Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2019 | |
Document And Entity Information | |
Entity Registrant Name | Ipsidy Inc. |
Entity Central Index Key | 0001534154 |
Amendment Flag | false |
Document Type | S-1 |
Document Period End Date | Mar. 31, 2019 |
Entity Filer Category | Non-accelerated Filer |
Entity Ex Transition Period | true |
Entity Small Business | true |
Entity Emerging Growth | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | |||
Cash | $ 2,920,895 | $ 4,972,331 | $ 4,413,822 |
Accounts receivable, net | 677,826 | 130,875 | 165,929 |
Current portion of net investment in direct financing lease | 60,313 | 58,727 | 52,790 |
Inventory, net | 165,352 | 133,541 | 492,030 |
Other current assets | 524,217 | 471,834 | 218,537 |
Total current assets | 4,348,603 | 5,767,308 | 5,343,108 |
Property and equipment, net | 216,780 | 204,000 | 209,719 |
Other Assets | 2,127,999 | 1,566,177 | 1,243,531 |
Intangible Assets, net | 3,169,734 | 3,310,184 | 2,878,080 |
Goodwill | 6,736,043 | 6,736,043 | 6,736,043 |
Net investment in direct financing lease, net of current portion | 544,350 | 560,036 | 618,763 |
Total assets | 17,143,509 | 18,143,748 | 17,029,244 |
Current Liabilities: | |||
Accounts payable and accrued expenses | 1,562,928 | 1,302,226 | 1,447,185 |
Capital lease obligation, current portion | 30,898 | 27,420 | |
Finance lease obligation, current portion | 31,834 | 30,898 | |
Notes payable, current portion | 4,926 | ||
Deferred revenue | 551,894 | 236,270 | 122,511 |
Total current liabilities | 2,151,582 | 1,614,394 | 1,597,116 |
Long-term liabilities: | |||
Notes payable, net of discounts and current portion | 1,892,673 | 1,853,648 | 2,375,720 |
Capital lease obligation, net of current portion | 84,610 | 115,509 | |
Finance lease obligation, net of current portion | 76,292 | 84,610 | |
Other liabilities | 254,998 | 45,000 | |
Total liabilities | 4,375,545 | 3,552,652 | 4,088,345 |
Commitments and Contingencies (Note 12) | |||
Stockholders' Equity: | |||
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 478,950,996 shares issued and outstanding | 47,895 | 47,895 | 40,331 |
Additional paid in capital | 91,186,061 | 90,770,682 | 79,053,339 |
Accumulated deficit | (78,697,974) | (76,435,235) | (66,407,622) |
Accumulated comprehensive income | 231,982 | 207,754 | 254,851 |
Total stockholders' equity | 12,767,964 | 14,591,096 | 12,940,899 |
Total liabilities and stockholders' equity | $ 17,143,509 | $ 18,143,748 | $ 17,029,244 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 478,950,996 | 478,950,996 | 403,311,988 |
Common stock, outstanding | 478,950,996 | 478,950,996 | 403,311,988 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||||
Products and services | $ 723,941 | $ 507,927 | $ 3,759,635 | $ 2,228,910 |
Lease income | 16,437 | 17,862 | 69,358 | 74,696 |
Total revenues, net | 740,378 | 525,789 | 3,828,993 | 2,303,606 |
Operating Expenses: | ||||
Cost of Sales | 176,463 | 120,248 | 1,256,853 | 589,254 |
General and administrative | 2,567,135 | 2,798,699 | 11,193,351 | 13,026,188 |
Research and development | 4,366 | 5,361 | 208,311 | 222,068 |
Depreciation and amortization | 160,788 | 110,676 | 493,697 | 475,211 |
Total operating expenses | 2,908,752 | 3,034,984 | 13,152,212 | 14,312,721 |
Loss from operations | (2,168,374) | (2,509,195) | (9,323,219) | (12,009,115) |
Other Income (Expense): | ||||
Other Income (Expense): | 6,226 | |||
Loss on derivative liability | (452,146) | |||
Gain on extinguishment of note payable | 2,802,234 | |||
Loss on modification of derivatives | (319,770) | |||
Loss on modification of warrants | (158,327) | |||
Loss on settlement of notes payable | (5,978,643) | |||
Interest expense, net | (86,890) | (239,169) | (757,801) | (1,337,081) |
Other income, net | 83,649 | |||
Other expense, net | (80,664) | (239,169) | (674,152) | (5,443,733) |
Loss before income taxes | (2,249,038) | (2,748,364) | (9,997,371) | (17,452,848) |
Income Taxes | (13,701) | (4,561) | (30,242) | (28,781) |
Net loss | $ (2,262,739) | $ (2,752,925) | $ (10,027,613) | $ (17,481,629) |
Net Loss Per Share - Basic and Diluted | $ 0 | $ (0.01) | ||
Weighted Average Shares Outstanding - Basic and Diluted | 478,950,996 | 404,254,263 | ||
Net loss per share - Basic (in dollars per share) | $ (0.02) | $ (0.05) | ||
Net loss per share - Diluted (in dollars per share) | $ (0.02) | $ (0.05) | ||
Weighted Average Shares Outstanding - Basic (in shares) | 429,852,594 | 338,485,301 | ||
Weighted Average Shares Outstanding - Diluted (in shares) | 429,852,594 | 338,485,301 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Loss | $ (2,262,739) | $ (2,752,925) | $ (10,027,613) | $ (17,481,629) |
Foreign currency translation gain | 24,228 | 26,289 | (47,907) | (53,760) |
Comprehensive loss | $ (2,238,511) | $ (2,726,636) | $ (10,075,520) | $ (17,535,389) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total |
Balance, beginning at Dec. 31, 2016 | $ 23,470 | $ 35,341,669 | $ (48,925,993) | $ 308,611 | $ (13,252,243) |
Balance, beginning (in shares) at Dec. 31, 2016 | 234,704,655 | ||||
Reclassification of derivatives removal of price protection in warrants | 7,614,974 | 7,614,974 | |||
Issuance of common stock upon conversion of debt and related interest | $ 8,482 | 21,601,191 | 21,609,673 | ||
Issuance of common stock upon conversion of debt and related interest (in shares) | 84,822,006 | ||||
Issuance of common stock for cash | $ 5,846 | 8,994,444 | 9,000,290 | ||
Issuance of common stock for cash (in shares) | 58,463,770 | ||||
Common stock issued for services | $ 60 | 140,091 | 140,151 | ||
Common stock issued for services (in shares) | 593,557 | ||||
Stock-based compensation | 5,650,072 | 5,650,072 | |||
Common stock issued with note payable | $ 450 | 841,277 | 841,727 | ||
Common stock issued with note payable (in shares) | 4,500,000 | ||||
Common stock issued for debt issuance costs | $ 120 | 224,340 | 224,460 | ||
Common stock issued for debt issuance costs (in shares) | 1,200,000 | ||||
Cash and common stock issued for equity issuance costs | $ 100 | (664,644) | (664,544) | ||
Cash and common stock issued for equity issuance costs (in shares) | 1,000,000 | ||||
Common stock returned as part of extinguishment of notes payable | $ (250) | (874,750) | (875,000) | ||
Common stock returned as part of extinguishment of notes payable (in shares) | (2,500,000) | ||||
Common stock issued compensation subject to performance | $ 2,000 | 2,000 | |||
Common stock issued compensation subject to performance (in shares) | 20,000,000 | ||||
Loss on modification of warrants | 158,327 | 158,327 | |||
Common stock issued upon exercise of warrants | $ 53 | 26,347 | 26,400 | ||
Common stock issued upon exercise of warrants (in shares) | 528,000 | ||||
Net loss | (17,481,629) | (17,481,629) | |||
Foreign currency translation | (53,760) | (53,760) | |||
Balance, ending at Dec. 31, 2017 | $ 40,331 | 79,053,339 | (66,407,622) | 254,851 | $ 12,940,899 |
Balance, ending (in shares) at Dec. 31, 2017 | 403,311,988 | 403,311,988 | |||
Stock-based compensation | $ 72 | 738,140 | $ 738,212 | ||
Stock-based compensation (in shares) | 720,000 | ||||
Exercise of common stock warrants | $ 168 | (168) | |||
Exercise of common stock warrants (in shares) | 1,676,240 | ||||
Net loss | (2,752,925) | (2,752,925) | |||
Foreign currency translation | 26,289 | 26,289 | |||
Balance, ending at Mar. 31, 2018 | $ 40,571 | 79,791,311 | (69,160,547) | 281,140 | 10,952,475 |
Balance, ending (in shares) at Mar. 31, 2018 | 405,708,228 | ||||
Balance, beginning at Dec. 31, 2017 | $ 40,331 | 79,053,339 | (66,407,622) | 254,851 | $ 12,940,899 |
Balance, beginning (in shares) at Dec. 31, 2017 | 403,311,988 | 403,311,988 | |||
Issuance of common stock for cash | $ 6,407 | 8,945,522 | $ 8,951,929 | ||
Issuance of common stock for cash (in shares) | 64,072,001 | ||||
Restricted stock issued for services | $ 521 | 245,372 | 245,893 | ||
Restricted stock issued for services (in shares) | 5,206,334 | ||||
Common stock issued for services | $ 46 | 97,080 | 97,126 | ||
Common stock issued for services (in shares) | 456,735 | ||||
Stock-based compensation | 2,429,959 | 2,429,959 | |||
Exercise of common stock warrants | $ 350 | (350) | |||
Exercise of common stock warrants (in shares) | 3,498,943 | ||||
Cashless exercise of common stock options | $ 163 | (163) | |||
Cashless exercise of common stock options (in shares) | 1,633,443 | ||||
Common stock issued for loan extension | $ 150 | (150) | |||
Common stock issued for loan extension (in shares) | 1,500,000 | ||||
Cancellation of shares in settlement of amounts due from prior acquisition | $ (73) | 73 | |||
Cancellation of shares in settlement of amounts due from prior acquisition (in shares) | (728,448) | ||||
Net loss | (10,027,613) | (10,027,613) | |||
Foreign currency translation | (47,097) | (47,907) | |||
Balance, ending at Dec. 31, 2018 | $ 47,895 | 90,770,682 | (76,435,235) | 207,754 | $ 14,591,096 |
Balance, ending (in shares) at Dec. 31, 2018 | 478,950,996 | 478,950,996 | |||
Stock-based compensation | 415,379 | $ 415,379 | |||
Net loss | (2,262,739) | (2,262,739) | |||
Foreign currency translation | 24,228 | 24,228 | |||
Balance, ending at Mar. 31, 2019 | $ 47,895 | $ 91,186,061 | $ (78,697,974) | $ 231,982 | $ 12,767,964 |
Balance, ending (in shares) at Mar. 31, 2019 | 478,950,996 | 478,950,996 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net loss | $ (2,262,739) | $ (2,752,925) | $ (10,027,613) | $ (17,481,629) |
Adjustments to reconcile net loss with cash flows from operations: | ||||
Depreciation and amortization expense | 160,788 | 110,676 | 493,697 | 475,211 |
Stock-based compensation | 415,379 | 738,212 | 2,429,959 | 5,650,072 |
Stock issued for services | 343,019 | 140,151 | ||
Inventory reserve | 348,302 | 358,300 | ||
Amortization of debt discount and debt issuance costs, net | 27,441 | 144,065 | 477,928 | 937,133 |
Loss on derivative liability | 452,146 | |||
Gain on settlement of notes payable | (2,802,234) | |||
Loss on modification of derivatives | 319,770 | |||
Loss on modification of warrants | 158,327 | |||
Loss on conversion of debt | 5,978,643 | |||
Write off of assets | 148,627 | 212,862 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (557,737) | (514,722) | 20,762 | (36,963) |
Net investment in direct financing lease | 14,100 | 12,675 | 52,790 | 47,452 |
Other current assets | 213,842 | (169,973) | (265,624) | (52,058) |
Inventory | (42,424) | (196,655) | (1,519) | (712,527) |
Accounts payable and accrued expenses | (28,964) | 380,899 | (84,512) | 90,353 |
Deferred revenue | 315,624 | 416,301 | 113,759 | (276,169) |
Net cash flows from operating activities | (1,744,690) | (1,831,447) | (5,950,425) | (6,541,160) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchase of property and equipment | (14,900) | (10,474) | (59,091) | (13,246) |
Investment in other assets | (315,282) | (182,140) | (1,319,932) | (894,435) |
Net cash flows from investing activities | (330,182) | (192,614) | (1,379,023) | (907,681) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from issuance of notes payable and common stock | 3,000,000 | |||
Proceeds from the sale of common stock, net | 9,610,793 | 9,002,290 | ||
Proceeds from exercise of common stock warrants | 26,400 | |||
Payment of debt and equity issuance costs | (658,864) | (750,975) | ||
Principal payments on capital lease obligations | (27,421) | (30,842) | ||
