Interest accrual from convertible debt converted to stock | 1,650 | 8,550 |
Interest Expense [Member] | Preferred Stock [Member] | ||
Non-cash financing and investing activities: | ||
Convertible debt conversion to stock | 1,703 | 0 |
Interest accrual from convertible debt converted to stock | 1,703 | 0 |
Interest Expense [Member] | Common Stock [Member] | ||
Non-cash financing and investing activities: | ||
Convertible debt conversion to stock | 4 | 0 |
Interest accrual from convertible debt converted to stock | 4 | 0 |
Logicquest Technology Inc [Member] | ||
Cash flows from investing activities: | ||
Acquisition | (225) | 0 |
Transact Europe Holdings [Member] | ||
Cash flows from investing activities: | ||
Acquisition | $ 0 | $ (28,811) |
Description of the Business and
Description of the Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. Description of the Business and Basis of Presentation Organization RYVYL Inc. (together with its subsidiaries, the “Company”) is a financial technology company that develops, markets, and sells innovative blockchain-based payment solutions, which offer significant improvements for the payment solutions marketplace. The Company’s core focus is developing and monetizing 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 limitless volume of tokenized assets, representing cash or data, on a secured, immutable blockchain-based ledger. On April 1, 2022, the Company completed the acquisition of Transact Europe Holdings. Transact Europe Holdings is the holding company of TEU, which formally changed its name to RYVYL EU on December 16, 2022. RYVYL EU is an EU regulated electronic money institution headquartered in Sofia, Bulgaria. RYVYL EU is a Principal Level Member of Visa, a worldwide member of MasterCard, and a principal member of China UnionPay. In addition, RYVYL EU is part of the SEPA program, a payment system enabling cashless payments across continental Europe. RYVYL EU provides complete payment solutions by offering acquiring, issuing of prepaid cards and agent banking, serving hundreds of clients. With a global footprint, proprietary payment gateway, and technology platforms, RYVYL EU offers a comprehensive portfolio of services and decades of industry experience. 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 consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 2. Summary of Significant Accounting Policies Going Concern As further described in Note 17, Subsequent Events As a result of the developments described above and further described in Note 17, Subsequent Events ● acceleration of the Company’s business development efforts to drive volumes in diversified business verticals; ● the implementation of cost control measures to more effectively manage spending in the North America segment and right sizing the organization, where appropriate; ● repatriation of offshore profits from the Company’s European subsidiaries, whose continued accelerated growth and generation of positive cash flow have already provided, and will continue to provide, an immediate and viable short-term source of capital during this product transition; and ● a capital raise, which the Company intends to negotiate and consummate in the immediate term. Management has assessed that its intended plan is appropriate and sufficient to address the liquidity shortfall in its North America segment. However, there can be no guarantee that we will be successful in implementing our plan or in acquiring additional funding, that our projections of our future capital needs will prove accurate, or that any additional funding will be sufficient to continue our operations in the North America segment. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on current and past experience, to the extent that historical experience is predictive of future performance, and other assumptions that the Company believes are reasonable under the circumstances. The Company evaluates these estimates on an ongoing basis. Reclassification Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported financial position, results of operations or cash flows. Reverse Stock Split On September 6, 2023, the Company filed a certificate of amendment to its amended and restated certificate of incorporation with the Secretary of State of the State of Nevada to effect a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the Company’s shares of common stock, par value $0.001 per share (the “common stock”). Such amendment and ratio were previously approved by the board of directors. Under Nevada Revised Statutes Section 78.207, stockholder approval of the Reverse Stock Split was not required because (i) both the number of authorized shares of the common stock and the number of issued and outstanding shares of the common stock were proportionally reduced as a result of the Reverse Stock Split; (ii) the Reverse Stock Split did not adversely affect any other class of stock of the Company; and (iii) the Company did not pay money or issue scrip to stockholders who would otherwise be entitled to receive a fractional share as a result of the Reverse Stock Split. As a result of the Reverse Stock Split, which was effective September 6, 2023, every ten shares of the Company’s pre-reverse split outstanding common stock were combined and reclassified into one share of common stock. Proportionate voting rights and other rights of common stockholders were not affected by the Reverse Stock Split. Any fractional shares of common stock resulting from the Reverse Stock Split were rounded up to the nearest whole share. All stock options outstanding and common stock reserved for issuance under the Company’s equity incentive plans outstanding immediately prior to the Reverse Stock Split were adjusted by dividing the number of affected shares of common stock by ten and, as applicable, multiplying the exercise price by ten. All share numbers, share prices, exercise prices and per share amounts have been adjusted, on a retroactive basis to reflect this 1-for-10 Reverse Stock Split. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash on hand, cash on deposit with banks, and highly liquid debt investments with an original maturity of three months or less. Restricted cash substantially consists of cash received from gateways for merchant transactions processed, which has yet to be distributed to merchants, ISOs and their agents at the end of the period. Cash Due from Gateways, Net The Company generates the majority of its revenue from payment processing services provided to its merchant clients. When a 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. Cash due from gateways represent amounts due to the Company for transactions processed but not yet distributed by the gateways. The gateways have strict policies pertaining to the scheduling of the release of funds to merchants based on several criteria that include, but are not limited to, return and chargeback history, associated risk for the specific business vertical, average transaction amount, etc. To mitigate potential credit losses associated with these risks, the gateways use these policies to determine reserve requirements and a payment in arrears strategy. While reserve and payment in arrears restrictions are in effect for a merchant payout, the Company records the reserved amounts against cash due from the gateways until the restriction is released. Payment Processing Liabilities 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 large volumes of immutable transactional records in real time. In summary, 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, the Company uses proprietary, private ledger technology to verify every transaction conducted within the Company’s ecosystem. The verification of transaction data comes from trusted partners, all of whom have been extensively vetted by the Company. The Company facilitates all financial elements of its closed-loop ecosystem, and it acts as the administrator for all related accounts. Using the Company’s TrustGateway technology, the Company seeks authorization and settlement for each transaction from Gateways to the issuing bank responsible for the credit/debit card used in the transaction. When a gateway settles the transaction, the company’s TrustGateway technology composes a chain of blockchain instructions to the Company’s ledger manager system. When consumers use credit or debit cards to pay for transactions with merchants who use our ecosystem, the transaction starts with the consumer purchasing tokens from the Company. Tokens in this context are used to represent and track the value or number of credits the consumer has received in the blockchain. The issuance of tokens is accomplished when the Company loads 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 or debit card transaction to the consumer and merchant. While the Company’s blockchain ledger records transaction details instantaneously, the final cash settlement of each transaction can take days to weeks, depending upon contract terms between the Company and the gateways the Company uses, between the Company and its ISOs, and between the Company and/or its ISOs and merchants who use the Company’s services. In the case where the gateways have not yet remitted funds to the Company pertaining to transactions already processed, the Company records those amounts as cash due from gateways, net – a current asset. Concurrently, the Company records a portion of the cash due from gateways as revenue and the remaining balance, which is due to merchants and ISOs, as payment processing liabilities, net – a current liability. The balance included in payment processing liabilities, net in the consolidated balance sheets is equal to the sum of amounts due to merchants and ISOs related to the aforementioned unsettled transactions and the amounts due to merchants and ISOs on already settled transactions that these merchants and ISOs have not yet redeemed in the blockchain. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company generates the majority of its revenue from payment processing services. Payment processing services revenue is typically based on a percentage of the value of each transaction processed and/or upon fixed amounts specified per each transaction or service. The Company satisfies its performance obligations and, therefore, recognizes the processing fees as revenue at a point in time, upon the authorization of a merchant sale transaction. Research and Development Costs Research and development costs primarily consist of salaries and benefits for research and development personnel and outsourced contracted services, as well as associated supplies and materials. These costs are expensed as incurred. Accounts Receivable, Net Accounts receivable consist of amounts recorded in connection with the sale of payment processing terminals and related accessories. Accounts receivable are recorded at invoiced amounts, net of an allowance for credit losses, and do not bear interest. In accordance with Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments ( ASU 2016-13 ) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets primarily consist of inventory and deposits made by our European subsidiaries with credit card companies. Property and Equipment, Net Property and equipment primarily consist of computer equipment, leasehold improvements, and furniture and fixtures. Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed 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 lease term or the estimated useful life of the related asset. 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 Measurements The Company applies fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Fair value is defined as the price received to sell an asset or paid to transfer a liability in the principal market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820, Fair Value Measurements, ● Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. ● Level 2 – Observable inputs other than Level 1 quoted 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 cannot be directly corroborated by observable market data and that typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company measures its convertible note and related derivative liability at fair value. The Company classifies these liabilities as Level 3 of the fair value hierarchy, as fair values are estimated using models that use both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. Goodwill and Intangible Assets Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of the identifiable net tangible and intangible assets acquired. Goodwill is tested for impairment, at a minimum, on an annual basis at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The Company’s policy is to perform its annual impairment test of goodwill as of December 31 of each fiscal year. Based on our most recent annual impairment assessment, we determined that no adjustment to the carrying value of goodwill of our reporting unit as required. Intangible assets consist of acquired customer relationships and business intellectual properties. Intangible assets are amortized over their estimated useful lives, ranging from two to five years, using the straight-line method. No significant residual value is estimated for intangible assets. Impairment of Long-Lived Assets The Company evaluates property and equipment and finite-lived intangible assets for impairment whenever events or circumstances indicate that the carrying amounts of such assets may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated. If the carrying amount of the long–lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third–party independent appraisals, as considered necessary. Other than the charge-off recorded during the period ended December 31, 2022, for the entire consideration paid in connection with the contracted acquisition of the Sky Financial portfolio, the Company determined that the values of its long-lived assets as of December 31, 2023 and 2022, are supportable and recoverable. Leases The Company leases office space under non-cancellable operating leases with various expiration dates. The Company determines whether an arrangement is a lease for accounting purposes at contract inception. Operating leases are recorded as right-of-use (“ROU”) assets, which are included within noncurrent assets, and lease liabilities, which are included within current and noncurrent liabilities on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. ROU assets are based on the lease liability and are increased by prepaid lease payments and decreased by lease incentives received, where applicable. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate because the interest rate implicit in the Company’s leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate that the Company would pay to borrow on a collateralized basis with similar terms and payments as the lease, and in economic environments where the leased asset is located. Certain leases require the Company to pay taxes, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the ROU assets and lease liabilities. These lease costs are recognized as lease expenses when incurred. The Company evaluates ROU assets related to leases for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount of a ROU asset may not be recoverable. When a decision has been made to exit a lease prior to the contractual term or to sublease that space, the Company evaluates the asset for impairment and recognizes the associated impact to the ROU asset and related expense, if applicable. The evaluation is performed at the asset group level initially and when appropriate, at the lowest level of identifiable cash flows, which is at the individual lease level. Undiscounted cash flows expected to be generated by the related ROU assets are estimated over the ROU assets’ useful lives. If the evaluation indicates that the carrying amount of the ROU assets may not be recoverable, any potential impairment is measured based upon the fair value of the related ROU asset or asset group as determined by appropriate valuation techniques. Stock Based Compensation Stock-based compensation expense relates to restricted stock awards (“RSAs”) and stock options granted to employees and non-employee directors under the Company’s equity incentive plans, which are measured based on the grant-date fair value. The fair value of RSAs is determined by the closing price of the Company’s common stock on the grant date. The fair value of stock options is estimated on the date of grant using the Black-Scholes-Merton option valuation model. Generally, stock-based compensation expense is recorded on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur. 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 of or all the deferred tax assets will not be realized. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. We recognize an income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As of December 31, 2023 and 2022, we have valuation allowances which serve to reduce net deferred tax assets. Net Loss Per Share The Company’s basic net loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the period without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss available to common shareholders by the weighted-average number of shares of common stock outstanding, adjusted for the dilutive effect of all potential shares of common stock. For the years ended December 31, 2023 and 2022, the Company’s diluted net loss per share is the same as the basic net loss per share, since there are no common stock equivalents outstanding that would have a dilutive effect. Segment Reporting The Company determines its reportable segments based on how its CODM manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. Our CODM is our Chief Executive Officer and we have identified two reportable segments: North America and International. These segments represent the components of the Company for which separate financial information is available that is utilized on a regular basis by the CODM to assess segment performance, set strategic goals, and allocate the Company’s resources. The primary financial measure used by the CODM to evaluate the performance of its segments and allocate resources to them is operating income or (loss). Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In October 2021, the FASB issued ASU 2021-08, “ Business Combinations (ASC 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity s Own Equity ( ASU 2020-06 ) In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures In December 2023, the FASB issued ASU 2023-08, Intangibles Goodwill and Other Crypto Assets (Subtopic 350-60) Accounting for and Disclosure of Crypto Assets In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
Restatements of Previously Issu
Restatements of Previously Issued Consolidated Financial Statements | 12 Months Ended |
Dec. 31, 2023 | |
Prior Period Adjustment [Abstract] | |
Error Correction [Text Block] | 3. Restatements of Previously Issued Consolidated Financial Statements During the preparation of its 2022 Annual Report, the Company determined that it had not appropriately accounted for certain historical transactions under GAAP. In accordance with the SEC’s Staff Accounting Bulletin (“SAB”) 99, Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | 4. Acquisitions Logicquest Technology, Inc. In April 2023, the Company executed a purchase agreement for 99.4 million shares of restricted common stock of Logicquest Technology, Inc., a Nevada corporation (“Logicquest”) representing ownership of 99.1% of Logicquest, 48 shares of Series C Convertible Non-Redeemable Preferred Stock of Logicquest, and 10 shares of Series D Convertible Non-Redeemable Preferred Stock of Logicquest, in exchange for an aggregate purchase price of $225,000. Logicquest was a shell company (as defined in Rule 12b-2 of the Exchange Act) quoted on the Over-the-Counter Pink Open Market under the symbol “LOGQ” and is required to file reports and other information with the SEC pursuant to the Exchange Act. In June 2023, the Company merged the assets of Coyni, Inc., a wholly-owned subsidiary of the Company, and Logicquest, with Logicquest as the surviving entity. Subsequently, Logicquest changed its name to Coyni, Inc. (“Coyni PubCo”). In the fourth quarter of 2023, the Company amended the share purchase agreement to reflect 98 million shares of restricted common stock of Logicquest, 48 shares of Series C Convertible Non-Redeemable Preferred Stock of Logicquest, and 10 shares of Series D Convertible Non-Redeemable Preferred Stock of Logicquest, in exchange for an aggregate purchase price of $225,000. In accordance with ASC 805, Business Combinations, As previously disclosed, the Company originally intended to transfer the Coyni Platform assets, which are owned by the Company, into Coyni PubCo, and subsequently spin-off Coyni PubCo into a new publicly traded entity. However, we subsequently determined that it was in the best interest of the Company and its shareholders to retain the Coyni Platform at the Company to expand payment processing and banking-as-a-service solutions. As such, management no longer plans to pursue a spin-off of Coyni PubCo. Merchant Payment Solutions LLC In November 2021, the Company executed a term sheet to acquire certain Automated Clearing House (“ACH”) business of Merchant Payment Solutions LLC (“MPS”). Upon execution of the term sheet, the Company made a refundable earnest money deposit in the amount of $725,000 toward the total purchase price. After conducting due diligence, the Company elected to terminate the term sheet on April 21, 2023. In June 2023, the Company and MPS agreed to finalize a Portfolio Purchase Agreement (“Purchase Agreement”). Pursuant to the Purchase Agreement, the Company acquired the ACH portfolio of MPS for $725,000. In accordance with ASC 805, Business Combinations, Transact Europe Holdings On April 1, 2022, the Company acquired Transact Europe Holdings for $28.8 million (€26.0 million) in cash. Transact Europe Holdings is the holding company of TEU, which formally changed its name to RYVYL EU on December 16, 2022. RYVYL EU is an EU regulated electronic money institution headquartered in Sofia, Bulgaria. RYVYL EU is a Principal Level Member of Visa, a worldwide member of MasterCard, and a principal member of China UnionPay. In addition, RYVYL EU is part of the SEPA program, a payment system enabling cashless payments across continental Europe. RYVYL EU provides complete payment solutions by offering acquiring, issuing of prepaid cards and agent banking, serving hundreds of clients. With a global footprint, proprietary payment gateway, and technology platforms, RYVYL EU offers a comprehensive portfolio of services and decades of industry experience. The acquisition of Transact Europe Holdings meets the criteria to be accounted for as a business combination in accordance with ASC 805, Business Combinations The following summarizes the estimated fair values of the net assets acquired, which were recorded as of April 1, 2022 (dollars in thousands): Tangible assets (liabilities): Net assets $ 7,339 Intangible assets: Customer relationships 1,267 Goodwill 20,205 Total intangible assets 21,472 Total net assets acquired $ 28,811 Sky Financial & Intelligence On March 31, 2022, the Company contracted to acquire a portfolio of merchant accounts from Sky Financial for $18.1 million. The Company paid $16.0 million in cash in March 2022 and issued 500,000 shares of restricted common stock for the transaction on May 12, 2022. The entire amount tendered in both cash and stock was recorded as a customer relationships asset. As of the date of this filing, the Company has not received delivery of the acquired merchant list and the associated ISO management portal access. The Company charged off the entire purchase price in 2022. Also, during 2022, the Company suspended its reporting of revenue from the Sky Financial portfolio. The Company is actively pursuing its entitlements under the purchase agreement. See Note 15, Commitments and Contingencies |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 5. Property and Equipment, Net The following table details property and equipment, less accumulated depreciation (dollars in thousands): December 31, 2023 2022 Buildings $ - $ 1,360 Computers and equipment 276 247 Furniture and fixtures 152 149 Improvements 171 164 Total property and equipment 599 1,920 Less: accumulated depreciation (293 ) (224 ) Net property and equipment $ 306 $ 1,696 Depreciation expense was $148,150 and $141,566 for the years ended December 31, 2023 and 2022, respectively. During the year ended December 31, 2023, the Company’s subsidiary, Charge Savvy, sold a building it owned and recognized a gain on sale of $1.1 million. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Text Block Supplement [Abstract] | |
Goodwill Disclosure [Text Block] | 6. Goodwill The following table presents goodwill balances (dollars in thousands): December 31, 2023 2022 Acquisition of Northeast $ 2,793 $ 2,793 Acquisition of Charge Savvy 3,755 3,755 Acquisition of Transact Europe Holdings 20,205 20,205 Total goodwill $ 26,753 $ 26,753 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | 7. Intangible Assets, Net The following table details acquired intangible assets (dollars in thousands): December 31, 2023 December 31, 2022 Intangible Assets Amortization Period Cost Accumulated Amortization Net Cost Accumulated Amortization Net Customer relationships – North America 5 years $ 6,545 $ (2,991 ) $ 3,554 $ 5,820 $ (1,755 ) $ 4,065 Customer relationships - International 2 years 1,267 (1,109 ) 158 1,267 (475 ) 792 Business technology/IP 5 years 2,675 (1,328 ) 1,347 2,675 (793 ) 1,882 Total intangible assets $ 10,487 $ (5,428 ) $ 5,059 $ 9,762 $ (3,023 ) $ 6,739 Amortization expense was $2.4 million and $20.3 million for the years ended December 31, 2023 and 2022, respectively. In 2022, amortization expense included an $18.1 million charge related to the consideration paid for the contracted acquisition of the Sky Financial portfolio. The estimated future amortization expense related to intangible assets as of December 31, 2023 is as follows (dollars in thousands): Year Amount 2024 $ 2,002 2025 1,844 2026 992 2027 148 2028 73 Total $ 5,059 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract] | |
Other Liabilities Disclosure [Text Block] | 8. Accrued Liabilities The following table details the balance in accrued liabilities (dollars in thousands): December 31, 2023 2022 Accrued gateway fees $ 2,356 $ 681 Payroll related accruals 1,235 664 Accrued legal and professional fees 1,342 330 Accrued taxes 306 1,357 Other 516 318 Total accrued liabilities $ 5,755 $ 3,350 |
Long-Term Debt, Net
Long-Term Debt, Net | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 9. Long-Term Debt, Net The following table summarizes the Company’s debt as of December 31, 2023 and 2022 (dollars in thousands): December 31, 2023 2022 $100,000,000 8% senior convertible note, due April 5, 2025 $ 19,200 $ 85,450 Less: Unamortized debt discount (3,906 ) (24,349 ) Net carrying value 15,294 61,101 $149,900 Economic Injury Disaster Loan (EIDL), interest rate of 3.75%, due June 1, 2050 146 149 $500,000 EIDL, interest rate of 3.75%, due May 8, 2050 487 499 Total debt 15,927 61,749 Less: current portion (15 ) (14 ) Long-term debt, net $ 15,912 $ 61,735 Senior Convertible Note On November 8, 2021, the Company sold and issued, in a registered direct offering, an 8% Senior convertible note, originally due November 3, 2023, and subsequently extended to April 5, 2025, 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 us 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 Note (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. First Exchange Agreement On July 25, 2023, the Company entered into an Exchange Agreement (the “First Exchange Agreement”) under which the Company and the Investor agreed to exchange (the “Series A Exchanges”), in two separate exchanges, an aggregate of $22.703 million of the outstanding principal and interest under the Note for 15,000 shares of a newly authorized series of preferred stock of the Company designated as Series A Preferred Convertible Stock (the “Series A Preferred Stock”), the terms of which are set forth in a Certificate of Designations of Rights and Preferences of Series A Convertible Preferred Stock of RYVYL Inc. (the “Series A Certificate of Designations”), which the Company filed with the Nevada Secretary of State prior to the initial issuance of the Series A Preferred Stock. The Series A Preferred Stock is further described in Note 10, Convertible Preferred Stock On July 31, 2023, pursuant to the terms of the First Exchange Agreement, the Company closed the initial exchange (the “Initial Series A Exchange”) and issued 6,000 shares of Series A Preferred Stock in exchange for $4.297 million of the outstanding principal balance of the Note and $1.703 million of accrued interest. Additionally, upon satisfaction of all applicable closing conditions, including, without limitation, the Company having obtained any stockholder approval required for the consummation of the transactions and the issuance of the Common Stock issuable upon the conversion of all of the shares of Series A Preferred Stock (unless waived by the applicable other party), in the final exchange (the “Final Series A Exchange”), the parties agreed to exchange the remaining $16.703 million of outstanding principal balance subject to the Series A Exchanges for 9,000 shares of Series A Preferred Stock on a date mutually agreed to by the Company and the Investor. The Company determined that the parties’ obligation to exchange the remaining $16.703 million of outstanding principal balances subject to the Series A Exchanges for 9,000 shares of Series A Preferred Stock in the Final Series A Exchange represents an embedded conversion feature that does not require bifurcation and separate valuation because it would not meet the definition of a derivative, if freestanding, under ASC 815 as net settlement could not be achieved. The Company analyzed the changes made to the Note under the First Exchange Agreement under ASC 470-50 to determine if extinguishment accounting was applicable. Under ASC 470-50-40-10, a modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date is always considered substantial and requires extinguishment accounting. Since the First Exchange Agreement added a substantive conversion option, the Company determined that extinguishment accounting was applicable. In accordance with the extinguishment accounting guidance, the Company recorded a loss on extinguishment of $1.3 million which represents the difference between (a) the fair value of the modified Note and the 6,000 shares of Series A Preferred Stock issued in the Initial Series A Exchange and (b) the carrying amount of the Note and the fair value of the bifurcated embedded derivative immediately prior to giving effect to the First Exchange Agreement. Second Exchange Agreement Under the terms of the First Exchange Agreement, a final closing was to be held upon which the Investor was to exchange an additional $16.703 million of principal of the Note into 9,000 shares of Series A Preferred Stock (the “Unissued Series A Preferred Stock”) which shares of Unissued Series A Preferred Stock were convertible into shares of Common Stock, in accordance with the terms of the Series A Certificate of Designations. On November 27, 2023, the Company entered into an Exchange Agreement (the “Second Exchange Agreement”) with the Investor under which the Company and the Investor agreed to exchange (the “Series B Exchange”), (i) all of the existing shares of Series A Preferred Stock issued to the Investor in the Initial Series A Exchange, (ii) the right to exchange the shares of Unissued Series A Preferred Stock for an additional $16.703 million of principal of the Note, and (iii) $60.303 million of the outstanding principal under the Note for 55,000 shares of a newly authorized series of preferred stock of the Company designated as Series B Preferred Convertible Stock (the “Series B Preferred Stock”), the terms of which are set forth in a Certificate of Designations of Rights and Preferences of Series B Convertible Preferred