Principal payments on finance lease obligation | (7,381) | (6,551) | ||
Principal payments on notes payable | (1,000,000) | (59,819) | ||
Net cash flows from financing activities | (7,381) | (6,551) | 7,924,508 | 11,187,054 |
Effect of Foreign Currencies | 30,817 | 29,153 | (36,551) | (13,496) |
Net Change in Cash | (2,051,436) | (2,001,459) | 558,509 | 3,724,717 |
Cash, Beginning of the Period | 4,972,331 | 4,413,822 | 4,413,822 | 689,105 |
Cash, End of the Period | 2,920,895 | 2,412,363 | 4,972,331 | 4,413,822 |
Supplemental Disclosure of Cash Flow Information: | ||||
Cash paid for interest | 3,392 | 4,223 | 173,426 | 11,021 |
Cash paid for income taxes | 13,701 | 4,561 | 17,304 | 6,957 |
Non-cash Investing and Financing Activities: | ||||
Issuance of common stock for conversion of debt and related interest | 21,609,673 | |||
Issuance of common stock for debt issuance costs | 224,460 | |||
Reclassification of derivatives upon removal of price protection in warrants | 7,614,974 | |||
Reclassification of software development costs to intangible assets | 679,882 | |||
Acquisition of equipment due to a capital lease | $ 163,407 | |||
Purchase of vehicle with note payable | 16,510 | |||
Recognition of lease right to use assets and liabilities | $ 514,473 |
Basis of Presentation
Basis of Presentation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION In the opinion of Management, the accompanying unaudited condensed consolidated financial statements are prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only of normal recurring accruals) which we considered as necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company's Annual Report on Form 10-K The condensed consolidated financial statements include the accounts of Ipsidy Inc. and its wholly-owned subsidiaries Innovation in Motion, Inc., MultiPay S.A.S., ID Global LATAM, IDGS S.A.S., ID Solutions, Inc., FIN Holdings Inc., Ipsidy Enterprises Limited, and Cards Plus Pty Ltd. (collectively the "Company"). All significant intercompany balances and transactions have been eliminated in consolidation. Going concern As of March 31, 2019, the Company had an accumulated deficit of approximately $78.7 million. For the three months ended March 31, 2019, the Company earned revenue of approximately $0.7 million and incurred a loss from operations of approximately $2.2 million. The reports of our independent registered public accounting firm on our consolidated financial statements for the years ended December 31, 2018 and 2017 contained an explanatory paragraph regarding our ability to continue as a going concern based upon our net losses and accumulated deficit. These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from the Company's current shareholders, the ability of the Company to obtain additional equity financing to continue operations, the Company's ability to generate sufficient cash flows from operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues and cash flows. There is no assurance that the Company will ever be profitable or be able to secure funding or generate sufficient revenues to sustain operations. As such, there is substantial doubt about the Company's ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Net Loss per Common Share The Company computes net loss per share in accordance with FASB ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the statement of operations. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible notes and stock warrants, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options, warrants and conversion of convertible notes. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the three months ended March 31, 2019 and 2018 because their effect was antidilutive: Security 2019 2018 Stock Options 106,253,339 107,958,331 Warrants 46,201,477 45,964,543 Total 152,454,816 153,922,874 Inventories Inventories of kiosks held by IDGS S.A.S are stated at the lower of cost (using the first-in, first-out method) or net realizable value. The kiosks provide electronic ticketing for transit systems. Inventory of plastic/ID cards, digital printing material, which are held by Cards Plus Pty Ltd., are at the lower of cost (using the average method) or net realizable value. The Plastic/ID cards and digital printing material are used to provide plastic loyal ID and other types of cards. Inventories at March 31, 2019 and December 31, 2018 consist of kiosks that were not placed into service and are held for sale and cards inventory. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period. As of March 31, 2019 and December 31, 2018, the Company recorded an inventory valuation allowance of approximately $589,000 and $707,000, respectively, to reflect net realizable value of the kiosks that are being held for sale and the Company believes no valuation allowance was necessary regarding the cards inventory. Leases In February 2016, the FASB issued ASU No. 2016-02 (Topic 842). Topic 842 amends several aspects of lease accounting, including requiring lessees to recognize leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. In July 2018, the FASB issued supplemental adoption guidance and clarification to Topic 842 within ASU 2018-10 "Codification Improvements to Topic 842, Leases" and ASU 2018-11 "Leases (Topic 842): Targeted Improvements." The new guidance aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. A modified retrospective application is required with an option to not restate comparative periods in the period of adoption. The Company, effective January 1, 2019 has adopted the provisions of the new standard. The Company decided to use the practical expedients available upon adoption of Topic 842 to aid the transition from current accounting to provisions of Topic 842. The package of expedients will effectively allow Ipsidy to run off existing leases, as initially classified as operating or financing and classify new leases after implementation under the new standard as the business evolves. The practical expedients elected by the Company in transition permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs. Furthermore, we will elect the short-term lease recognition exemption for leases with a term of 12 or less months which are not reasonably certain of exercising any available renewal options that would extend past 12 months. Additionally, we will continue to account for the executory costs of the direct financing lease as previously concluded and the initial direct costs were not considered significant. The Company has operating leases principally for offices and some of the leases have renewal options. Management evaluates each lease independently to determine the purpose, necessity to its future operations in addition to other appropriate facts and circumstances. We adopted Topic 842 using a modified retrospective approach for all existing leases at January 1, 2019. The adoption of Topic 842 impacted our balance sheet by the recognition of the operating lease right-of-use assets and the liability for operating leases. The accounting for finance leases (capital leases) was substantially unchanged. Accordingly, upon adoption, leases that were classified as operating leases under the previous guidance were classified as operating leases under Topic 842. The lease liability is based on the present value of the remaining lease payments, discounted using a market based incremental borrowing rate as the effective date of January 1, 2019 using current estimates as to lease term including estimated renewals for each operating lease. As of January 1, 2019, the Company recorded an adjustment of approximately $514,000 to operating lease right-of-use assets ("ROU") and the related lease liability. See Note 12 for further information with respect to leases. See the subsequent Notes 7, 10, 11 and 12 to Notes to Condensed Consolidated Financial Statements for Additional Information. Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("Topic 606"). Topic 606 supersedes the revenue recognition requirements in ASU Topic 605, Revenue Recognition ("Topic 605"), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which discusses the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. Collectively, we refer to Topic 606 and Subtopic 340-40 as the "new standard." The new standard was adopted by the Company in the year beginning January 1, 2018. The two permitted transition methods under the new standard are the full retrospective method, in which the new standard would be applied to each prior reporting period presented and the cumulative effect of applying the new standard would be recognized at the earliest period shown, or the modified retrospective method, in which the cumulative effect of applying the new standard would be recognized at the date of initial application. Based on our assessment, the impact of the new standard on our operations in prior periods was not significant. Below is the Company's revenue recognition policy determined by revenue stream for its significant revenue generating activities through March 31, 2019. Cards Plus Payment Processing Identity Solutions In 2018, the Company introduced a pay for performance plan for internal and external sales force, which is based on a percentage of revenues received by the Company. In the three months ended March 31, 2019 and March 31, 2019, no commissions were earned. We will defer and amortize any direct and incremental commission as well as costs to obtain a contract over the term of the related contracts. As of March 31, 2019 and December 31, 2018, there were no deferred commission. We will review each new contract for the related performance obligations and related revenue and expense recognition implications. We expect that the revenues derived from the new identity services could include multiple performance obligations. A performance obligation under the new revenue standard is defined as a promise to provide a "distinct" good or service to a customer. The Company has determined that one possible treatment under the new standard is that these services will represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Further, the Company has determined that the performance obligation to provide account access and facilitate transactions may meet the criteria for the "as invoiced" practical expedient, in that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company's performance completed to date. As a result, the Company anticipates it may recognize revenue in the amount to which the Company has a right to invoice, based on completed performance at the relevant date. Additionally, the contracts could include implementation services, or support on an "as needed" basis and we will review each contract and determine whether such performance obligations are separate and distinct and apply the new standard accordingly to the revenue and expense derived from or related to each such service. A more complete analysis of the impact of the standard on these contracts will be performed at the period of time when services are expected to commence and the conclusions reached by management may be different from those described above. For the quarter ended March 31, 2019, no revenues were recognized or required to be recognized under this practical expedient. Additionally, the Company will capitalize the incremental costs of acquiring and fulfilling a contract with a customer if the Company expects to recover those costs. The incremental costs of acquiring and fulfilling a contract are those that the Company incurs to acquire and fulfill a contract with a customer that it would not have incurred if the contract had not been acquired (for example, a sales commission or specific incremental costs associated with the contract). The Company capitalizes the costs incurred to acquire and fulfill a contract only if those costs meet all the following criteria: a. The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. b. The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. c. The costs are expected to be recovered. The Company will capitalize contract acquisition and fulfillment costs related to signing or renewing contracts that meet the above criteria, which will be classified as contract cost assets in the Company's Consolidated Balance Sheets. Contract cost assets are amortized using the straight-line method over the expected period of benefit beginning at the time revenue begins to be realized. The amortization of contract fulfillment cost assets associated with facilitating transactions are recorded as cost of services in the Company's Consolidated Statements of Operations. The amortization of contract acquisition cost assets associated with sales commissions that qualify for capitalization are recorded as selling, general and administrative expense in the Company's Consolidated Statements of Operations. As of March 31, 2019, and December 31, 2018, the Company had deferred contract costs, represented by contract cost assets of approximately $5,000 and $11,000, respectively which are included in other currents assets for certain costs incurred for the future delivery of election support services. The performance obligation will be met over the next two years and the costs will be expensed as the associated revenue is recognized as the Company performances its obligations. As of March 31, 2019, and December 31, 2018, the Company had approximately $15,000 of accounts payable and accrued expenses related to the delivery of biometric identity system and services. The $15,000 will be paid in accordance with the terms of the service provider agreements. Share Based Payments On June 20, 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Previously, share-based payment arrangements to nonemployees were accounted for under ASC 718, while nonemployee share-based payments issued for goods and services were accounted for under ASC 505-50. Before the amendment, the major difference for the Company (but not limited to) was the determination of measurement date which generally is the date on which the measurement of equity classified share-based payments becomes fixed. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified nonemployee share-based payment awards are no longer measured at the earlier of the date which a commitment for performance by the counterparty is reached or the date at which the counterparty's performance is complete. They are now measured at the grant date of the award which is the same as share-based payments for employees. The Company adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance. The Company has determined on the date of adoption that the impact of the new standard is not significant. Beginning in 2019, the Company in accordance with the requirements of the new standard will expense the fair value of the existing non-employee share-based payments over their vesting period using the fair value determined on the date of adoption. See note 9 of the notes to condensed consolidated financial statements as employee and non-employee share-based payments are presented. | NOTE 1 – DESCRIPTION OF BUSINESS AMD SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Ipsidy Inc. (formerly ID Global Solutions Corporation) (“Ipsidy” or the “Company”) was incorporated on September 21, 2011 under the laws of the State of Delaware. Ipsidy is a provider of secure, biometric identification, identity management and electronic transaction processing services. The Company plans to provide pre-transaction verification of identity as well as embed identity attributes within every electronic transaction message processed through our platform, or other electronic systems. The Company provides its biometric identification services to government and public sector organizations, seeking to authenticate and manage identities for a variety of security purposes, including issuing identity cards and exercise of rights such as voting in elections. The Company’s current and future platforms of internally developed software as well as acquired and licensed technology is intended to provide solutions for multi modal biometric matching, multi-factor out of band identity and transaction authentication, and electronic transactions. Going Concern As of December 31, 2018, the Company had an accumulated deficit of approximately $76.4 million. For the year ended December 31, 2018, the Company earned revenue of approximately $3.8 million and incurred a loss from operations of approximately $9.3 million. These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from the Company’s current shareholders, the ability of the Company to obtain additional equity financing to continue operations, the Company’s ability to generate sufficient cash flows from operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues and cash flows. As there can be no assurance that the Company will be able to achieve positive cash flows (become profitable) and raise sufficient capital to maintain operations there is substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Basis of Consolidation The consolidated financial statements include the accounts of Ipsidy Inc. and its wholly-owned subsidiaries Innovation in Motion Inc. MultiPay S.A.S., ID Global LATAM, IDGS S.A.S., ID Solutions, Inc., FIN Holdings, Inc., Cards Plus Pty Ltd. and Ipsidy Enterprises Limited (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“US GAAP”) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. Use of Estimates In preparing these consolidated financial statements in conformity with US GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the realizability of accounts receivable and inventory, valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to derivative liabilities, equity instruments and share based payments. Revenue Recognition An entity recognizes revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Revenue from the sale of unique secure credential products and solutions to customers is recorded at the completion of the project unless the solution includes benefits to the end user in which additional resources or services are required to be provided. Revenue from cloud-based services arrangements that allow for the use of a hosted software product or service that are provided on a consumption basis (for example, the number of transactions processed over a period of time) is recognized commensurate with the customer utilization of such resources. Generally, the contract calls for a minimum number of transactions to be charged by the Company on a monthly basis. Accordingly, the Company records the minimum transactional fee based on the passage of a month’s time as revenues. Amounts in excess of the monthly minimum, are charged to customers based on the actual number of transactions. Consulting services revenue is recognized as services are rendered, generally based on the negotiated hourly rate in the consulting arrangement and the number of hours worked during the period. Consulting revenue for fixed-price services arrangements is recognized as services are provided. The lease of equipment to customers that meet certain criteria are recognized as a direct financing lease. Direct financing lease arrangements are recognized as revenue over the term of the associated lease based on the effective interest method. As of December 31, 2018 and December 31, 2017, the Company has 78 kiosks financed under direct financing leases. The revenue associated with these arrangements is expected to be recognized through April 2026. The imputed interest rate in the arrangements approximates 10.7%. Accounts Receivable All customers are granted credit on a short-term basis and related credit risks are considered minimal. The Company routinely reviews its trade receivables and makes provisions for probable doubtful accounts; however, those provisions are estimates and actual results could differ from those estimates and those differences may be material. Trade receivables are deemed uncollectible and removed from accounts receivable and the allowance for doubtful accounts when collection efforts have been exhausted. At December 31, 2018 and 2017, management determined no allowance for doubtful accounts was required. Inventories Inventories of kiosks held by IDGS S.A.S are stated at the lower of cost (using the first-in, first-out method) or net realizable value. The kiosks provide electronic ticketing for transit systems. Inventory of plastic/ID cards, digital printing material, which are held by Cards Plus Pty Ltd., are at the lower of cost (using the average method) or market. The Plastic/ID cards and digital printing material are used to provide plastic loyal ID and other types of cards. Inventories at December 31, 2018 and December 31, 2017 consist of cards inventory and kiosks that have not been placed into service. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period. As of December 31, 2018 and December 31, 2017, the Company recorded an inventory valuation allowance of approximately $707,000 and $353,000, respectively, to reflect net realizable value of kiosks that are being held for sale and the Company believes no valuation allowance was necessary regarding the cards inventory. Concentration of Credit Risk The Company’s financial instruments that potentially expose the Company to a concentration of credit risk consist of cash and accounts receivable. Cash: 2018 Revenues and accounts receivable: 2017 Revenues and accounts receivable: Income Taxes The Company accounts for income taxes under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 “Income Taxes.” Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Leases All leases are classified at the inception as direct finance leases or operating leases based on whether the lease transfers substantially all the risks and rewards of ownership. Leases that transfer to the leasee substantially all of the risks and rewards incidental to ownership of the asset are classified as direct finance leases. Property and Equipment, net Property and equipment consist of furniture and fixtures and computer equipment, and are stated at cost. Property and equipment are depreciated using the straight-line method over the estimated useful service lives of three to five years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal. Other Assets - Software Development Costs Other assets consist primarily of costs associated with software development of new product offerings and enhancements to existing and new applications. Development costs of computer software to be sold, leased or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. As of December 31, 2018 and 2017, the balance sheet assets have reached technological feasibility were under further development and have not been placed in service. Upon completion, the amounts will be recorded in the appropriate asset category and amortized over their estimated useful lives. Intangible Assets Excluding goodwill, acquired intangible assets and internally developed software are amortized over their estimated useful lives. Acquired amortizing intangible assets are carried at cost, less accumulated amortization. Internally developed software costs are capitalized upon reaching technological feasibility. Amortization of acquired finite-lived intangible assets is computed over the estimated useful lives of the respective assets which is the shorter of the life of the asset or the period during which sales will be generated. Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of net identified tangible and intangible assets acquired. The Company performs an annual impairment test of goodwill and further periodic tests to the extent indicators of impairment develop between annual impairment tests. The Company’s impairment review process compares the fair value of the reporting unit to its carrying value, including the goodwill related to the reporting unit utilizing qualitative considerations. To determine the fair value of the reporting unit, the Company may use various approaches including an asset or cost approach, market approach or income approach or any combination thereof. These approaches may require the Company to make certain estimates and assumptions including future cash flows, revenue and expenses. These estimates and assumptions are reviewed each time the Company tests goodwill for impairment and are typically developed as part of the Company’s routine business planning and forecasting process. While the Company believes its estimates and assumptions are reasonable, variations from those estimates could produce materially different results. The Company did not recognize any goodwill impairments for the years ended December 31, 2018 and 2017. Stock-based compensation The Company has accounted for stock-based compensation under the provisions of FASB ASC 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). For employee awards, the fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. For non-employees, the fair value of each stock option award is estimated on the measurement date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. For non-employees, the Company utilizes the graded vesting attribution method under which the entity treats each separately vesting portion (tranche) as a separate award and recognizes compensation cost for each tranche over its separate vesting schedule. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. For employee awards, the expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. Impairment of Long-Lived Assets Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted estimated future cash flows, an impairment review is performed. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Generally, fair value is determined using valuation techniques such as expected discounted cash flows or appraisals, as appropriate. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated or amortized. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. During the years ended December 31, 2018 and 2017, the Company wrote-off net assets of approximately $149,000 and $216,000 as the assets were no longer being utilized or developed for commercial purposes and we do not anticipate any future realizable value. Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to incurred to perform research projects and develop technology for the Company’s products. Research and development costs are expensed as incurred. Net Loss per Common Share The Company computes net loss per share in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible notes and stock warrants, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options, warrants and conversion of convertible notes. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the years ended December 31, 2018 and 2017 because their effect was antidilutive: 2018 2017 Stock Options 106,253,339 103,208,331 Warrants 46,201,477 48,164,543 Total 152,454,816 151,372,874 Derivative Instruments The Company accounted for derivatives through the use of a fair value concept whereby all of the Company’s derivative positions are stated at fair value in the accompanying consolidated balance sheets. Due to the potential adjustment in the conversion price associated with certain of the convertible debentures and the potential adjustment in the exercise price of certain of the warrants, the Company determined that certain of the conversion features and warrants are considered derivative liabilities required to be presented at fair value on the accompanying consolidated balance sheet in prior periods with changes in fair value reported in the consolidated statements of operations. As of December 31, 2018 and 2017, the Company does not have any instruments that are considered derivative instruments. See Note 7. Common Stock Purchase Warrants The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASC 815-40”). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). On January 31, 2017, the Company entered into agreements with the holders of warrants containing down-round features, resulting in the removal of down-round provisions contained in the warrants. Accordingly, as of December 31, 2018 and 2017, the Company had no common stock warrants requiring liability presentation. See Note 7. Foreign Currency Translation The assets, liabilities and results of operations of certain of Ipsidy’s subsidiaries are measured using their functional currency which is the currency of the primary foreign economic environment in which they operate. Upon consolidating these subsidiaries with Ipsidy, the applicable assets and liabilities are translated to US dollars at currency exchange rates as of the applicable dates and their revenues and expenses are translated at the weighted average currency exchange rates during the applicable reporting periods. Translation adjustments resulting from the process of translating these subsidiaries’ financial statements are reported in other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income (loss). Fair Value Measurements ASC 820, “Fair Value Measurements”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Fair Value of Financial Instruments The Company is required to disclose fair value information about financial instruments when it is practicable to estimate that value. The carrying amounts of the Company’s cash, accounts receivable, other receivables, accounts payable, accrued expenses, and other current liabilities approximate their estimated fair value due to the short-term maturities of these financial instruments and because related interest rates offered to the Company approximate current rates. The fair value of the Company’s notes payable is $2,000,000, which differs from the carrying value or reported amounts of $1,853,648 at December 31, 2018 because of the debt discounts as discussed in Note 6. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). Topic 606 supersedes the revenue recognition requirements in ASU Topic 605, Revenue Recognition (“Topic 605”), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which discusses the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. Collectively, we refer to Topic 606 and Subtopic 340-40 as the “new standard.” The new standard was adopted by the Company on January 1, 2018. The two permitted transition methods under the new standard are the full retrospective method, in which the new standard would be applied to each prior reporting period presented and the cumulative effect of applying the new standard would be recognized at the earliest period shown, or the modified retrospective method, in which the cumulative effect of applying the new standard would be recognized at the date of initial application. Based on our assessment, the impact of the new standard on our operations in prior periods is not significant. The following is the Company’s revenue recognition policy determined by revenue stream for its significant revenue generating activities through December 31, 2018. Cards Plus - The Company recognizes revenue for the design and production of cards when products are shipped or services have been performed due to the short term nature of the contracts. Payment Processing – The Company recognizes revenue for variable fees generated for payment processing solutions that are earned on a usage fee over time based on monthly transaction volumes or on a monthly flat fee rate. Additionally, the Company also sells certain equipment from time to time for which revenue is recognized upon delivery to the customer. Identity Solutions Software – The Company recognizes revenue based on the identified performance obligations over the performance period for fixed consideration and for variable fees generated that are earned on a usage fee based over time based on monthly transaction volumes or on a monthly flat fee rate. The Company had a deferred revenue contract liability of approximately $236,000 and $123,000 as of December 31, 2018 and 2017 for certain revenue that will be earned in future periods. The $123,000 of deferred revenue contract liability as of December 31, 2017 was earned in the year ended December 31, 2018. The deferred revenue relates to the service period of support services for two customers. As of December 31, 2018 majority of the deferred revenue contract liability will be recognized over the next quarter. We have allocated the selling price in the contract to one customer which has multiple performance obligations based on the contract selling price that we believe represents a fair market price for the service rendered. During the year ended December 31, 2018, the Company had revenues from operations in North American, South America and Africa of $1.9 million, $0.5 million and $1.4 million respectively compared to $0.5 million, $0.4 million, $1.4 million respectively in the year ended December 31, 2017. In 2018, the Company introduced its new identity transaction platform and products as well as its pay for performance plan for both internal and external salesforce, that is based on a percentage of the benefit derived by the Company. For the year ended December 31, 2018, the Company recorded revenues of approximately $5,000 from the new platform. The requirements under the new standard may impact future revenue and expenses recognition. One impact could be the accounting related to the capitalization and deferral of incremental commission and other costs of obtaining new contracts. We will defer direct and incremental commission as well as costs to obtain a contract and amortize those costs over the term of the related contract. As of December 31, 2018, there was a deferred commission of approximately $5,000 related to future delivery of an identity solutions system and services. We will review each new contract for the related performance obligations and related revenue and expense recognition implications. We expect that the revenues derived from the new product offerings could include multiple performance obligations. A performance obligation under the new revenue standard is defined as a promise to provide a “distinct” good or service to a customer. The Company has determined that one possible treatment under the new standard is that these services will represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Further, the Company has determined that the performance