Stock of RYVYL Inc. (the “Series B Certificate of Designations”), which the Company filed with the Nevada Secretary of State prior to the initial issuance of any shares of Series B Preferred Stock. The Series B Preferred Stock is further described in Note 10, Convertible Preferred Stock The Company analyzed the changes made to the Note under the Second Exchange Agreement under ASC 470-50 to determine if extinguishment accounting was applicable. Under ASC 470-50-40-10, a modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date is always considered substantial and requires extinguishment accounting. Since the Second Exchange Agreement eliminated a substantive conversion option (the parties’ obligation to exchange the remaining $16.703 million of outstanding principal balances subject to the Series A Exchanges for 9,000 shares of Series A Preferred Stock in the Final Series A Exchange), the Company determined that extinguishment accounting was applicable. In accordance with the extinguishment accounting guidance, the Company recorded a loss on extinguishment of $22.5 million which represents the difference between (a) the fair value of the modified Note, the fair value of the 55,000 shares of Series B Preferred Stock issued in the Series B Exchange, and the $3.0 million cash payment made to the Investor, and (b) the carrying amount of the Note, the fair value of the bifurcated embedded derivative immediately prior to giving effect to the Second Exchange Agreement, and the fair value of the existing shares of Series A Preferred Stock issued to the Investor in the Initial Series A Exchange forfeited to the Company by the Investor. On November 29, 2023, the Company closed the Series B Exchange, pursuant to which the Company issued to the Investor 55,000 shares of Series B Convertible Preferred Stock and paid the Investor a cash payment in the amount of $3.0 million, in exchange for 6,000 shares of Series A Convertible Preferred Stock previously issued to the Investor, the right to exchange the shares of Unissued Series A Preferred Stock for an additional $16.703 million of principal of the Note, and the reduction of principal of the Note in the aggregate amount of $60.303 million. During the year ended December 31, 2022, the Investor converted $8.55 million of the outstanding principal balance into 5,986,954 shares of the Company’s Common Stock at a weighted average conversion price of $1.43. In addition, the Company paid the Investor $6.9 million in January 2022 in exchange for cancellation of $6.0 million of the outstanding principal balance. During the year ended December 31, 2023, the Investor converted $1.65 million of the outstanding principal balance into 1,397,327 shares of the Company’s Common Stock at a weighted average conversion price of $1.18. Ranking The Note is the senior unsecured obligation of the Company and not the financial obligation 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 its subsidiaries. Maturity Date Under its original terms, unless earlier converted, or redeemed, the Note was to mature on November 3, 2023, the second anniversary of the issuance date, which we refer to herein as the “Maturity Date,” subject to the right of the Investor 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. As part of the Restructuring Agreement entered into with the Investor on August 16, 2022 (the “Restructuring Agreement”), the Company obtained a forbearance of the Maturity Date from November 5, 2023 to November 5, 2024. As part of the Second Exchange Agreement entered into with the Investor on November 27, 2023, the Company obtained a further forbearance of the Maturity Date from November 5, 2024 to April 5, 2025. Interest The Note bears interest at the rate of 8% per annum which (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 the holder elects to convert or redeem all or any portion of the 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 the 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 Subject to the satisfaction of certain equity conditions, the terms of the Restructuring Agreement require the holder to voluntarily convert certain interest payments when due under the Note at 95% of the lower of (i) the then in effect conversion price and (ii) the lowest volume weighted average price of our Common Stock during the five trading days immediately prior to such conversion. As part of the First Exchange Agreement, the Investor agreed to waive any interest that would otherwise accrue on the Note during the period commencing on April 1, 2023 through, and including, December 31, 2023. As part of the Second Exchange Agreement, the Investor agreed to extend the waiver of payment of interest under the Note through July 1, 2024. Late Charges The Company is 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 with a subsequent offering at a per share price less than the fixed conversion price then in effect. Pursuant to the original terms of the Note, since during the fiscal quarter ending March 31, 2022, the Company (i) failed to process at least $750 million in transaction volume or (ii) had revenue that was less than $12 million, the Note’s fixed conversion price then in effect exceeded the greater of (x) the Note's $1.67 floor and (y) 140% of the market price as of April 1, 2022 (the “Adjustment Measuring Price”), on April 1, 2022, the fixed conversion price automatically adjusted to the Adjustment Measuring Price. As part of the Restructuring Agreement, the Company agreed to allow for the conversion of up to $4.5 million of principal (together with any accrued and unpaid interest thereon) of the Note at a conversion price equal to the lesser of (i) $2.40 and (ii) 97.5% of the lower of (x) the then in effect conversion price and (y) the lowest volume weighted average price of our Common Stock during the five trading days immediately prior to such conversion. As part of the First Exchange Agreement, the Company agreed to allow for the conversion of up to an additional $9.0 million of principal (together with any accrued and unpaid interest thereon) of the Note at a conversion price equal to 97.5% of the lower of (x) the then in effect conversion price and (y) the lowest volume weighted average price of our Common Stock during the five trading days immediately prior to such conversion. 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, the 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,” which is equal to 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. Alternate Event of Default Optional Conversion If an event of default has occurred under the Note, the 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 the Note, except that any raise will only be effective upon 61 days’ prior notice to us. Change of Control Redemption Right In connection with a change of control of the Company, the 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 Note, and the equity value of the change of control consideration payable to the holder of our Common Stock underlying the Note. The equity value of our Common Stock underlying the Note 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 Note is calculated using the aggregate cash consideration and aggregate cash value of any non-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 Note. Rather, the Note contains standard and customary events of default including but not limited to: (i) the suspension from trading or the failure to list the Company’s 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, the holder may require us to redeem all or any portion of the Note (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 the Company’s Common Stock underlying the Note. The equity value of the Company’s Common Stock underlying the Note is calculated using the greatest closing sale price of the Company’s Common Stock on any trading day immediately preceding such event of default and the date the Company makes the entire payment required. Company Optional Redemption Rights At any time no event of default exists, the Company may redeem all, but not less than all, of the Note outstanding in cash all, or any portion, of the Note at a 5% redemption premium to the greater of the face value and the equity value of the Company’s Common Stock underlying the Note. The equity value of the Company’s Common Stock underlying the Note is calculated using the greatest closing sale price of the Company’s Common Stock on any trading day during the period commencing on the date immediately preceding such date the Company notifies the applicable holder of such redemption election and the date the Company makes the entire payment required. The following is a rollforward of the senior convertible note balance (dollars in thousands): Balance, December 31, 2020 $ - Convertible debentures issued 100,000 Derivative liability (21,580 ) Original issue discount of 16% (16,000 ) Placement fees and issuance costs (7,200 ) Amortization and write-off of debt discount 3,435 Balance, net of unamortized debt discount of $41,345 - December 31, 2021 58,655 Repayments and conversion (14,550 ) Amortization and write-off of debt discount 16,996 Balance, net of unamortized debt discount of $24,349 - December 31, 2022 61,101 Repayments and conversion (66,250 ) Amortization and write-off of debt discount 20,443 Balance, net of unamortized debt discount of $3,906 - December 31, 2023 $ 15,294 The Company recorded debt discount accretion expense of $13.1 million and $14.0 million for the years ended December 31, 2023, and 2022, respectively. The Company incurred other interest expense of $3.3 million and $8.2 million for the years ended December 31, 2023, and 2022, respectively. Derivative Liability The senior convertible note contains embedded derivatives representing certain conversion features, redemption rights, and contingent payments upon the occurrence of certain events of default. The Company determined that these embedded derivatives required bifurcation and separate valuation. The Company utilizes a binomial lattice model to value its bifurcated derivatives included in the note. ASC 815, Derivatives and Hedging The following is a rollforward of the derivative liability balance (dollars in thousands): Balance, December 31, 2021 $ 18,735 Change in fair value 2022 (18,480 ) Balance, December 31, 2022 255 Increase in derivative liability upon extinguishment of debt 6,312 Change in fair value 2023 (6,548 ) Balance, December 31, 2023 $ 19 Small Business Association CARES Act Loans On June 9, 2020, the Company entered into a 30-year loan agreement with the Small Business Association (“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. As of December 31, 2023, the loan is not in default. On May 8, 2020, Charge Savvy, a wholly-owned subsidiary of the Company, entered into a 27-year loan agreement with the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in the amount of $150,000. The loan bears interest at 3.75% per annum and required principal and interest payments of $731 beginning on May 8, 2021, which were subsequently deferred to November 8, 2022. On August 4, 2021, Charge Savvy was granted a loan increase in the amount of $350,000 on identical terms as the initial loan, for an aggregate loan amount of $500,000. Monthly principal and interest payments on the aggregate loan are $2,477 and began on November 8, 2022. Pursuant to the terms of Security Agreements executed in connection with this loan, the SBA was granted a security interest in all tangible and intangible personal property of Charge Savvy. As of December 31, 2023, the loan is not in default. |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Text Block Supplement [Abstract] | |
Preferred Stock [Text Block] | 10. Convertible Preferred Stock On July 31, 2023, the Company issued 6,000 shares of Series A Preferred Stock in exchange for $4.297 million of the outstanding principal balance of the 8% senior convertible note due April 5, 2025 and $1.703 million of accrued interest pursuant to the First Exchange Agreement entered into with the investor in the senior convertible note on July 25, 2023. On November 29, 2023, the existing shares of Series A Preferred Stock issued to the investor were forfeited to the Company by the investor and the Company issued 55,000 shares of Series B Preferred Stock, along with a cash payment of $3.0 million, in exchange for $60.303 million of the outstanding principal balance of the senior convertible note pursuant to the Second Exchange Agreement entered into with the investor on November 27, 2023. See Note 9, Long-Term Debt As of December 31, 2023, Preferred Stock consisted of the following (dollars in thousands): Preferred Shares Authorized Preferred Shares Issued and Outstanding Carrying Value Liquidation Preference Common Stock Issuable Upon Conversion Series A 15,000 - $ - $ - - Series B 55,000 55,000 73,631 63,250 17,684,888 Total Preferred Stock 70,000 55,000 $ 73,631 $ 63,250 17,684,888 The holders of the Preferred Stock have the following rights and preferences: Voting Dividends Liquidation In the event of the voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Series A Preferred Stock shall be entitled to receive in cash out of the assets of the Company, prior and in preference to any distribution of the proceeds of such liquidation event to the holders of common stock, an amount per share of Series A Preferred Stock equal to the greater of (A) 115% of the stated value of such share of Series A Preferred Stock plus all declared and unpaid dividends on such share of Series A Preferred Stock and (B) the amount per share such holder would receive if it converted such share of Series A Preferred Stock into common stock (at the Series A Alternate Conversion Price, as defined below, then in effect) immediately prior to the date of such payment. If at any time, there is more than one holder of the Series A Preferred Stock, and the proceeds thus distributed among the holders of the Series A Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire proceeds legally available for distribution shall be distributed ratably among the holders in proportion to the full preferential amount that each such holder is otherwise entitled to receive. Redemption Upon a change of control of the Company (as defined in the Series A Certificate of Designations), the holders of Series A Preferred Stock may require the Company to exchange their shares of Series A Preferred Stock for consideration, in the form of (I) the securities or other assets to which holders of shares of common stock are entitled to receive with respect to or in exchange for their shares of common stock in such change of control or (II) cash, equal to the greatest of (i) 115% of the stated value of such share of Series A Preferred Stock plus all declared and unpaid dividends on such share of Series A Preferred Stock, (ii) 115% of the greatest closing sale price of the number of shares of common stock into which such share of Series A Preferred Stock could be converted (at the Series A Alternate Conversion Price, as defined below, then in effect) during the period beginning on the date immediately preceding the earlier to occur of (a) the consummation of the applicable change of control and (b) the public announcement of such change of control and ending on the date such holder delivers notice to the Company of its election, and (iii) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of common stock that would be paid to the holder upon consummation of such change of control if it converted all of its shares of Series A Preferred Stock into common stock at the conversion price then in effect. Upon a change of control of the Company (as defined in the Company’s Certificate of Designations of Rights and Preferences of Series B Preferred Stock, or the “Series B Certificate of Designations”), the holders of Series B Preferred Stock may require the Company to exchange their shares of Series B Preferred Stock for consideration, in the form of the securities or other assets to which holders of shares of common stock are entitled to receive with respect to or in exchange for their shares of common stock in such change of