obligation to provide account access and facilitate transactions may meet the criteria for the “as invoiced” practical expedient, in that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. As a result, the Company anticipates it may recognize revenue in the amount to which the Company has a right to invoice, based on completed performance at the relevant date. Additionally, the contracts could include implementation services, or support on an “as needed” basis and we will review each contract and determine whether such performance obligations are separate and distinct and apply the new standard accordingly to the revenue and expense derived from or related to each such service. Additionally, the Company will capitalize the incremental costs of acquiring and fulfilling a contract with a customer if the Company expects to recover those costs. The incremental costs of acquiring and fulfilling a contract are those that the Company incurs to acquire and fulfill a contract with a customer that it would not have incurred if the contract had not been acquired (for example, a sales commission or specific incremental costs associated with the contract). The Company capitalizes the costs incurred to acquire and fulfill a contract only if those costs meet all the following criteria: a. The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. b. The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. c. The costs are expected to be recovered. The Company will capitalize contract acquisition and fulfillment costs related to signing or renewing contracts that meet the above criteria, which will be classified as contract cost assets in the Company’s Consolidated Balance Sheets. Contract cost assets will be amortized using the straight-line method over the expected period of benefit beginning at the time revenue begins to be realized. The amortization of contract fulfillment cost assets associated with facilitating transactions will be recorded as cost of services in the Company’s Consolidated Statements of Operations. The amortization of contract acquisition cost assets associated with sales commissions that qualify for capitalization will be recorded as selling, general and administrative expense in the Company’s Consolidated Statements of Operations. As of December 31, 2018, the Company had approximately $15,000 of accounts payable and accrued expenses related to the delivery of biometric identity system and services. The $15,000 will be paid in accordance with the terms of the service provider agreements. Revenue related to direct financing leases is outside the scope of Topic 606 and is recognized over the term of the lease using the effective interest method. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02 (Topic 842). Topic 842 amends a number of aspects of lease accounting, including requiring lessees to recognize leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. In July 2018, the FASB issued supplemental adoption guidance and clarification to Topic 842 within ASU 2018-10 “Codification Improvements to Topic 842, Leases” and ASU 2018-11 “Leases (Topic 842): Targeted Improvements.” The new guidance aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. A modified retrospective application is required with an option to not restate comparative periods in the period of adoption. This guidance is effective for the Company on January 1, 2019 with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements, which will consist primarily of a balance sheet gross up of its operating leases to show equal and offsetting right-of-use assets and lease liabilities. The Company anticipates using the practical expedients that are included in the guidance for existing operating leases which allows a waiver of lease assessment of their respective classification under the new standard. The Company will adopt the requirements of the new standard as new arrangements are executed. On June 20, 2018, the FASB issued ASU 2018-07,1 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Currently, share-based payment arrangements to nonemployees are accounted for under ASC 718,3 while nonemployee share-based payments issued for goods and services are accounted for under ASC 505-50. ASC 505-50. Before the amendment, the major difference for the Company (but not limited to) was the determination of measurement date which generally is the date on which the measurement of equity classified share-based payments becomes fixed. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified nonemployee share-based payment awards are no longer measured at the earlier of the date which a commitment for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. They are now measured at the grant date of the award which is the same as share-based payments for employees. The Company will adopt the requirem |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
PROPERTY AND EQUIPMENT, NET | NOTE 2 – PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following as of March 31, 2019 and December 31, 2018: 2019 2018 Computers and equipment $ 269,852 $ 238,442 Furniture and fixtures 156,867 156,867 426,719 $ 395,309 Less Accumulated depreciation 209,939 191,309 Property and equipment, net $ 216,780 $ 204,000 Depreciation expense totaled $18,630 and $17,267 for the three months ended March 31, 2019 and 2018, respectively. | NOTE 2 – PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following as of December 31, 2018 and 2017: 2018 2017 Property and equipment $ 238,442 $ 179,351 Equipment under capital lease (see Note 11) 156,867 156,867 395,309 336,218 Less Accumulated depreciation 191,309 126,499 Property and equipment, net $ 204,000 $ 209,719 Depreciation expense totaled $64,810 and $82,616 for the years ended December 31, 2018 and 2017, respectively. |
Other Assets
Other Assets | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Other Assets [Abstract] | ||
OTHER ASSETS | NOTE 3 – OTHER ASSETS The Company's other assets consist of software being developed for new product offerings that have not been placed into service and the operating lease ROU assets. The balances as of March 31, 2019 and December 31, 2018 are: 2019 2018 Software and development $ 1,919,688 $ 1,566,177 Operating Lease ROU assets, net 208,311 — $ 2,127,999 $ 1,566,177 | NOTE 3 – OTHER ASSETS The Company’s other assets consist of software being developed for new product offerings that have not been placed into service. Other assets consisted of the following at December 31, 2018 and 2017: 2018 2017 Software and development $ 1,566,177 $ 1,139,409 Other — 104,122 $ 1,566,177 $ 1.243,531 |
Intangible Assets, Net (Other T
Intangible Assets, Net (Other Than Goodwill) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) | NOTE 4 – INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) The Company's intangible assets consist of intellectual property acquired from MultiPay and FIN and are amortized over their estimated useful lives as indicated below. The following is a summary of activity related to intangible assets for the three months ended March 31, 2019: Acquired and Customer Developed Intellectual Patents Relationships Software Property Non-Compete Pending Total Useful Lives 10 Years 5 Years 10 Years 10 Years N/A Carrying Value at December 31, 2018 $ 1,128,734 $ 908,893 $ 1,191,942 $ 2,433 $ 78,182 $ 3,310,184 Additions 597 597 Amortization (39,679 ) (57,327 ) (43,432 ) (609 ) — (141,047 ) Carrying Value at March 31, 2019 $ 1,089,055 $ 851,566 $ 1,148,510 $ 1,824 $ 78,779 $ 3,169,734 The following is a summary of intangible assets as of March 31, 2019: Acquired and Customer Developed Intellectual Patents Relationships Software Property Non-Compete Pending Total Cost $ 1,587,159 $ 959,882 $ 1,759,809 $ 14,087 $ 78,779 $ 4,399,716 Accumulated amortization (498,104 ) (108,316 ) (611,299 ) (12,263 ) — (1,229,982 ) Carrying Value at March 31, 2019 $ 1,089,055 $ 851,566 $ 1,148,510 $ 1,824 $ 78,779 $ 3,169,734 Future expected amortization of intangible assets is as follows: Fiscal Year Ending December 31, Remainder of 2019 $ 423,939 2020 562,554 2021 562,554 2022 469,220 2023 418,232 Thereafter 733,235 $ 3,169,734 | NOTE 4 – INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) The Company’s intangible assets consist of intellectual property acquired from Multi-Pay and FIN in addition to internally developed software that have been placed into service. They are amortized over their estimated useful lives as indicated below. The following is a summary of activity related to intangible assets for the years ended December 31, 2018 and 2017: Customer Acquired and Intellectual Non-Compete Patents Total Useful Lives 10 Years 5 Years 10 Years 10 Years N/A Carrying Value at December 31, 2016 $ 1,446,166 $ — $ 2,000,858 $ 8,067 $ 19,200 $ 3,474,291 Additions — — — — 9,246 9,246 Write off of assets — — (212,862 ) — — (212,862 ) Amortization (158,716 ) — (231,062 ) (2,817 ) — (392,595 ) Carrying Value at December 31, 2017 1,287,450 — 1,556,934 5,250 28,446 2,878,080 Additions — 959,882 — — 49,736 1,009,618 Write off of assets — — (148,627 ) — — (148,627 ) Amortization (158,716 ) (50,989 ) (216,365 ) (2,817 ) — (428,887 ) Carrying Value at December 31, 2018 $ 1,128,734 $ 908,893 $ 1,191,942 $ 2,433 $ 78,182 $ 3,310,184 The following is a summary of intangible assets as of December 31, 2017: Customer Acquired and Intellectual Non-Compete Patents Total Cost $ 1,587,159 $ — $ 2,146,561 $ 14,087 $ 28,446 $ 3,776,253 Accumulated amortization (299,709 ) — (589,627 ) (8,837 ) — (898,173 ) Carrying Value at December 31, 2017 $ 1,287,450 $ — $ 1,556,934 $ 5,250 $ 28,446 $ 2,878,080 The following is a summary of intangible assets as of December 31, 2018: Customer Acquired and Intellectual Non-Compete Patents Total Cost $ 1,587,159 $ 959,882 $ 1,759,809 $ 14,087 $ 78,182 $ 4,399,119 Accumulated amortization (458,425 ) (50,989 ) (567,867 ) (11,654 ) — (1,088,935 ) Carrying Value at December 31, 2018 $ 1,128,734 $ 908,893 $ 1,191,942 $ 2,433 $ 78,182 $ 3,310,184 The following is the future amortization of intangible assets for the year ended December 31: 2019 $ 564,987 2020 562,554 2021 562,554 2022 469,220 2023 418,232 Thereafter 732,637 $ 3,310,184 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Payables and Accruals [Abstract] | ||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following as of March 31, 2019 and December 31, 2018: 2019 2018 Trade payables $ 330,963 $ 401,272 Accrued interest 460,334 401,667 Accrued payroll and related obligations 236,688 260,153 Operating lease liabilities 267,960 — Other accrued expenses 266,983 239,134 $ 1,562,928 $ 1,302,226 | NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following as of December 31, 2018 and 2017: 2018 2017 Trade payables $ 401,272 $ 232,842 Accrued interest 401,667 275,000 Accrued payroll and related 260,153 468,012 Other 284,134 471,331 Total $ 1,347,226 $ 1,447,185 |
Notes Payable, Net
Notes Payable, Net | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