control, equal to the greatest of (i) 115% of the stated value of such share of Series B Preferred Stock plus all declared and unpaid dividends on such share of Series B Preferred Stock, (ii) 115% of the greatest closing sale price of the number of shares of common stock into which such share of Series B Preferred Stock could be converted (at the Series B Alternate Conversion Price, as defined below, then in effect) during the period beginning on the date immediately preceding the earlier to occur of (a) the consummation of the applicable change of control and (b) the public announcement of such change of control and ending on the date such holder delivers notice to the Company of its election, and (iii) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of common stock that would be paid to the holder upon consummation of such change of control if it converted all of its shares of Series B Preferred Stock into common stock at the conversion price then in effect. Conversion Each share of Series A Preferred Stock is convertible, at the option of the holder, at any time after the date of issuance of such share, into shares of common stock either (i) at the fixed conversion price then in effect, which initially is $2.00 (subject to standard antidilution adjustments and adjustments as a result of subsequent issuances of securities where the effective price of the common stock is less than the then current fixed conversion price) or (ii) at the Series A Alternate Conversion Price, as defined below. The Series A Certificate of Designations also provides that in the event of certain “Triggering Events,” any holder may, at any time, convert any or all of such holder’s Series A Preferred Stock at a conversion rate equal to the product of (i) the Series A Alternate Conversion Price and (ii) 115% of the stated value of the Series A Preferred Stock subject to such conversion. “Triggering Events” include, among others, (i) a failure to timely deliver shares of common stock, upon a conversion, (ii) a suspension of trading on the principal trading market or the failure to be traded or listed on the principal market for five days or more, (iii) the failure to pay any dividend to the holders of Series A Preferred Stock when required, (iv) the failure to remove restrictive legends when required, (v) the Company’s default in payment of indebtedness in an aggregate amount of $2 million or more, (vi) proceedings for a bankruptcy, insolvency, reorganization or liquidation, which are not dismissed with 30 days, (vii) commencement of a voluntary bankruptcy proceeding, and (viii) final judgments against the Company for the payment of money in excess of $2 million. The “Series A Alternate Conversion Price” means the lower of (i) the applicable conversion price then in effect and (ii) the greater of (x) $0.24 and (y) 97.5% of the lowest volume weighted average price of the common stock during the five consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable conversion notice. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 11. Income Taxes The components of the provision for income taxes are as follows (dollars in thousands): Year Ended December 31, 2023 2022 Federal - - State 17 40 International 406 - Current income tax expense (benefit) 423 40 Deferred Federal - - State - - International (134 ) (48 ) Deferred income tax expense (benefit) (134 ) (48 ) Total tax expense Federal - - State 17 40 International 272 (48 ) Total 289 (8 ) Taxes on income vary from the statutory federal income tax rate applied to earnings before tax on income as follows (dollars in thousands): Year Ended December 31, 2023 2022 Statutory federal income tax rate of 21% applied to earnings before income taxes and extraordinary items $ (11,091 ) $ (10,341 ) State taxes - net of federal benefit 14 31 Meals and entertainment 10 14 Transactions expenses - 41 Gift 4 4 Stock compensation (ISOs) 189 - Changes in FV of derivative liability (1,374 ) (3,540 ) Derecognition expense on conversion of convertible debt 5,257 1,199 Valuation allowance 7,223 12,329 Others 212 116 Foreign rate difference (155 ) 139 Total $ 289 $ (8 ) 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 (dollars in thousands): Year Ended December 31, 2023 2022 State taxes - prior year $ 4 $ 4 Intangible assets 4,785 5,380 Fixed assets 2 - Allowance for credit losses 1,064 6,169 Capitalization of research and development Under Sec 174 2,012 1,121 Inventory reserve 24 - Contingent liability - 130 Stock compensation (RSA) 111 - Lease liability 962 270 Accrued expenses 73 - Other 70 - Net operating loss carryover 26,689 12,489 Total deferred tax assets 35,796 25,563 Deferred tax liabilities: Fixed assets - (5 ) Goodwill Tier 1 (161 ) (104 ) Intangible assets (13 ) (78 ) Right of use assets (987 ) (250 ) Total deferred tax liabilities (1,161 ) (437 ) Net deferred tax assets, non-current prior to valuation allowance 34,635 25,126 Valuation allowance (34,579 ) (25,204 ) Total net deferred taxes $ 56 $ (78 ) The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes As of December 31, 2023, the Company had Federal and State Net Operating Loss (“NOL”) carryforwards of $101.7 million and $71.3 million, respectively. Under the new tax law, the Federal NOL arising in tax years ending after December 31, 2017 will be carried forward indefinitely. The Company does not have pre-tax reform Federal NOL carryforwards as of December 31, 2023. NOL carryforwards arising from tax years ending after December 31, 2017, are $101.7 million. The State NOL carryforwards will begin to expire in 2038. As of December 31, 2023 and 2022, the Company maintained a full valuation allowance for NOL carryforward deferred tax assets. 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 2020 and thereafter, and state and local income tax returns are open for years 2019 and thereafter. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. For the tax years ended December 31, 2023 and 2022, the Company recognized no interest or penalties. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement, Disclosure [Abstract] | |
Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award [Table Text Block] | 12. Stock-Based Compensation Equity Incentive Plans The Company adopted the 2023 Equity Incentive Plan (“2023 Plan”) on November 2, 2023, which provides employees, directors, and consultants with opportunities to acquire the Company’s shares, or to receive monetary payments based on the value of such shares. Management has been determined that it is in the best interests of the Company to replace the 2020 Option Plan, the 2021 Option Plan, and the 2021 Restricted Stock Plan, with one plan, the 2023 Plan, pursuant to which the Company will be able to grant stock option awards, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The 2023 Plan provides for up to 1,098,262 shares of common stock. Grants made under the 2023 Plan will generally vest and become exercisable at various times from the grant dates. These awards will have such vesting or other provisions as may be established by the Board of Directors at the time of each award. Stock Option Activity A summary of stock option activity for the year ended December 31, 2023 is as follows (dollars in thousands): Shares Weighted Average Exercise Price Outstanding at January 1, 2023 31,963 $ 46.28 Granted 735,999 2.02 Exercised - N/A Cancelled/forfeited/expired (1,820 ) 50.39 Outstanding at December 31, 2023 766,142 3.76 Exercisable at December 31, 2023 296,812 $ 6.49 There were no stock option exercises during the year ended December 31, 2023. The aggregate intrinsic value for stock options exercised in the year ended December 31, 2022 was $0.04 million. The total weighted-average grant date fair value of options granted was $2.02 and $36.60 per share for the years ended December 31, 2023 and 2022, respectively. The grant-date fair values of the Company’s stock options awards were estimated using the following assumptions: Year Ended December 31, 2023 2022 Risk free interest rate 4.44 % 2.70 % Expected term (years) 5.0 5.0 Expected volatility 204% 93.2 % 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 was determined using the ‘simplified method,’ in accordance with SAB Topic 14, which presumes the expected term is equal to the midpoint between the vesting date and the end of the contractual term. Expected volatility was determined based on the weighted-average of historical volatility of the Company’s common stock. The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. As such, an expected dividend yield of zero percent was used. Restricted Stock Activity A summary of RSA activity for the year December 31, 2023 is as follows (dollars in thousands): Number of Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2023 52,545 $ 13.48 Granted 346,508 4.10 Vested (198,090 ) 5.71 Forfeited (11,070 ) 10.36 Unvested at December 31, 2023 189,893 $ 2.28 The total fair value of restricted shares that vested was $1.1 million and $1.7 million in the years ended December 31, 2023 and 2022, respectively. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Text Block [Abstract] | |
Lessor, Operating Leases [Text Block] | 13. Operating Leases The Company leases office space under operating leases at four locations in the United States (California, Illinois, Massachusetts, and Florida) and one location in the European Union (Sofia, Bulgaria). The Company had no finance lease obligations as of December 31, 2023. The Company’s operating lease expense totaled $1.1 million and $0.8 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the weighted-average remaining lease term was 4.6 years and the weighted average discount rate was 11.0%. Future minimum lease payments under our operating leases and reconciliation to the operating lease liability as of December 31, 2023, are as follows (in thousands): Year Ending December 31, Total 2024 $ 1,102 2025 1,161 2026 1,329 2027 1,046 2028 1,041 Total lease payments 5,679 Less: imputed interest (1,267 ) Present value of total lease payments 4,412 Less: current portion (692 ) Long-term lease liabilities $ 3,720 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 14. Related Party Transactions PrivCo The Company repurchased, in two separate repurchase transactions each consisting of 100,000 shares of common stock, an aggregate of 200,000 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 100,000 shares for a price per share of $55.90 (for total proceeds to PrivCo of $5,590,000) (the “First Repurchase”) and 100,000 shares for a price per share of $8.20 (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. As of December 31, 2023 and 2022, there were 100,525 and 105,417 shares available, respectively, of the 200,000 shares of common stock under the aforementioned transactions. 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, 2023 and 2022. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 15. Commitments and Contingencies From time-to-time, the Company is involved in 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, however, the amount cannot be reasonably estimated. 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. The following is a summary of our current outstanding litigation. Note that references to GreenBox POS are for historical purposes. GreenBox POS changed its name to RYVYL Inc. on October 13, 2022. ● The Good People Farms, LLC (“TGPF”) - TGPF initiated an arbitration in the American Arbitration Association (“AAA”) on or about April 20, 2020, against the Company, Fredi Nisan, Ben Errez, MTrac Tech Corp., Vanessa Luna, and Jason LeBlanc (the “TGPF Defendants”). The complaint generally alleged that the TGPF Defendants improperly breached contracts and withheld funds. The action sought damages, including interest, an injunction, and costs of suit incurred. On January 15, 2021, the Company filed a counterclaim in AAA 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 complaint generally alleged that TGPF fraudulently submitted transactions for processing that were not permissible within the terms of service and sought damages, including interest and costs of suit incurred. The individuals were dismissed from the arbitration. The parties attended binding arbitration in April 2023, and subsequently entered into a confidential settlement agreement. ● 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, the Company filed a complaint against its former Chief Operating Officer Vanessa Luna, Luna Consultant Group, LLC and John Does 1 through 50 in San Diego Superior Court (the “Company Filing”). The Company is alleging that Ms. Luna abused her position for additional compensation by failing to follow proper protocols and shirked her responsibilities by scheming and maintaining alternative employment. The action seeks damages, including interest and costs of suit incurred. On November 10, 2022, Ms. Luna filed her own complaint against the Company and Fredi Nisan in San Diego Superior Court (the “Luna Filing”). Ms. Luna alleges that Mr. Nisan used contract negotiations to coerce her, that the Company improperly coded transactions and misled investors, and that when her concerns were reported to management, she was wrongfully terminated, resulting in a number of claims. Ms. Luna is seeking damages including compensatory damages, unpaid wages (past and future), loss of wages and benefits (past and future), expected damages, and other damages to be proven at trial. The Company denies all allegations. 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 San Diego Superior Court consolidated the Company Filing and Luna Filing into a single proceeding, RYVYL v. Luna, on August 4, 2023. The parties are currently in the discovery phase. ● On December 12, 2022, Jacqueline Dollar (aka Jacqueline Reynolds), former Chief Marketing Officer of the Company, filed a complaint against the Company, Fredi Nisan, and Does 1-20 in San Diego Superior Court. Ms. Dollar is alleging she was undercompensated compared to her male counterparts and retaliated against after raising concerns to management resulting in sex discrimination in violation of the California Fair Employment and Housing Act (“FEHA”) and failure to prevent discrimination in violation of FEHA. Ms. Dollar is also claiming intentional infliction of emotional distress. 