NOTES PAYABLE, NET | NOTE 6 – NOTES PAYABLE, NET The following is a summary of notes payable as of March 31, 2019 and December 31, 2018: March 31, December 31, In January 2017, the Company issued a Senior Unsecured Note ("Note") a face value of $3,000,000, payable two years from issuance, along with an aggregate of 4,500,000 shares of Common Stock, with a fair value of $1,147,500. The Company allocated the proceeds to the common stock based on their relative fair value and recorded a discount of $830,018 to be amortized into interest expense over the two-year term of the note. The Company also paid debt issuance costs consisting of a cash fee of $120,000 and 1,020,000 shares of common stock of the Company with a fair value of $306,000. On April 30, 2018, the Company and the Noteholder agreed to extend the due date of the note until April 30, 2020 for an extension fee of 1,500,000 shares of the Common Stock issued to the Noteholder. The April 2018 change in terms of the Note payable has been determined to be a debt extinguishment in accordance with ASC 470. The reported amounts under the debt extinguishment are not significantly different than that of the Company's reported amounts. See below $ 2,000,000 $ 2,000,000 Installment loan payable related to a vehicle acquisition payable in monthly payments of $539 per month at an interest rate of 10.8% per annum payable for 36 months 16,510 — Total Principal Outstanding $ 2,016,510 $ 2,000,000 Unamortized Deferred Debt (86,845 ) (106,886 ) Unamortized Deferred Debt Issuance Costs (32,066 ) (39,466 ) Notes Payable, Net $ 1,897,599 $ 1,853,648 Notes Payable, current portion $ 4,926 $ — Notes Payable, Net of discounts and current portion 1,892,673 1,853,648 $ 1,897,599 $ 1,853,648 The following is a roll-forward of the Company's notes payable and related discounts for the three months ended March 31, 2019: Principal Debt Debt Total: Balance at December 31, 2018 $ 2,000,000 $ (39,466 ) $ (106,886 ) $ 1,853,648 Additions 16,510 — — 16,510 Amortization — 7,400 20,041 27,441 Balance at March 31, 2019 $ 2,016,510 $ (32,066 ) $ (86,845 ) $ 1,897,599 Future maturities of notes payable are as follows as of March 31, 2019: April 1, 2019 – March 31, 2020 $ 4,926 April 1, 2020 – March 31, 2021 2,005,485 April 1, 2021 – March 31, 2022 6,099 $ 2,016,510 | NOTE 6 – NOTES PAYABLE, NET On January 31, 2017, the Company entered into Conversion Agreements with several accredited investors (the “Investors”) pursuant to which substantially all Investors agreed to convert all amounts of notes payable and convertible notes payable due and payable to such persons including interest under the terms of their respective financing or loan agreement as of January 31, 2017 into shares of Company common stock at $0.10 per share. Certain Investors that had a conversion price less than $0.10 converted at such applicable conversion price. The Conversion Agreements resulted in the conversion of notes and convertible notes amounting to approximately $6,331,000 into 84,822,006 shares of Company common stock with a fair value of approximately $21,610,000. The Investors also agreed to waive any existing rights with respect to certain anti-dilution rights contained in their Stock Purchase Warrants. The Company agreed to reduce the exercise of all outstanding Stock Purchase Warrants acquired as part of a financing or loan that had an exercise price in excess of $0.10 per share to $0.10 per share. As a result of the above agreements associated with the conversion Agreements, the Company recorded a loss on the conversion of debt of approximately $6.0 million (including the effect of the elimination of related conversion feature derivative liabilities – see Note 7), a loss on the modification of warrants of approximately $0.2 million, and a loss on the modification of the derivatives of approximately $0.3 million. On February 22, 2017, the Company entered into an Agreement and Release the (“February 22, 2017 Agreement”) with a holder of certain debentures that represented final and full payment of all amounts owed under these debentures which included debt with a face value of $300,000, accrued interest of approximately $31,000, cancellation of 3,600,000 warrants previously accounted for as derivative liabilities as well as certain pledged shares (2,500,000 shares) in exchange for $300,000 in cash which was paid in May 2017. As a result of the February 22, 2017 Agreement, the Company recorded a gain on the extinguishment of notes payable of approximately $2.8 million. See note 7. The following is a summary of notes payable as of December 31, 2018 and 2017: 2018 2017 In January 2017, the Company issued a Senior Unsecured Note (“Note”) a face value of $3,000,000, payable two years from issuance, along with an aggregate of 4,500,000 shares of Common Stock, with a fair value of $1,147,500. The Company allocated the proceeds to the common stock based on their relative fair value and recorded a discount of $830,018 to be amortized into interest expense over the two-year term of the note. The Company also paid debt issuance costs consisting of a cash fee of $120,000 and 1,020,000 shares of common stock of the Company with a fair value of $306,000. On April 30, 2018, the Company and the Noteholder agreed to extend the due date of the note until April 30, 2020 for 1,500,000 shares of the Common Stock issued to the Noteholder. The April 2018 change in the terms of this note payable has been determined to be a debt extinguishment in accordance with ASC 470. The reported amounts under the debt extinguishment are not significantly different than that of the Company’s reported amounts. $ 2,000,000 $ 3,000,000 Total Principal Outstanding 2,000,000 3,000,000 Unamortized Deferred Discounts (106,886 ) (455,935 ) Unamortized Debt Issuance Costs (39,466 ) (168,345 ) Notes Payable, net of current maturities $ 1,853,648 $ 2,375,720 The following is a roll-forward of the Company’s notes payable and related discounts for the years ended December 31, 2018 and 2017: Principal Debt Issuance Debt Balance Costs Discounts Total Balance at December 31, 2016 $ 6,065,914 $ (243,055 ) $ (165,841 ) $ 5,657,018 New issuances 3,000,000 (310,790 ) (841,727 ) 1,847,483 Payments/conversions (6,065,914 ) — — (6,065,914 ) Amortization — 385,500 551,633 937,133 Balance at December 31, 2017 3,000,000 (168,345 ) (455,935 ) 2,375,720 New issuances — — — — Payments/Conversions (1,000,000 ) — — (1,000,000 ) Amortization — 128,879 349,049 477,928 Balance at December 31, 2018 $ 2,000,000 $ (39,466 ) $ (106,886 ) $ 1,853,648 Future maturities of notes payable are as follows for the calendar years 2019 and 2020: 2019 $ — 2020 2,000,000 $ 2,000,000 |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LIABILITIES | NOTE 7 – OTHER LIABILITIES Other liabilities consisted of the following as of March 31, 2091 and December 31, 2018: 2019 2018 Operating lease liabilities $ 209,998 $ — Other 45,000 45,000 $ 254,998 $ 45,000 |
Derivative Liability
Derivative Liability | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | NOTE 7 – DERIVATIVE LIABILITY Due to the potential adjustment in the conversion price associated with certain of the convertible debentures and the potential adjustment in the exercise price of certain of the warrants, the Company had determined that certain conversion features and warrants are derivative liabilities. As described in Note 6 above, the Company on January 31, 2017 entered into Conversion Agreements with Investors pursuant to which each Investor agreed to convert all amounts of debt accrued and payable to such persons including interest under the terms of their respective financing or loan agreement into shares of Company common stock at $0.10 per share. Certain Investors that had a conversion price less than $0.10 converted at such applicable conversion price. The investors at the time of conversion also agreed to waive any existing rights with respect to certain price protection and anti-dilution rights contained in their Stock Purchase Warrants. Additionally, on February 22, 2017, the Company entered into an Agreement and Release with a holder of certain debentures that represented final and full payment of all amounts owed under such debentures which included debt with a face value of $300,000, accrued interest of approximately $31,000, cancellation of 3,600,000 warrants (previously accounted for as derivative liabilities) as well as certain pledged shares (2,500,000 shares) in exchange for $300,000 in cash. These debentures also had potential price adjustments on these debentures that have also been eliminated. Therefore, as a result of the conversion and repayment of the outstanding indebtedness and related accrued interest as well as the elimination of anti-dilution rights of Stock Purchase Warrants, the Company no longer holds liabilities with derivatives requiring fair value as of December 31, 2017. A summary of derivative activity for the year ended December 31, 2017 is as follows: Balance at January 1, 2017 $ 18,056,631 Modification of derivatives 319,770 Cancellation of warrants previously accounted for as derivative liabilities and elimination of derivative conversion features resulting from conversion of related party debt to equity (11,213,573 ) Change in fair value 452,146 Reclassification of derivatives to equity upon removal of price protection in warrants (7,614,974 ) Balance at December 31, 2017 $ — Certain notes payable, convertible notes payable and related interest were converted into equity in January 2017. Accordingly, the associated derivative liability related to these notes payable, convertible notes payable and related interest is classified as long-term liabilities at December 31, 2018 in accordance with US GAAP. |
Related Party Transactions
Related Party Transactions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS Notes Payable During the quarter ended March 31, 2019, the Company recorded approximately $59,000 of interest expense under the terms and conditions of the Note (see Note 6) that is due to the Theodore Stern Revocable Trust, whose trustee Mr. Stern is a member of the Company's Board of Directors. Other Additionally, the Company rents office space in Long Beach, New York at a monthly cost of $7,425. The agreement is month to month and can be terminated on 30 days' notice. The agreement is between the Company and Bridgeworks LLC, an entity principally owned by Mr. Beck, our CEO and his family. During the three months ended March 31, 2019 and March 31, 2018, the Company paid $22,275 and $22,775, respectively. | NOTE 8 – RELATED PARTY TRANSACTIONS 2018 Transactions On August 9, 2018, the Company prepaid $1,000,000 of principal of the $3,000,000 Senior Unsecured Note dated February 1, 2017 held by the Stern Trust (Mr. Stern is a Director of the Company) plus the related accrued interest of approximately $158,000. During the year ended December 31, 2018, the Company recorded approximately $284,000 of interest expense under the terms and conditions of the Note. Additionally, the Company and the Stern Trust agreed to extend the due date of the note until April 30, 2020 for an extension fee of 1,500,000 shares of Common Stock at a market value of $420,000 based on trading price. Purchase of Common Stock In August 2018, two of the Company's Directors, Mr. Stern and Mr. Selzer, respectively purchased an additional 6,666,667 and 666,667 shares of common stock of the 2018 offering as described in Note 9. Other In connection with the 2018 offering of common stock, the Company incurred fees to Network 1 Financial Securities, Inc. ("Network 1"), a registered broker-dealer. The Network 1 fees and expenses comprise of approximately $659,000 paid in cash and approximately 2,470,000 common stock purchase warrants for five years at a price of $0.165 cents per share. A member of the Company's Board of Director's maintains a partnership with a key principal of Network 1. The Company leases its Corporate headquarters from Bridgeworks LLC, ("Bridgeworks"), a company providing office facilities to emerging companies, principally owned by Mr. Beck and his family. Mr. Beck is Chairman, Chief Executive Officer and President of the Company. During 2018, the Company paid Bridgeworks $89,100. In connection with a Confidential Settlement Agreement and General Release Agreement with Mr. Solomon, a former director and officer, as described below, the Company paid approximately $160,000 during the year ended December 31, 2018. Additionally, Mr. Solomon and the Company entered into an Agency Agreement dated September 13, 2017 pursuant to which Mr. Solomon agreed to be engaged as a non- exclusive sales agent for the Company's products on an as needed basis for a term of three years in consideration of sales commissions. During the year ended December 31, 2018, the Company paid Mr. Solomon a sales commission of approximately $84,000. 2017 Transactions Amount Due Officer and Director In November 2016, the Company issued a note payable for $13,609 to one of its officers and a Board of Director. The note was repaid in April 2017. Notes Payable In January 2017, the Company issued to the Stern Trust a Senior Unsecured Note with a face value of $3,000,000, payable two years from issuance, along with aggregate of 4,500,000 shares of Common Stock, with a fair value of $1,147,500. The loan became a Note due to one of its Board of Directors upon Mr. Stern's election in September 2017. During 2017, the Company recorded $275,000 of interest expense under the terms and conditions of the loan. Convertible Notes Payable On January 31, 2017, the Company entered into Conversion Agreements with Mr. Selzer, a director of the Company and Vista Associates, a family partnership pursuant to which Mr. Selzer converted $150,000 in debt plus interest into 1,753,500 shares of common stock and $40,000 of debt plus interest into 1,537,778 shares of common stock. Purchase of Common Stock In March 2017, Mr. Selzer, a Board of Director, purchased an additional 500,000 shares of common stock and in December 2017, Mr. Stern purchased an additional 2,000,000 shares of common stock in the capital stock offerings as described in Note 9. Other In connection with the Company's ability to secure third-party financing during the year ended December 31, 2017, the Company paid Network 1 Financial Securities, Inc. ("Network 1"), a registered broker-dealer, cash fees of $710,000, issued Network 1 2,200,000 shares of common stock and provided 1,153,846 common stock purchase warrants for five years at a price of $0.143 cents per share. A member of the Company's Board of Directors maintains a partnership with a key principal of Network 1. The Company leases it Corporate headquarters from Bridgeworks LLC, ("Bridgeworks"), a company providing office facilities to emerging companies, principally owned by Mr. Beck and his family. Mr. Beck is Chairman, Chief Executive Officer and President of the Company. During 2017, the Company paid Bridgeworks $71,950. Additionally, as noted above Parity provided consulting services to the Company prior to Phillip Beck becoming an executive officer. During 2017, the Company paid Parity $34,964 for consulting services. On September 13, 2017, one of its former officers and a former director (Douglas Solomon) of the Company entered into a Confidential Settlement Agreement and General Release (the "Settlement Agreement") pursuant to which the Offer Letter and Executive Retention Agreement entered between the Company and Mr. Solomon dated January 31, 2017 were terminated effective September 1, 2017 and Mr. Solomon resigned as Executive Director, Government Relations Enterprise Security upon execution of the Settlement Agreement. The Company agreed to pay Mr. Solomon $8,048.13 representing unused 2017 vacation entitlement and pay for one day, reimburse Mr. Solomon for all expenses consistent with the Company's reimbursement policy and pay Mr. Solomon's COBRA employee only benefits through September 2018 if Mr. Solomon elected to be included under such coverage. In addition, the Company acknowledged that the 20,000,000 stock options previously granted to Mr. Solomon have vested effective as of September 1, 2017. The parties also provided mutual releases from all claims, demands, actions, causes of action or liabilities. As further consideration for entering into the Settlement Agreement, Mr. Solomon and the Company entered into an Agency Agreement dated September 13, 2017 pursuant to which Mr. Solomon agreed to be engaged as a non- exclusive sales agent for the Company's products on an as needed basis for a term of three years in consideration of sales commissions including a monthly non-refundable minimum commission to be paid for 24 months. During the year end December 31, 2017, the Company paid Mr. Solomon approximately $54,000. |
Stockholder's Equity
Stockholder's Equity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
STOCKHOLDER'S EQUITY | NOTE 9 STOCKHOLDER'S EQUITY Common Stock There was no common stock activity during the three months ended March 31, 2019. Warrants The was no warrant activity for the three months ended March 31, 2019: Number of Weighted Weighted Outstanding at December 31, 2018 46,201,477 $ 0.08 1.9 Years Outstanding at March 31, 2019 46,201,477 $ 0.08 1.6 Years Stock Options The Company did not grant any stock options in the first three months of 2019. During the year ended December 31, 2018, the Company determined the grant date fair value of the options granted using the Black Scholes Method. The following assumptions were used in the year ended December 31, 2018: Expected Volatility – 79-93% Expected Term – 2.5 – 5.9 Years Risk Free Rate – 2.4 – 3.0% Dividend Rate – 0.00% Activity related to stock options for the three months ended March 31, 2019 is summarized as follows: Weighted Weighted Number of Exercise Contractual Aggregate Shares Price Term (Yrs.) Intrinsic Value Outstanding as of December 31, 2018 106,253,339 $ 0.20 7.4 $ 1,989,163 Granted — — Forfeitures — — Outstanding as of March 31, 2019 106,253,339 0.20 7.1 $ 1,989,163 Exercisable as of March 31, 2019 97,165,278 $ 0.20 7.1 $ 1,886,038 The following table summarizes stock option information as of March 31, 2019: Weighted Average Contractual Exercise Price Outstanding Life (Yrs.) Exercisable $ 0.00001 3,500,000 6.5 3,500,000 0.05 32,783,339 7.3 30,720,833 0.10 27,200,000 7.5 25,811,111 0.12 970,000 9.5 — 0.13 250,000 8.6 83,333 0.15 2,800,000 6.6 2,800,000 0.22 2,750,000 8.8 750,000 0.25 2,500,000 8.6 1,166,667 0.26 500,000 9.1 — 0.29 1,000,000 8.0 333,334 0.40 1,000,000 6.9 1,000,000 0.45 31,000,000 6.6 31,000,000 106,253,339 7.1 97,165,278 During the three months ended March 31, 2019, the Company recognized approximately $349,000 of stock-based compensation expense related to options of which non-employees expense was approximately $75,000. As of March 31, 2019, there was approximately $1,049,000 of unrecognized compensation costs related to stock options outstanding of which approximately $184,000 was related to non-employees and will be expensed through 2022. | NOTE 9 STOCKHOLDERS’ EQUITY On September 28, 2017, the stockholders of the Company approved increasing the number of authorized shares of common stock from 500,000,000 to 1,000,000,000. The Company had 478,950,996 and 403,311,988 shares issued and outstanding as of December 31, 2018 and 2017, respectively. In addition, the Company is authorized to issue 20,000,000 shares of preferred stock. Common Stock 2018 Common Stock Transactions ● During the year ended 2018, the Company granted approximately 2,456,000 shares of restricted stock to the non-employee Directors in connection with their compensation to serve as Board Members. The shares were valued at the fair value at the date of grant and vest quarterly. The restricted shares granted to the Board Member for compensation is for the period November 1, 2017 to October 31, 2019. Additionally, during the year ended 2018, the Company granted 2,750,000 shares of restricted stock to employees of which 2,000,000 will be vested upon achieving certain performance criteria and 750,000 will vest over a three-year period. ● The Company also issued 456,735 shares of common stock to a service provider in satisfaction of $97,126 due for services. ● During the year ended December 31, 2018, investors exercised 4,433,333 warrants at an average price of $0.05 cents per share on a cashless exercise basis in exchange for approximately 3,500,000 shares of common stock of the Company. Additionally, option holders exercised approximately 3,200,000 vested options at an average price of $0.13 cents for approximately 1,600,000 shares of common stock. ● During the year ended December 31, 2018, the Company cancelled 728,448 shares of common stock in settlement of amounts due from the Multipay acquisition. ● In August 2018, the Company entered into Subscription Agreements with accredited investors (the “August 2018 Accredited Investors”) pursuant to which the August 2018 Accredited Investors agree to purchase an aggregate of approximately 64,072,000 shares of the Company’s common stock for an aggregate purchase price of approximately $9,611,000. In connection with this private offering, the Company paid Network 1, a registered broker-dealer, a cash fee of approximately $629,000 and issued approximately 2,470,000 common stock purchase warrants valued at approximately $314,000 that are exercisable for a term of five years at an exercise price of $0.165 per share. 2017 Common Stock Transactions ● As described in Note 6, on January 31, 2017, in connection with the issuance of a $3,000,000 Senior Unsecured Note, an aggregate of 4,500,000 shares of Common Stock was issued to the Stern Trust and the Company issued (Network 1), a registered broker-dealer, 1,200,000 shares of common stock of the Company in conjunction with its services. ● As described in Note 6 on January 31, 2017, the Company entered into Conversion Agreements with Investors pursuant to which each Investor agreed to convert all amounts of debt accrued and payable to such person including interest under the terms of their respective financing or loan agreement as of January 31, 2017 into shares of Company common stock at $0.10 per share. The Conversion Agreements resulted in the issuance of an approximately of 84,822,000 shares of Company common stock. ● On March 22, 2017, the Company entered into Subscription Agreements with several accredited investors (the “March 2017 Accredited Investors”) pursuant to which the March 2017 Accredited Investors agreed to purchase an aggregate of 20,000,000 shares of the Company’s common stock for an aggregate purchase price of $4,000,000. The proceeds were received in 2017. In connection with this private offering, the Company paid Network 1, a registered broker-dealer, a cash fee of $240,000 and issued Network 1 1,000,000 shares of common stock of the Company. ● Additionally, the Company cancelled certificates for 2,500,000 shares of common stock acquired in conjunction with the purchase of certain debentures. ● During the year ended December 31, 2017, the Company issued approximately 594,000 shares of common stock as consideration for services. The fair value of the shares, totaling approximately $140,000 was