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. The parties are currently in the discovery phase. ● 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 several defendants, including the Company and certain of our current and former directors and officers (the “Cullen 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 complaint generally alleges that the Cullen Defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act by making false and/or misleading statements regarding the Company’s financial controls, performance and prospects. The action seeks damages, including interest, and the award of reasonable fees and costs to the putative class. The Company denies all allegations of liability and intends to vigorously defend against all claims. However, given the preliminary stage of the lawsuit, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this action. On June 30, 2023, the plaintiff filed an amended complaint. All defendants filed motions to dismiss the amended complaint on August 14, 2023. On March 1, 2024, the Court issued an order granting in part and denying in part defendants’ motions to dismiss, which included dismissing all Securities Act claims and narrowing the potential class period. The Court’s order allows the plaintiff to file an amended complaint by April 1, 2024 if he wishes to do so. ● On June 22, 2023, a shareholder derivative complaint was filed in the United States District Court for the Southern District of California against certain of the Company’s current and/or former officers and directors (the “Hertel Defendants”), Christy Hertel, derivatively on behalf of RYVYL Inc., f/k/a Greenbox POS v. Ben Errez et al., Case No. 3:23-CV-01165-GPC-SBC. On August 4, 2023, a second shareholder derivative complaint was filed in the United States District Court for the Southern District of California against the Hertel Defendants, Marcus Gazaway, derivatively on behalf of RYVYL Inc., f/k/a Greenbox POS v. Ben Errez et al., Case No. 3:23-CV-01425-LAB-BLM. Both derivative complaints generally allege that the Hertel Defendants failed to implement adequate internal controls that would prevent false and misleading financial information from being published by the Company and that controlling shareholders participated in overpayment misconduct resulting in violations of Sections 10(b), 14(a) and 20 of the Exchange Act and breached their fiduciary duties and, purportedly on behalf of the Company. The complaint seeks damages and contribution from the Hertel Defendants and a direction that the Company and the Hertel Defendants take actions to reform and improve corporate governance and internal procedures to comply with applicable laws. The Hertel Defendants deny all allegations of liability and intend to vigorously defend against all claims. However, given the preliminary stage of the lawsuits, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome of either case at this time. On March 18, 2024, the parties filed a joint motion for an order consolidating the Hertel and Gazaway cases under the caption In re RYVYL Inc. Derivative Litigation, Lead Case No. 3:23-CV-01165-GPC-SBC (S.D. Cal.). The joint motion proposes that the parties shall meet and confer regarding the case schedule, including setting a deadline for the Hertel Defendants to respond to the operative complaint. ● On October 1, 2023, the Company filed a demand for arbitration against Sky Financial with the American Arbitration Association in San Diego, California (the “Arbitration”). In the Arbitration, the Company seeks to recover for breach of the Asset Purchase Agreement, dated as of March 30, 2022 (the “2022 Agreement”), between Sky Financial and the Company, for Sky Financial’s failure to perform its obligations under the 2022 Agreement. Additionally, to the extent the Company’s 2019 Asset Purchase Agreement with Sky Financial is implicated by Sky Financial’s failure to perform its obligations under the 2022 Agreement, either directly or through the incorporation by reference of the 2019 Agreement into the 2022 Agreement, the Company is also alleging Sky Financial has breached the 2019 Agreement. On October 2, 2023, the Company filed a complaint against Sky Financial in San Diego Superior Court asserting the same claims asserted in the Arbitration, solely to toll any applicable statutes of limitations pending the Arbitration and, if necessary, provide jurisdiction for the court to compel arbitration. The action seeks damages, including interest and costs of suit incurred. The parties have agreed to proceed in the Arbitration and have stipulated to a stay of the San Diego Superior Court action pending the Arbitration. ● On July 6, 2022, the Company’s subsidiary, RYVYL EU (formerly known as Transact Europe OOD), received a notary invitation from Satya Consulting PTE Limited (“Satya”) filed in Bulgaria. In the filed claim, Satya alleges nonpayment of its fee in the amount of EUR 900,000, to which statutory default interest is to be added, for failure of payment under the Company’s stock purchase agreement for Transact Europe Holdings OOD. RYVYL EU has retained Bulgarian counsel to assist in the defense of the asserted claim and denies all allegations. As RYVYL EU cannot predict the outcome of the matter, the probability of an outcome cannot be determined. RYVYL EU intends to vigorously defend against all claims. ● On January 2, 2024, the Company filed a Statement of Claim against Chessa Sabourin in the Ontario Superior Court of Justice. Case No. CV-24-00712190-0000. The Company seeks to recover funds unlawfully held by Sabourin, or in the alternative, damages in the equivalent amount. Additionally, punitive and exemplary damages. In September 2023, the Company mistakenly sent funds to Ms. Sabourin and attempted to reverse or recall the transfers but was unable to do so. To date, Ms. Sabourin has failed and/or refused to return the funds mistakenly sent to her. Given the preliminary stage of the lawsuit, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this action. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 16. Segment Reporting The Company reports its segments to reflect the manner in which its CODM reviews and assesses performance. The primary financial measure used by the CODM to evaluate the performance of its segments and allocate resources to them is operating income or (loss). Accordingly, the Company has two reportable segments: North America and International. The following tables present reportable segment operational data (dollars in thousands): Year Ended December 31, 2023 2022 Revenue North America $ 48,938 $ 28,613 International 16,931 4,296 Total revenue $ 65,869 $ 32,909 Income (loss) from operations North America $ (14,121 ) $ (36,517 ) International 1,819 (1,321 ) Total income (loss) from operations $ (12,302 ) $ (37,838 ) Depreciation and amortization North America $ 1,907 $ 19,938 International 646 979 Total depreciation and amortization $ 2,553 $ 20,917 Net income (loss) North America $ (54,170 ) $ (47,969 ) International 1,069 (1,267 ) Total net income (loss) $ (53,101 ) $ (49,236 ) Assets by reportable segment were not included, as that information is not reviewed by the CODM to make operating decisions or allocate resources. Assets are reviewed on a consolidated basis. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 17. Subsequent Events In February 2024, the Company transitioned its QuickCard product in North America away from terminal-based to app-based processing. This transition coincided with a change in our banking partner that was prompted by recent changes in the compliance environment and banking regulations. The unforeseen abrupt nature of the transition and slow initial adoption of the app-based product has led to a significant decline in processing volume in North America. This in turn has adversely affected revenue in the North America segment and, as a result, management anticipates consolidated revenue for the first quarter of 2024 will be down sequentially by approximately 30 percent overall, which is primarily attributable to this product transition. As a result of the developments described above, the Company’s liquidity in its North America segment has been adversely impacted in the short term. In direct response, management has devised a plan, which it has assessed as appropriate and sufficient to address the liquidity shortfall in the North America segment. Refer to the “Going Concern” subsection within Note 2, Summary of Significant Accounting Policies, |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Substantial Doubt about Going Concern [Text Block] | Going Concern As further described in Note 17, Subsequent Events As a result of the developments described above and further described in Note 17, Subsequent Events ● acceleration of the Company’s business development efforts to drive volumes in diversified business verticals; ● the implementation of cost control measures to more effectively manage spending in the North America segment and right sizing the organization, where appropriate; ● repatriation of offshore profits from the Company’s European subsidiaries, whose continued accelerated growth and generation of positive cash flow have already provided, and will continue to provide, an immediate and viable short-term source of capital during this product transition; and ● a capital raise, which the Company intends to negotiate and consummate in the immediate term. Management has assessed that its intended plan is appropriate and sufficient to address the liquidity shortfall in its North America segment. However, there can be no guarantee that we will be successful in implementing our plan or in acquiring additional funding, that our projections of our future capital needs will prove accurate, or that any additional funding will be sufficient to continue our operations in the North America segment. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on current and past experience, to the extent that historical experience is predictive of future performance, and other assumptions that the Company believes are reasonable under the circumstances. The Company evaluates these estimates on an ongoing basis. |
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 financial position, results of operations or cash flows. |
Reverse Stock Split [Policy Text Block] | Reverse Stock Split On September 6, 2023, the Company filed a certificate of amendment to its amended and restated certificate of incorporation with the Secretary of State of the State of Nevada to effect a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the Company’s shares of common stock, par value $0.001 per share (the “common stock”). Such amendment and ratio were previously approved by the board of directors. Under Nevada Revised Statutes Section 78.207, stockholder approval of the Reverse Stock Split was not required because (i) both the number of authorized shares of the common stock and the number of issued and outstanding shares of the common stock were proportionally reduced as a result of the Reverse Stock Split; (ii) the Reverse Stock Split did not adversely affect any other class of stock of the Company; and (iii) the Company did not pay money or issue scrip to stockholders who would otherwise be entitled to receive a fractional share as a result of the Reverse Stock Split. As a result of the Reverse Stock Split, which was effective September 6, 2023, every ten shares of the Company’s pre-reverse split outstanding common stock were combined and reclassified into one share of common stock. Proportionate voting rights and other rights of common stockholders were not affected by the Reverse Stock Split. Any fractional shares of common stock resulting from the Reverse Stock Split were rounded up to the nearest whole share. All stock options outstanding and common stock reserved for issuance under the Company’s equity incentive plans outstanding immediately prior to the Reverse Stock Split were adjusted by dividing the number of affected shares of common stock by ten and, as applicable, multiplying the exercise price by ten. All share numbers, share prices, exercise prices and per share amounts have been adjusted, on a retroactive basis to reflect this 1-for-10 Reverse Stock Split. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash on hand, cash on deposit with banks, and highly liquid debt investments with an original maturity of three months or less. Restricted cash substantially consists of cash received from gateways for merchant transactions processed, which has yet to be distributed to merchants, ISOs and their agents at the end of the period. |
Receivable [Policy Text Block] | Cash Due from Gateways, Net The Company generates the majority of its revenue from payment processing services provided to its merchant clients. When a 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. Cash due from gateways represent amounts due to the Company for transactions processed but not yet distributed by the gateways. The gateways have strict policies pertaining to the scheduling of the release of funds to merchants based on several criteria that include, but are not limited to, return and chargeback history, associated risk for the specific business vertical, average transaction amount, etc. To mitigate potential credit losses associated with these risks, the gateways use these policies to determine reserve requirements and a payment in arrears strategy. While reserve and payment in arrears restrictions are in effect for a merchant payout, the Company records the reserved amounts against cash due from the gateways until the restriction is released. |
Payment Processing Liabilities [Policy Text Block] | Payment Processing Liabilities 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 large volumes of immutable transactional records in real time. In summary, 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, the Company uses proprietary, private ledger technology to verify every transaction conducted within the Company’s ecosystem. The verification of transaction data comes from trusted partners, all of whom have been extensively vetted by the Company. The Company facilitates all financial elements of its closed-loop ecosystem, and it acts as the administrator for all related accounts. Using the Company’s TrustGateway technology, the Company seeks authorization and settlement for each transaction from Gateways to the issuing bank responsible for the credit/debit card used in the transaction. When a gateway settles the transaction, the company’s TrustGateway technology composes a chain of blockchain instructions to the Company’s ledger manager system. When consumers use credit or debit cards to pay for transactions with merchants who use our ecosystem, the transaction starts with the consumer purchasing tokens from the Company. Tokens in this context are used to represent and track the value or number of credits the consumer has received in the blockchain. The issuance of tokens is accomplished when the Company loads 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 or debit card transaction to the consumer and merchant. While the Company’s blockchain ledger records transaction details instantaneously, the final cash settlement of each transaction can take days to weeks, depending upon contract terms between the Company and the gateways the Company uses, between the Company and its ISOs, and between the Company and/or its ISOs and merchants who use the Company’s services. In the case where the gateways have not yet remitted funds to the Company pertaining to transactions already processed, the Company records those amounts as cash due from gateways, net – a current asset. Concurrently, the Company records a portion of the cash due from gateways as revenue and the remaining balance, which is due to merchants and ISOs, as payment processing liabilities, net – a current liability. The balance included in payment processing liabilities, net in the consolidated balance sheets is equal to the sum of amounts due to merchants and ISOs related to the aforementioned unsettled transactions and the amounts due to merchants and ISOs on already settled transactions that these merchants and ISOs have not yet redeemed in the blockchain. |
Revenue [Policy Text Block] | Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company generates the majority of its revenue from payment processing services. Payment processing services revenue is typically based on a percentage of the value of each transaction processed and/or upon fixed amounts specified per each transaction or service. The Company satisfies its performance obligations and, therefore, recognizes the processing fees as revenue at a point in time, upon the authorization of a merchant sale transaction. |
Accounts Receivable [Policy Text Block] | Accounts Receivable, Net Accounts receivable consist of amounts recorded in connection with the sale of payment processing terminals and related accessories. Accounts receivable are recorded at invoiced amounts, net of an allowance for credit losses, and do not bear interest. In accordance with Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments ( ASU 2016-13 ) |
Prepaid Expenses, Policy [Policy Text Block] | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets primarily consist of inventory and deposits made by our European subsidiaries with credit card companies. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment, Net Property and equipment primarily consist of computer equipment, leasehold improvements, and furniture and fixtures. Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is computed 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 lease term or the estimated useful life of the related asset. 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 Measurements The Company applies fair value accounting for assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Fair value is defined as the price received to sell an asset or paid to transfer a liability in the principal market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820, Fair Value Measurements, ● Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. ● Level 2 – Observable inputs other than Level 1 quoted 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 cannot be directly corroborated by observable market data and that typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company measures its convertible note and related derivative liability at fair value. The Company classifies these liabilities as Level 3 of the fair value hierarchy, as fair values are estimated using models that use both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill and Intangible Assets Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of the identifiable net tangible and intangible assets acquired. Goodwill is tested for impairment, at a minimum, on an annual basis at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The Company’s policy is to perform its annual impairment test of goodwill as of December 31 of each fiscal year. Based on our most recent annual impairment assessment, we determined that no adjustment to the carrying value of goodwill of our reporting unit as required. Intangible assets consist of acquired customer relationships and business intellectual properties. Intangible assets are amortized over their estimated useful lives, ranging from two to five years, using the straight-line method. No significant residual value is estimated for intangible assets. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets The Company evaluates property and equipment and finite-lived intangible assets for impairment whenever events or circumstances indicate that the carrying amounts of such assets may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated. If the carrying amount of the long–lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third–party independent appraisals, as considered necessary. Other than the charge-off recorded during the period ended December 31, 2022, for the entire consideration paid in connection with the contracted acquisition of the Sky Financial portfolio, the Company determined that the values of its long-lived assets as of December 31, 2023 and 2022, are supportable and recoverable. |
Lessee, Leases [Policy Text Block] | Leases The Company leases office space under non-cancellable operating leases with various expiration dates. The Company determines whether an arrangement is a lease for accounting purposes at contract inception. Operating leases are recorded as right-of-use (“ROU”) assets, which are included within noncurrent assets, and lease liabilities, which are included within current and noncurrent liabilities on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. ROU assets are based on the lease liability and are increased by prepaid lease payments and decreased by lease incentives received, where applicable. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate because the interest rate implicit in the Company’s leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate that the Company would pay to borrow on a collateralized basis with similar terms and payments as the lease, and in economic environments where the leased asset is located. Certain leases require the Company to pay taxes, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the ROU assets and lease liabilities. These lease costs are recognized as lease expenses when incurred. The Company evaluates ROU assets related to leases for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount of a ROU asset may not be recoverable. When a decision has been made to exit a lease prior to the contractual term or to sublease that space, the Company evaluates the asset for impairment and recognizes the associated impact to the ROU asset and related expense, if applicable. The evaluation is performed at the asset group level initially and when appropriate, at the lowest level of identifiable cash flows, which is at the individual lease level. Undiscounted cash flows expected to be generated by the related ROU assets are estimated over the ROU assets’ useful lives. If the evaluation indicates that the carrying amount of the ROU assets may not be recoverable, any potential impairment is measured based upon the fair value of the related ROU asset or asset group as determined by appropriate valuation techniques. |
Share-Based Payment Arrangement [Policy Text Block] | Stock Based Compensation Stock-based compensation expense relates to restricted stock awards (“RSAs”) and stock options granted to employees and non-employee directors under the Company’s equity incentive plans, which are measured based on the grant-date fair value. The fair value of RSAs is determined by the closing price of the Company’s common stock on the grant date. The fair value of stock options is estimated on the date of grant using the Black-Scholes-Merton option valuation model. Generally, stock-based compensation expense is recorded on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur. |
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 of or all the deferred tax assets will not be realized. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. We recognize an income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As of December 31, 2023 and 2022, we have valuation allowances which serve to reduce net deferred tax assets. |
Earnings Per Share, Policy [Policy Text Block] | Net Loss Per Share The Company’s basic net loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the period without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss available to common shareholders by the weighted-average number of shares of common stock outstanding, adjusted for the dilutive effect of all potential shares of common stock. For the years ended December 31, 2023 and 2022, the Company’s diluted net loss per share is the same as the basic net loss per share, since there are no common stock equivalents outstanding that would have a dilutive effect. |
Segment Reporting, Policy [Policy Text Block] | Segment Reporting The Company determines its reportable segments based on how its CODM manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. Our CODM is our Chief Executive Officer and we have identified two reportable segments: North America and International. These segments represent the components of the Company for which separate financial information is available that is utilized on a regular basis by the CODM to assess segment performance, set strategic goals, and allocate the Company’s resources. The primary financial measure used by the CODM to evaluate the performance of its segments and allocate resources to them is operating income or (loss). |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In October 2021, the FASB issued ASU 2021-08, “ Business Combinations (ASC 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity s Own Equity ( ASU 2020-06 ) In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures In December 2023, the FASB issued ASU 2023-08, Intangibles Goodwill and Other Crypto Assets (Subtopic 350-60) Accounting for and Disclosure of Crypto Assets In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 were recorded as of April 1, 2022 (dollars in thousands): Tangible assets (liabilities): Net assets $ 7,339 Intangible assets: Customer relationships 1,267 Goodwill 20,205 Total intangible assets 21,472 Total net assets acquired $ 28,811 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | The following table details property and equipment, less accumulated depreciation (dollars in thousands): December 31, 2023 2022 Buildings $ - $ 1,360 Computers and equipment 276 247 Furniture and fixtures 152 149 Improvements 171 164 Total property and equipment 599 1,920 Less: accumulated depreciation (293 ) (224 ) Net property and equipment $ 306 $ 1,696 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Goodwill [Table Text Block] | The following table presents goodwill balances (dollars in thousands): December 31, 2023 2022 Acquisition of Northeast $ 2,793 $ 2,793 Acquisition of Charge Savvy 3,755 3,755 Acquisition of Transact Europe Holdings 20,205 20,205 Total goodwill $ 26,753 $ 26,753 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The following table details acquired intangible assets (dollars in thousands): December 31, 2023 December 31, 2022 Intangible Assets Amortization Period Cost Accumulated Amortization Net Cost Accumulated Amortization Net Customer relationships – North America 5 years $ 6,545 $ (2,991 ) $ 3,554 $ 5,820 $ (1,755 ) $ 4,065 Customer relationships - International 2 years 1,267 (1,109 ) 158 1,267 (475 ) 792 Business technology/IP 5 years 2,675 (1,328 ) 1,347 2,675 (793 ) 1,882 Total intangible assets $ 10,487 $ (5,428 ) $ 5,059 $ 9,762 $ (3,023 ) $ 6,739 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated future amortization expense related to intangible assets as of December 31, 2023 is as follows (dollars in thousands): Year Amount 2024 $ 2,002 2025 1,844 2026 992 2027 148 2028 73 Total $ 5,059 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | The following table details the balance in accrued liabilities (dollars in thousands): December 31, 2023 2022 Accrued gateway fees $ 2,356 $ 681 Payroll related accruals 1,235 664 Accrued legal and professional fees 1,342 330 Accrued taxes 306 1,357 Other 516 318 Total accrued liabilities $ 5,755 $ 3,350 |
Long-Term Debt, Net (Tables)
Long-Term Debt, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | The following table summarizes the Company’s debt as of December 31, 2023 and 2022 (dollars in thousands): December 31, 2023 2022 $100,000,000 8% senior convertible note, due April 5, 2025 $ 19,200 $ 85,450 Less: Unamortized debt discount (3,906 ) (24,349 ) Net carrying value 15,294 61,101 $149,900 Economic Injury Disaster Loan (EIDL), interest rate of 3.75%, due June 1, 2050 146 149 $500,000 EIDL, interest rate of 3.75%, due May 8, 2050 487 499 Total debt 15,927 61,749 Less: current portion (15 ) (14 ) Long-term debt, net $ 15,912 $ 61,735 |
Convertible Debt [Table Text Block] | The following is a rollforward of the senior convertible note balance (dollars in thousands): Balance, December 31, 2020 $ - Convertible debentures issued 100,000 Derivative liability (21,580 ) Original issue discount of 16% (16,000 ) Placement fees and issuance costs (7,200 ) Amortization and write-off of debt discount 3,435 Balance, net of unamortized debt discount of $41,345 - December 31, 2021 58,655 Repayments and conversion (14,550 ) Amortization and write-off of debt discount 16,996 Balance, net of unamortized debt discount of $24,349 - December 31, 2022 61,101 Repayments and conversion (66,250 ) Amortization and write-off of debt discount 20,443 Balance, net of unamortized debt discount of $3,906 - December 31, 2023 $ 15,294 |
Schedule of Derivative Liabilities at Fair Value [Table Text Block] | The following is a rollforward of the derivative liability balance (dollars in thousands): Balance, December 31, 2021 $ 18,735 Change in fair value 2022 (18,480 ) Balance, December 31, 2022 255 Increase in derivative liability upon extinguishment of debt 6,312 Change in fair value 2023 (6,548 ) Balance, December 31, 2023 $ 19 |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Stock by Class [Table Text Block] | As of December 31, 2023, Preferred Stock consisted of the following (dollars in thousands): Preferred Shares Authorized Preferred Shares Issued and Outstanding Carrying Value Liquidation Preference Common Stock Issuable Upon Conversion Series A 15,000 - $ - $ - - Series B 55,000 55,000 73,631 63,250 17,684,888 Total Preferred Stock 70,000 55,000 $ 73,631 $ 63,250 17,684,888 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 (dollars in thousands): Year Ended December 31, 2023 2022 Federal - - State 17 40 International 406 - Current income tax expense (benefit) 423 40 Deferred Federal - - State - - International (134 ) (48 ) Deferred income tax expense (benefit) (134 ) (48 ) Total tax expense Federal - - State 17 40 International 272 (48 ) Total 289 (8 ) |
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 (dollars in thousands): Year Ended December 31, 2023 2022 Statutory federal income tax rate of 21% applied to earnings before income taxes and extraordinary items $ (11,091 ) $ (10,341 ) State taxes - net of federal benefit 14 31 Meals and entertainment 10 14 Transactions expenses - 41 Gift 4 4 Stock compensation (ISOs) 189 - Changes in FV of derivative liability (1,374 ) (3,540 ) Derecognition expense on conversion of convertible debt 5,257 1,199 Valuation allowance 7,223 12,329 Others 212 116 Foreign rate difference (155 ) 139 Total $ 289 $ (8 ) |
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 (dollars in thousands): Year Ended December 31, 2023 2022 State taxes - prior year $ 4 $ 4 Intangible assets 4,785 5,380 Fixed assets 2 - Allowance for credit losses 1,064 6,169 Capitalization of research and development Under Sec 174 2,012 1,121 Inventory reserve 24 - Contingent liability - 130 Stock compensation (RSA) 111 - Lease liability 962 270 Accrued expenses 73 - Other 70 - Net operating loss carryover 26,689 12,489 Total deferred tax assets 35,796 25,563 Deferred tax liabilities: Fixed assets - (5 ) Goodwill Tier 1 (161 ) (104 ) Intangible assets (13 ) (78 ) Right of use assets (987 ) (250 ) Total deferred tax liabilities (1,161 ) (437 ) Net deferred tax assets, non-current prior to valuation allowance 34,635 25,126 Valuation allowance (34,579 ) (25,204 ) Total net deferred taxes $ 56 $ (78 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement, Disclosure [Abstract] | |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | A summary of stock option activity for the year ended December 31, 2023 is as follows (dollars in thousands): Shares Weighted Average Exercise Price Outstanding at January 1, 2023 31,963 $ 46.28 Granted 735,999 2.02 Exercised - N/A Cancelled/forfeited/expired (1,820 ) 50.39 Outstanding at December 31, 2023 766,142 3.76 Exercisable at December 31, 2023 296,812 $ 6.49 |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The grant-date fair values of the Company’s stock options awards were estimated using the following assumptions: Year Ended December 31, 2023 2022 Risk free interest rate 4.44 % 2.70 % Expected term (years) 5.0 5.0 Expected volatility 204% 93.2 % Expected dividend yield 0 % 0 % |
Nonvested Restricted Stock Shares Activity [Table Text Block] | A summary of RSA activity for the year December 31, 2023 is as follows (dollars in thousands): Number of Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2023 52,545 $ 13.48 Granted 346,508 4.10 Vested (198,090 ) 5.71 Forfeited (11,070 ) 10.36 Unvested at December 31, 2023 189,893 $ 2.28 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block] | Year Ending December 31, Total 2024 $ 1,102 2025 1,161 2026 1,329 2027 1,046 2028 1,041 Total lease payments 5,679 Less: imputed interest (1,267 ) Present value of total lease payments 4,412 Less: current portion (692 ) Long-term lease liabilities $ 3,720 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Year Ended December 31, 2023 2022 Revenue North America $ 48,938 $ 28,613 International 16,931 4,296 Total revenue $ 65,869 $ 32,909 Income (loss) from operations North America $ (14,121 ) $ (36,517 ) International 1,819 (1,321 ) Total income (loss) from operations $ (12,302 ) $ (37,838 ) Depreciation and amortization North America $ 1,907 $ 19,938 International 646 979 Total depreciation and amortization $ 2,553 $ 20,917 Net income (loss) North America $ (54,170 ) $ (47,969 ) International 1,069 (1,267 ) Total net income (loss) $ (53,101 ) $ (49,236 ) |
Description of the Business a_2
Description of the Business and Basis of Presentation (Details) - Apr. 01, 2022 € in Millions, $ in Millions | USD ($) | EUR (€) |
Accounting Policies [Abstract] | ||
Payments to Acquire Businesses, Gross | $ 28.8 | € 26 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Sep. 06, 2023 $ / shares | Dec. 31, 2023 $ / shares | Dec. 31, 2022 $ / shares | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Stockholders' Equity, Reverse Stock Split | 1-for-10 reverse stock split | ||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Number of Reportable Segments | 2 | ||
Minimum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 2 years | ||
Maximum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Property, Plant and Equipment, Useful Life | 8 years | ||
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life | 5 years |
Acquisitions (Details)
Acquisitions (Details) € in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
May 12, 2022 shares | Apr. 01, 2022 USD ($) | Apr. 01, 2022 EUR (€) | Mar. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | Apr. 30, 2023 USD ($) shares | Dec. 31, 2023 USD ($) shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Acquisitions (Details) [Line Items] | |||||||||
Payments to Acquire Businesses, Gross | $ 28,800,000 | € 26 | |||||||
Logicquest Technology Inc [Member] | |||||||||
Acquisitions (Details) [Line Items] | |||||||||
Equity Method Investment, Ownership Percentage | 99.10% | ||||||||
Logicquest Technology Inc [Member] | |||||||||
Acquisitions (Details) [Line Items] | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 99,400,000 | 98,000,000 | |||||||
Business Combination, Consideration Transferred (in Dollars) | $ 225,000 | $ 225,000 | |||||||
Payments to Acquire Businesses, Gross | $ 225,000 | $ 0 | |||||||
Logicquest Technology Inc [Member] | Series C Preferred Stock [Member] | |||||||||
Acquisitions (Details) [Line Items] | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 48 | 48 | |||||||
Logicquest Technology Inc [Member] | Series D Preferred Stock [Member] | |||||||||
Acquisitions (Details) [Line Items] | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 10 | 10 | |||||||
Merchant Payment Solutions LLC [Member] | |||||||||
Acquisitions (Details) [Line Items] | |||||||||
Business Combination, Consideration Transferred (in Dollars) | $ 725,000 | ||||||||
Transact Europe Holdings [Member] | |||||||||
Acquisitions (Details) [Line Items] | |||||||||
Payments to Acquire Businesses, Gross | $ 28,800,000 | € 26 | $ 0 | $ 28,811,000 | |||||
Sky Financial & Intelligence [Member] | |||||||||
Acquisitions (Details) [Line Items] | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 500,000 | ||||||||
Business Combination, Consideration Transferred (in Dollars) | $ 18,100,000 | ||||||||
Payments to Acquire Businesses, Gross | $ 16,000,000 |
Acquisitions (Details) - Schedu
Acquisitions (Details) - Schedule of Business Acquisitions, by Acquisition - Transact Europe Holdings [Member] $ in Thousands | Apr. 01, 2022 USD ($) |
Tangible assets (liabilities): | |
Net assets and liabilities | $ 7,339 |
Intangible assets: | |
Intangible assets | 21,472 |
Total net assets acquired | 28,811 |
Customer Relationships [Member] | |
Intangible assets: | |
Intangible assets | 1,267 |
Goodwill [Member] | |
Intangible assets: | |
Intangible assets | $ 20,205 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 148,150 | $ 141,566 |
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | $ 1,100,000 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Property, Plant and Equipment - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 599 | $ 1,920 |
Less: accumulated depreciation | (293) | (224) |
Net property and equipment | 306 | 1,696 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 0 | 1,360 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 276 | 247 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 152 | 149 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 171 | $ 164 |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of Goodwill - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill [Line Items] | ||
Goodwill | $ 26,753 | $ 26,753 |
Northeast Merchant Systems, Inc. (“Northeast”) [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 2,793 | 2,793 |
Charge Savvy LLC [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 3,755 | 3,755 |
Transact Europe Holdings [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 20,205 | $ 20,205 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 2.4 | $ 20.3 |
Impairment of Intangible Assets, Finite-Lived | $ 18.1 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 10,487 | $ 9,762 |
Accumulated Amortization | (5,428) | (3,023) |
Net | $ 5,059 | 6,739 |
Customer Relationships [Member] | North America [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Cost | $ 6,545 | 5,820 |
Accumulated Amortization | (2,991) | (1,755) |
Net | $ 3,554 | 4,065 |
Customer Relationships [Member] | International [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 2 years | |
Cost | $ 1,267 | 1,267 |
Accumulated Amortization | (1,109) | (475) |
Net | $ 158 | 792 |
Technology-Based Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Cost | $ 2,675 | 2,675 |
Accumulated Amortization | (1,328) | (793) |
Net | $ 1,347 | $ 1,882 |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule Of Finite Lived Intangible Assets Future Amortization Expense Abstract | ||
2023 | $ 2,002 | |
2024 | 1,844 | |
2025 | 992 | |
2027 | 148 | |
2028 | 73 | |
Total | $ 5,059 | $ 6,739 |
Accrued Liabilities (Details) -
Accrued Liabilities (Details) - Schedule of Accounts Payable and Accrued Liabilities - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule Of Accounts Payable And Accrued Liabilities Abstract | ||
Accrued gateway fees | $ 2,356 | $ 681 |
Payroll related accruals | 1,235 | 664 |
Accrued legal and professional fees | 1,342 | 330 |
Accrued taxes | 306 | 1,357 |
Other | 516 | 318 |
Total | $ 5,755 | $ 3,350 |
Long-Term Debt, Net (Details)
Long-Term Debt, Net (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Nov. 29, 2023 USD ($) shares | Nov. 27, 2023 USD ($) shares | Jul. 31, 2023 USD ($) shares | Jul. 25, 2023 USD ($) shares | Nov. 08, 2021 USD ($) | Aug. 04, 2021 USD ($) | Jun. 09, 2020 USD ($) | May 08, 2020 USD ($) | Jan. 31, 2022 USD ($) | Mar. 31, 2022 | Dec. 31, 2023 USD ($) $ / shares $ / item shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | |
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Instrument, Maturity Date | Apr. 05, 2025 | ||||||||||||
Debt Conversion, Original Debt, Amount | $ 60,303,000 | $ 4,297,000 | |||||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | Subject to the satisfaction of certain equity conditions, the terms of the Restructuring Agreement require the holder to voluntarily convert certain interest payments when due under the Note at 95% of the lower of (i) the then in effect conversion price and (ii) the lowest volume weighted average price of our Common Stock during the five trading days immediately prior to such conversion. | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8% | ||||||||||||
Debt Instrument, Redemption Price, Percentage | 15% | ||||||||||||
Amortization of Debt Discount (Premium) | $ 13,134,000 | $ 13,980,000 | |||||||||||
Interest Expense, Other | $ 3,300,000 | 8,200,000 | |||||||||||
Series A Preferred Stock [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 6,000 | ||||||||||||
Shares Issued to Investor (in Shares) | shares | 6,000 | ||||||||||||
Shares Issued to Investor, Value | $ 16,703,000 | ||||||||||||
Series B Preferred Stock [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 55,000 | ||||||||||||
Shares Issued to Investor (in Shares) | shares | 55,000 | ||||||||||||
Shares Issued to Investor, Value | $ 3,000,000 | ||||||||||||
Interest Expense [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Original Debt, Amount | $ 1,703,000 | ||||||||||||
Senior Convertible Debt ]Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Instrument, Maturity Date | Apr. 05, 2025 | ||||||||||||
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 Conversion, Original Debt, Amount | $ 1,650,000 | $ 8,550,000 | |||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 1,397,327 | 5,986,954 | |||||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | upon satisfaction of all applicable closing conditions, including, without limitation, the Company having obtained any stockholder approval required for the consummation of the transactions and the issuance of the Common Stock issuable upon the conversion of all of the shares of Series A Preferred Stock (unless waived by the applicable other party), in the final exchange (the “Final Series A Exchange”), the parties agreed to exchange the remaining $16.703 million of outstanding principal balance subject to the Series A Exchanges for 9,000 shares of Series A Preferred Stock on a date mutually agreed to by the Company and the Investor. | As part of the First Exchange Agreement, the Company also agreed to allow for the conversion of up to an additional $9.0 million of principal (together with any accrued and unpaid interest thereon) of the Note at a conversion price equal to 97.5% of the lower of (x) the then in effect conversion price and (y) the lowest volume weighted average price of the Company’s Common Stock during the five trading days immediately prior to such conversion; and the Investor agreed to waive any interest that would otherwise accrue on the Note during the period commencing on April 1, 2023 through, and including, December 31, 2023. | 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, the 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,” which is equal to 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. | ||||||||||
Remaining Outstanding Principal | $ 16,703,000 | $ 6,000,000 | |||||||||||
Shares Subject To Exchange (in Shares) | shares | 9,000 | ||||||||||||
Gain (Loss) on Extinguishment of Debt | $ 1,300,000 | ||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ / shares | $ 1.18 | $ 1.43 | |||||||||||
Repayments of Debt | $ 6,900,000 | ||||||||||||
Debt Instrument, Covenant Description | The Note is the senior unsecured obligation of the Company and not the financial obligation 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 its subsidiaries. | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8% | ||||||||||||
Debt, Late Charge, Percentage | 15% | ||||||||||||
Debt Instrument, Debt Default, Description of Violation or Event of Default | If an event of default has occurred under the Note, the 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, 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 the Note, except that any raise will only be effective upon 61 days’ prior notice to us. | ||||||||||||
Debt Instrument, Redemption, Description | At any time no event of default exists, the Company may redeem all, but not less than all, of the Note outstanding in cash all, or any portion, of the Note at a 5% redemption premium to the greater of the face value and the equity value of the Company’s Common Stock underlying the Note | ||||||||||||
Amortization of Debt Discount (Premium) | $ 20,443,000 | $ 16,996,000 | $ 3,435,000 | ||||||||||
Senior Convertible Debt ]Member] | Series A Preferred Stock [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | shares | 6,000 | 15,000 | |||||||||||
Senior Convertible Debt ]Member] | Principal [Member] | Series A Preferred Stock [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Original Debt, Amount | $ 4.297 | ||||||||||||
Senior Convertible Debt ]Member] | Interest Expense [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Original Debt, Amount | 1,703,000 | ||||||||||||
Senior Convertible Debt ]Member] | Adjustment Measuring Price [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Description | the Company (i) failed to process at least $750 million in transaction volume or (ii) had revenue that was less than $12 million, the Note’s fixed conversion price then in effect exceeded the greater of (x) the Note's $1.67 floor and (y) 140% of the market price as of April 1, 2022 (the “Adjustment Measuring Price”), on April 1, 2022, the fixed conversion price automatically adjusted to the Adjustment Measuring Price. | ||||||||||||
Senior Convertible Debt ]Member] | Restructuring Agreement [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Description | the Company agreed to allow for the conversion of up to $4.5 million of principal (together with any accrued and unpaid interest thereon) of the Note at a conversion price equal to the lesser of (i) $2.40 and (ii) 97.5% of the lower of (x) the then in effect conversion price and (y) the lowest volume weighted average price of our Common Stock during the five trading days immediately prior to such conversion. | ||||||||||||
Senior Convertible Debt ]Member] | Exchange Agreement [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Description | the Company agreed to allow for the conversion of up to an additional $9.0 million of principal (together with any accrued and unpaid interest thereon) of the Note at a conversion price equal to 97.5% of the lower of (x) the then in effect conversion price and (y) the lowest volume weighted average price of our Common Stock during the five trading days immediately prior to such conversion. | ||||||||||||
Senior Convertible Debt ]Member] | One Year Alternate Optional Conversion [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Instrument, Face Amount | 30,000,000 | ||||||||||||
Increments Debt Amount | $ 250,000 | ||||||||||||
Derivative, Floor Price (in Dollars per Item) | $ / item | 1.67 | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Discount from Market Price, Offering Date | 98% | ||||||||||||
SBA CARES Act Loan [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Instrument, Maturity Date | Jun. 01, 2050 | ||||||||||||
Debt Instrument, Face Amount | $ 149,900 | $ 150,000 | $ 149,900 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | 3.75% | |||||||||||
Debt Instrument, Term | 30 years | 27 years | |||||||||||
Debt Instrument, Periodic Payment | $ 731 | ||||||||||||
Economic Injury Disaster Loan (“EIDL”) [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Instrument, Maturity Date | May 08, 2050 | ||||||||||||
Debt Instrument, Face Amount | $ 500,000 | $ 500,000 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | ||||||||||||
Debt Instrument, Periodic Payment | 2,477 | $ 731 | |||||||||||
Debt Instrument, Increase (Decrease), Net | $ 350,000 | ||||||||||||
Exchange Agreement [Member] | Senior Convertible Debt ]Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Debt Conversion, Original Debt, Amount | $ 22,703,000 | ||||||||||||
Second Exchange Agreement [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Gain (Loss) on Extinguishment of Debt | $ 22,500,000 | ||||||||||||
Second Exchange Agreement [Member] | Series A Preferred Stock [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Remaining Outstanding Principal | $ 16.703 | $ 16,703,000 | |||||||||||
Shares Subject To Exchange (in Shares) | shares | 9,000 | 9,000 | |||||||||||
Second Exchange Agreement [Member] | Series B Preferred Stock [Member] | |||||||||||||
Long-Term Debt, Net (Details) [Line Items] | |||||||||||||
Remaining Outstanding Principal | $ 60.303 | ||||||||||||
Shares Subject To Exchange (in Shares) | shares | 55,000 | ||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 3,000,000 | ||||||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 3,000,000 |
Long-Term Debt, Net (Details) -
Long-Term Debt, Net (Details) - Schedule of Debt - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Long-Term Debt, Net (Details) - Schedule of Debt [Line Items] | ||||
Total debt | $ 15,927 | $ 61,749 | ||
Less: current portion | (15) | (14) | ||
Net long-term debt | 15,912 | 61,735 | ||
Senior Convertible Debt ]Member] | ||||
Long-Term Debt, Net (Details) - Schedule of Debt [Line Items] | ||||
Convertible note, gross | 19,200 | 85,450 | ||
Less: Unamortized debt discount | (3,906) | (24,349) | ||
Net carrying value | 15,294 | 61,101 | $ 58,655 | $ 0 |
SBA CARES Act Loan [Member] | ||||
Long-Term Debt, Net (Details) - Schedule of Debt [Line Items] | ||||
Notes payable | 146 | 149 | ||
Economic Injury Disaster Loan (“EIDL”) [Member] | ||||
Long-Term Debt, Net (Details) - Schedule of Debt [Line Items] | ||||
Notes payable | $ 487 | $ 499 |
Long-Term Debt, Net (Details)_2
Long-Term Debt, Net (Details) - Schedule of Debt (Parentheticals) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2023 | Nov. 08, 2021 | Aug. 04, 2021 | Jun. 09, 2020 | May 08, 2020 | |
Senior Convertible Debt ]Member] | |||||
Long-Term Debt, Net (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Principal | $ 100,000,000 | $ 100,000,000 | |||
Interest rate | 8% | ||||
Due | Apr. 05, 2025 | ||||
SBA CARES Act Loan [Member] | |||||
Long-Term Debt, Net (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Principal | $ 149,900 | $ 149,900 | $ 150,000 | ||
Interest rate | 3.75% | 3.75% | |||
Due | Jun. 01, 2050 | ||||
Economic Injury Disaster Loan (“EIDL”) [Member] | |||||
Long-Term Debt, Net (Details) - Schedule of Debt (Parentheticals) [Line Items] | |||||
Principal | $ 500,000 | $ 500,000 | |||
Interest rate | 3.75% | ||||
Due | May 08, 2050 |
Long-Term Debt, Net (Details)_3
Long-Term Debt, Net (Details) - Convertible Debt - Senior Convertible Debt ]Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Long-Term Debt, Net (Details) - Convertible Debt [Line Items] | |||
Balance | $ 61,101 | $ 58,655 | $ 0 |
Repayments and conversion | (66,250) | (14,550) | |
Convertible debentures issued | 100,000 | ||
Derivative liability | (21,580) | ||
Original Issue Discount of 16% | (16,000) | ||
Placement fees and issuance costs | (7,200) | ||
Amortization and write-off of debt discount | 20,443 | 16,996 | 3,435 |
Balance | $ 15,294 | $ 61,101 | $ 58,655 |
Long-Term Debt, Net (Details)_4
Long-Term Debt, Net (Details) - Schedule of Derivative Liabilities at Fair Value - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Derivative Liabilities At Fair Value Abstract | ||
Balance | $ 255 | $ 18,735 |
Increase in derivative liability upon extinguishment of debt | 6,312 | |
Change in fair value | (6,548) | (18,480) |
Balance | $ 19 | $ 255 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Nov. 29, 2023 | Jul. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Convertible Preferred Stock (Details) [Line Items] | ||||
Debt Conversion, Original Debt, Amount (in Dollars) | $ 60,303 | $ 4,297 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8% | |||
Interest Expense [Member] | ||||
Convertible Preferred Stock (Details) [Line Items] | ||||
Debt Conversion, Original Debt, Amount (in Dollars) | $ 1,703 | |||
Series A Preferred Stock [Member] | ||||
Convertible Preferred Stock (Details) [Line Items] | ||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 6,000 | |||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | |||
Shares Issued, Price Per Share | $ 1,111 | |||
Preferred Stock, Conversion Basis | Each share of Series A Preferred Stock is convertible, at the option of the holder, at any time after the date of issuance of such share, into shares of common stock either (i) at the fixed conversion price then in effect, which initially is $2.00 (subject to standard antidilution adjustments and adjustments as a result of subsequent issuances of securities where the effective price of the common stock is less than the then current fixed conversion price) or (ii) at the Series A Alternate Conversion Price, as defined below. The Series A Certificate of Designations also provides that in the event of certain “Triggering Events,” any holder may, at any time, convert any or all of such holder’s Series A Preferred Stock at a conversion rate equal to the product of (i) the Series A Alternate Conversion Price and (ii) 115% of the stated value of the Series A Preferred Stock subject to such conversion. “Triggering Events” include, among others, (i) a failure to timely deliver shares of common stock, upon a conversion, (ii) a suspension of trading on the principal trading market or the failure to be traded or listed on the principal market for five days or more, (iii) the failure to pay any dividend to the holders of Series A Preferred Stock when required, (iv) the failure to remove restrictive legends when required, (v) the Company’s default in payment of indebtedness in an aggregate amount of $2 million or more, (vi) proceedings for a bankruptcy, insolvency, reorganization or liquidation, which are not dismissed with 30 days, (vii) commencement of a voluntary bankruptcy proceeding, and (viii) final judgments against the Company for the payment of money in excess of $2 million. The “Series A Alternate Conversion Price” means the lower of (i) the applicable conversion price then in effect and (ii) the greater of (x) $0.24 and (y) 97.5% of the lowest volume weighted average price of the common stock during the five consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable conversion notice. | |||
Preferred Stock, Convertible, Conversion Price | $ 2 | |||
Series B Preferred Stock [Member] | ||||
Convertible Preferred Stock (Details) [Line Items] | ||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 55,000 | |||
Repayments of Convertible Debt (in Dollars) | $ 3,000 | |||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | $ 0.01 | $ 0.01 | |
Shares Issued, Price Per Share | $ 1,339 | |||
Preferred Stock, Conversion Basis | Each share of Series B Preferred Stock is convertible, at the option of the holder, at any time after the date of issuance of such share, into shares of common stock either (i) at the fixed conversion price then in effect, which initially is $3.11 (subject to standard antidilution adjustments and adjustments as a result of subsequent issuances of securities where the effective price of the common stock is less than the then current fixed conversion price) or (ii) at the Series B Alternate Conversion Price, as defined below. The Series B Certificate of Designations also provides that in the event of certain “Triggering Events,” any holder may, at any time, convert any or all of such holder’s Series B Preferred Stock at a conversion rate equal to the product of (i) the Series B Alternate Conversion Price and (ii) 115% of the stated value of the Series B Preferred Stock subject to such conversion. “Triggering Events” include, among others, (i) a failure to timely deliver shares of common stock, upon a conversion, (ii) a suspension of trading on the principal trading market or the failure to be traded or listed on the principal market for five days or more, (iii) the failure to pay any dividend to the holders of Series B Preferred Stock when required, (iv) the failure to remove restrictive legends when required, (v) the Company’s default in payment of indebtedness in an aggregate amount of $2 million or more, (vi) proceedings for a bankruptcy, insolvency, reorganization or liquidation, which are not dismissed with 30 days, (vii) commencement of a voluntary bankruptcy proceeding, and (viii) final judgments against the Company for the payment of money in excess of $2 million. The “Series B Alternate Conversion Price” means the lower of (i) the applicable conversion price then in effect and (ii) the greater of (x) $0.62 and (y) 97.5% of the lowest volume weighted average price of the common stock during the five consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable conversion notice. | |||
Preferred Stock, Convertible, Conversion Price | $ 3.11 |
Convertible Preferred Stock (_2
Convertible Preferred Stock (Details) - Schedule of Stock by Class - Preferred Stock [Member] $ in Thousands | Dec. 31, 2023 USD ($) shares |
Class of Stock [Line Items] | |
Preferred Shares Authorized | 70,000 |
Preferred Shares Issued and Outstanding | 55,000 |
Carrying Value (in Dollars) | $ | $ 73,631 |
Liquidation Preference (in Dollars) | $ | $ 63,250 |
Common Stock Issuable Upon Conversion | 17,684,888 |
Series A Preferred Stock [Member] | |
Class of Stock [Line Items] | |
Preferred Shares Authorized | 15,000 |
Preferred Shares Issued and Outstanding | 0 |
Carrying Value (in Dollars) | $ | $ 0 |
Liquidation Preference (in Dollars) | $ | $ 0 |
Common Stock Issuable Upon Conversion | 0 |
Series B Preferred Stock [Member] | |
Class of Stock [Line Items] | |
Preferred Shares Authorized | 55,000 |
Preferred Shares Issued and Outstanding | 55,000 |
Carrying Value (in Dollars) | $ | $ 73,631 |
Liquidation Preference (in Dollars) | $ | $ 63,250 |
Common Stock Issuable Upon Conversion | 17,684,888 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Domestic Tax Authority [Member] | |
Income Taxes (Details) [Line Items] | |
Operating Loss Carryforwards | $ 101.7 |
State and Local Jurisdiction [Member] | |
Income Taxes (Details) [Line Items] | |
Operating Loss Carryforwards | $ 71.3 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Components Of Income Tax Expense Benefit Abstract | ||
Federal | $ 0 | $ 0 |
State | 17 | 40 |
International | 406 | 0 |
Current income tax expense (benefit) | 423 | 40 |
Deferred | ||
Federal | 0 | 0 |
State | 0 | 0 |
International | (134) | (48) |
Deferred income tax expense (benefit) | (134) | (48) |
Total tax expense | ||
Federal | 0 | 0 |
State | 17 | 40 |
International | 272 | (48) |
Income tax provision | $ 289 | $ (8) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Effective Income Tax Rate Reconciliation Abstract | ||
Statutory federal income tax rate of 21% applied to earnings before income taxes and extraordinary items | $ (11,091) | $ (10,341) |
State taxes - net of federal benefit | 14 | 31 |
Meals and entertainment | 10 | 14 |
Transactions expenses | 0 | 41 |
Gift | 4 | 4 |
Stock compensation (ISOs) | 189 | 0 |
Changes in FV of derivative liability | (1,374) | (3,540) |
Derecognition expense on conversion of convertible debt | 5,257 | 1,199 |
Valuation allowance | 7,223 | 12,329 |
Others | 212 | 116 |
Foreign rate difference | (155) | 139 |
Income Tax Expense (Benefit) | $ 289 | $ (8) |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of Effective Income Tax Rate Reconciliation (Parentheticals) | 12 Months Ended |
Dec. 31, 2023 | |
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 ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule Of Deferred Tax Assets And Liabilities Abstract | ||
State taxes - prior year | $ 4 | $ 4 |
Intangible assets | 4,785 | 5,380 |
Fixed assets | 2 | 0 |
Allowance for credit losses | 1,064 | 6,169 |
Capitalization of research and development Under Sec 174 | 2,012 | 1,121 |
Inventory reserve | 24 | 0 |
Contingent liability | 0 | 130 |
Stock compensation (RSA) | 111 | 0 |
Lease liability | 962 | 270 |
Accrued expenses | 73 | 0 |
Other | 70 | 0 |
Net operating loss carryover | 26,689 | 12,489 |
Total deferred tax assets | 35,796 | 25,563 |
Fixed assets | 0 | (5) |
Goodwill Tier 1 | (161) | (104) |
Intangible assets | (13) | (78) |
Right of use assets | (987) | (250) |
Total deferred tax liabilities | (1,161) | (437) |
Net deferred tax assets, non-current prior to valuation allowance | 34,635 | 25,126 |
Valuation allowance | (34,579) | (25,204) |
Total net deferred taxes | $ 56 | $ (78) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - Share-Based Payment Arrangement, Option [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Nov. 02, 2023 | |
Stock-Based Compensation (Details) [Line Items] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in Shares) | 1,098,262 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 40 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | $ 2.02 | $ 36.6 | |
Stock Issued During Period, Value, Restricted Stock Award, Forfeitures | $ 1,100 | $ 1,700 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Share-based Payment Arrangement, Option, Activity - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Payment Arrangement Option Activity Abstract | ||
Granted, Shares | 735,999 | |
Granted, Weighted-Average Exercise Price | $ 2.02 | |
Exercise, Shares | 0 | |
Exercised, Weighted-Average Exercis Price | $ 0 | |
Forfeited or Expired, Shares | (1,820) | |
Forfeited or Expired, Weighted-Average Exercise Price | $ 50.39 | |
Outstanding, Shares | 31,963 | |
Outstanding, Weighted-Average Exercise Price | $ 46.28 | |
Exercisable, Shares | 296,812 | |
Exercisable, Weighted-Average Exercise Price | $ 6.49 | |
Outstanding, Shares | 766,142 | |
Outstanding, Weighted-Average Exercise Price | $ 3.76 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Share Based Payment Award Stock Options Valuation Assumptions Abstract | ||
Risk-free interest rate | 4.44% | 2.70% |
Expected term | 5 years | 5 years |
Expected volatility | 204% | 93.20% |
Expected dividend yield | 0% | 0% |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details) - Nonvested Restricted Stock Shares Activity | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Nonvested Restricted Stock Shares Activity Abstract | |
Non-vested Restricted Stock Awards | shares | 52,545 |
Non-vested Restricted Stock Awards, Weighted Average Grant Date Fair Value | $ / shares | $ 13.48 |
Granted | shares | 346,508 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | $ 4.1 |
Vested | shares | (198,090) |
Vested, Weighted Average Grant Date Fair Value | $ / shares | $ 5.71 |
Forfeited | shares | (11,070) |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | $ 10.36 |
Non-vested Restricted Stock Awards | shares | 189,893 |
Non-vested Restricted Stock Awards, Weighted Average Grant Date Fair Value | $ / shares | $ 2.28 |
Operating Leases (Details)
Operating Leases (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Operating Leases (Details) [Line Items] | ||
Property Subject to or Available for Operating Lease, Number of Units | 4 | |
Operating Lease, Expense (in Dollars) | $ 1.1 | $ 0.8 |
Operating Lease, Weighted Average Remaining Lease Term | 4 years 7 months 6 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 11% | |
Europe [Member] | ||
Operating Leases (Details) [Line Items] | ||
Property Subject to or Available for Operating Lease, Number of Units | 1 |
Operating Leases (Details) - Le
Operating Leases (Details) - Lessee, Operating Lease, Liability, Maturity - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee Operating Lease Liability Maturity Abstract | ||
2023 | $ 1,102 | |
2024 | 1,161 | |
2025 | 1,329 | |
2025 | 1,046 | |
2027 | 1,041 | |
Total undiscounted cash flows | 5,679 | |
Less: imputed interest | (1,267) | |
Total lease liabilities | 4,412 | |
Less: current portion | (692) | $ (534) |
Lease liabilities - long-term | $ 3,720 | $ 1,109 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transactions (Details) [Line Items] | ||||
Stock Repurchased During Period, Shares | 200,000 | |||
Stock Issued During Period, Shares, New Issues | 100,525 | 105,417 | ||
Family of CEO #1 [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold (in Dollars) | $ 200,000 | |||
Family of CEO #2 [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold (in Dollars) | $ 110,000 | |||
First Repurchase [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Stock Repurchased During Period, Shares | 100,000 | |||
Share Price (in Dollars per share) | $ 55.9 | $ 55.9 | ||
Payments for Repurchase of Equity (in Dollars) | $ 5,590,000 | |||
Second Repurchase [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Stock Repurchased During Period, Shares | 100,000 | |||
Share Price (in Dollars per share) | $ 8.2 | $ 8.2 | ||
Payments for Repurchase of Equity (in Dollars) | $ 820,000 |
Segment Reporting (Details)
Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 2 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of Segment Reporting Information, by Segment - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue | ||
Revenue | $ 65,869 | $ 32,909 |
Income (loss) from operations | ||
Income (loss) from operations | (12,302) | (37,838) |
Depreciation and amortization | ||
Depreciation and amortization | 2,553 | 20,917 |
Net income (loss) | ||
Net income (loss) | (53,101) | (49,236) |
North America [Member] | ||
Revenue | ||
Revenue | 48,938 | 28,613 |
Income (loss) from operations | ||
Income (loss) from operations | (14,121) | (36,517) |
Depreciation and amortization | ||
Depreciation and amortization | 1,907 | 19,938 |
Net income (loss) | ||
Net income (loss) | (54,170) | (47,969) |
International [Member] | ||
Revenue | ||
Revenue | 16,931 | 4,296 |
Income (loss) from operations | ||
Income (loss) from operations | 1,819 | (1,321) |
Depreciation and amortization | ||
Depreciation and amortization | 646 | 979 |
Net income (loss) | ||
Net income (loss) | $ 1,069 | $ (1,267) |