estimated based on the publicly quoted trading price and recorded as expense. ● On December 18, 2017, the Company entered into Subscription Agreements with accredited investors (the “December 2017 Accredited Investors”) pursuant to which the December 2017 Accredited Investors agreed to purchase an aggregate of approximately 38,464,000 shares of the Company’s common stock for an aggregate purchase price of $5,000,000. In connection with this private offering, the Company agreed to pay Network 1, a registered broker-dealer, a cash fee of $350,000 and issue common stock purchase warrants valued at $181,154 to acquire 1,153,846 shares of common stock of the Company exercisable for a term of five years at an exercise price of $0.143 per share. ● During the year ended December 31, 2017, the Company granted 15,000,000 shares of restricted stock to two executive offers which will vest upon achieving certain performance criteria. The criteria for the 2018 and 2017 performance based restricted stock have not been met as of December 31, 2018 Warrants ● During the year ended 2018, investors exercised 4,433,333 warrants at an average price of $0.05 cents per share on a cashless exercise basis in exchange for shares of common stock of the Company. ● During the year ended December 31, 2017, the Company issued 1,153,846 warrants in connection with the issuance of approximately 38,461,500 shares of common stock at an exercise price of $.143 per share for a period of five years. ● During the year ended December 31, 2017, an investor exercised 528,000 warrants at $0.05 cents for an aggregate price of $26,400 in exchange for shares of common stock of the Company. ● On February 22, 2017, the Company entered the “February 22, 2017 Agreement”) with a holder of certain debentures that represented final and full payment of all amounts owed under these debentures which included debt with a face value of $300,000, accrued interest of approximately $31,000, and cancellation of 3,600,000 warrants. See Note 6. The following is a summary of the Company’s warrant activity for the years ended December 31, 2018 and 2017: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life Outstanding at January 1, 2017 51,138,697 $ 0.11 2.8 Years Granted 1,153,846 $ 0.14 5.0 Years Exercised/Cancelled (4,128,000 ) $ 0.08 Outstanding at December 31, 2017 48,164,543 $ 0.11 2.9 Years Granted 2,470,267 $ 0.14 5.0 Years Exercised/Cancelled (4,333,333 ) $ 0.05 — Outstanding at December 31, 2018 46,201,477 $ 0.08 1.9 Years Stock Options The Company has adopted the Ipsidy Inc. 2014 Equity Compensation Plan and the 2017 Incentive Stock Plan. The Company has no other stock options plans in effect as of December 31, 2018. On November 21, 2014, our Board of Directors authorized the Ipsidy Inc. Equity Compensation Plan (the “2014 Plan”). On September 28, 2017, the shareholders of the Company approved the 2017 Incentive Stock Plan (“2017 Incentive Plan”). The following is a summary of principal features of the 2014 Plan and the 2017 Incentive Plan. The summaries, however, does not purport to be a complete description of all the provisions of each plan. The 2014 Plan covers 25,000,000 shares of common stock and the 2017 Incentive Plan covers 70,000,000 shares of common stock. Both Plans are administered by the Compensation Committee. The terms of Awards granted under the plans shall be contained in an agreement between the participant and the Company and such terms shall be determined by the Compensation Committee consistent with the provisions of the applicable plan. The terms of Awards may or not require a performance condition in order to vest the equity comprised in the relevant Award. The terms of each Option granted shall be contained in a stock option agreement between the optionee and the Company and such terms shall be determined by the Compensation Committee consistent with the provisions of the applicable plan The Company has also granted equity awards that have not been approved by security holders. 2018 Stock Option Issuances ● During the year ended December 31, 2018, the Company granted options to acquire 6,220,000 shares of common stock to ten employees and one non-employee of which 970,000 are exercisable at an average price of $0.12, 3,250,000 options are exercisable at an average price of $0.22 per share, and 2,000,000 are exercisable at $0.25 per share. The options have a term of ten years, were granted at fair market value at the date of grant .and vest over three years. The grant date fair value of the options totaled approximately $962,000, which will be charged to expense over the three-year vesting term of which approximately $231,000 was related to non-employees. 2017 Stock Option Issuances ● In connection with the engagement of the CEO and Chief Financial Officer (“CFO”) on January 31, 2017, the Company granted the CEO and CFO stock options to acquire 15,000,000 shares and 5,000,000 shares of common stock of the Company respectively at an exercise price of $0.10 per share for a period of ten years. Further, the Company has entered into Restricted Stock Purchase Agreements with the CEO and CFO in which they were provided 15,000,000 shares and 5,000,000 shares of common stock at a per share price of $0.0001, which shares of common stock vest upon achieving a performance threshold which has not been achieved at December 31, 2018. ● Additionally, the Company granted two employee stock options to acquire 1,250,000 shares of common stock at an exercise price representing fair value at the time of grant. The Company determined the grant date fair value of the options granted during the years ended December 31, 2018 and 2017 using the Black Scholes Method and the following assumptions: 2018 2017 Expected Volatility 79.0% to 93.0% 79.0% to 93.0% Expected Term 2.5 – 5.9 Years 2.5 – 5.9 Years Risk Free Rate 2.42% – 3.00% 1.16% to 1.49% Dividend Rate 0.00% 0.00% Activity related to stock options for the years ended December 31, 2018 and 2017 is summarized as follows: Number of Shares Weighted Average Exercise Price Weighted Average Contractual Term (Yrs.) Aggregate Intrinsic Value Outstanding as of January 1, 2017 86,925,000 $ 0.21 8.7 $ 7,698,650 Granted 21,250,000 $ 0.11 10.0 $ 7,475,000 Forfeited (4,966,669 ) $ 0.08 — $ — Outstanding as of December 31, 2017 103,208,331 $ 0.19 9.5 $ 10,023,400 Granted 6,220,000 $ 0.22 10.0 $ 2,868,750 Exercised (3,174,992 ) $ 0.13 — $ — Outstanding as of December 31, 2018 106,253,339 $ 0.20 8.3 $ 11,457,291 Exercisable as of December 31, 2018 92,925,694 $ 0.20 7.4 $ 3,316,208 The following table summarizes stock option information as of December 31, 2018: Exercise Price Outstanding Weighted Average Exercisable $ 0.0001 3,500,000 6.8 3,500,000 $ 0.05 32,783,339 7.6 28,314,583 $ 0.1 27,200,000 7.8 24,977,778 $ 0.12 970,000 9.8 — $ 0.13 250,000 8.8 83,333 $ 0.15 2,800,000 6.9 2,800,000 $ 0.22 2,750,000 9.0 750,000 $ 0.25 2,500,000 8.9 500,000 $ 0.26 500,000 9.3 — $ 0.29 1,000,000 8.3 — $ 0.4 1,000,000 7.2 1,000,000 $ 0.45 31,000,000 6.9 31,000,000 7.4 106,253,339 92,925,694 As of December 31, 2018, there was approximately $1,138,000 and $183,000 of unrecognized compensation costs related to employee stock options and non-employee stock options, respectively, outstanding which will be recognized in 2019 through 2021. The company will recognize forfeitures as they occur. Stock compensation expense for the years ended December 31, 2018 and 2017 was approximately $2,430.000 and $5,651,000, respectively. The criteria for the 2018 and 2017 performance based restricted stock have not been met as of December 31, 2018. |
Direct Financing Lease
Direct Financing Lease | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
DIRECT FINANCING LEASE | NOTE 10 – DIRECT FINANCING LEASE In September 2015, the Company and an entity in Colombia entered into a rental contract for the rental of 78 kiosks to provide cash collection and fare services at transportation stations. The lease term began in May 2016 when the kiosk was installed and operational and when the lease commenced. The term of the rental contract is ten years at an approximate monthly rental of $11,900. The lessee has the option at the end of the lease term to purchase each unit for approximately $40. The term of the lease approximates the expected economic life of the kiosks. The lease was accounted for as a direct financing lease. The Company has recorded the transaction as it net investment in the lease and will receive monthly payments of $11,856 before estimated executory costs, or $142,272, annually, to reduce investment in the lease and record income associated with the related amount due. Executory costs are estimated to be $1,677 month and initial direct costs are not considered significant. The transaction resulted in incremental revenue in the quarter ended March 31, 2019 of approximately $16,000. The equipment is subject to direct lease valued at approximately $748,000. At the inception of the lease term, the aggregate minimum future lease payments to be received was approximately $1,422,000 before executory cost. Unearned income recorded at the inception of this lease was approximately $474,000 and will be recorded over the term of the lease using the effective income rate method. Future minimum lease payments to be received under the lease for the next five years and thereafter are as follows: Remainder 2019 $ 91,611 2020 122,148 2021 122,148 2022 122,148 2023 122,148 Thereafter 285,012 Sub-total 865,215 Less deferred revenue (260,552 ) Net investment in lease $ 604,663 | NOTE 10 – DIRECT FINANCING LEASE In September 2016, the Company and an entity in Colombia entered into a rental contract for the rental of 78 kiosks to provide cash collection and fare services at transportation stations. The lease term commenced in May 2017 when the kiosks were installed and operational. The term of the rental contract is ten years at an approximate monthly rental of $11,900. The lessee has the option at the end of the lease term to purchase each unit for approximately $40. The term of the lease approximates the expected economic life of the kiosks. As such, the lease was accounted for as a direct financing lease. The Company has recorded the transaction at its net investment in the lease and will receive monthly payments of $11,856 before estimated executory costs, or $142,272, annually, to reduce investment in the lease and record income associated with the related amount due. Executory costs are estimated to be $1,677 month and initial direct costs are not considered significant. The transaction resulted in incremental revenue in the years ended December 31, 2018 and 2017 of approximately $69,400 and $74,700, respectively. The equipment under the capital lease is valued at approximately $748,000. At the inception of the lease term, the aggregate minimum future lease payments to be received is approximately $1,422,000 before executory cost. Unearned income is recorded at the inception of this lease was approximately $474,000 and will be recorded over the term of the lease using the effective income rate method. Future minimum lease payments to be received under the lease for the next five years and thereafter are as follows: Year Ending December 31, 2019 $ 122,148 2020 122,148 2021 122,148 2022 122,148 2023 122,148 Thereafter 285,012 895,752 Less deferred revenue (276,989 ) Net investment in lease $ 618,763 |
Lease Obligation Payable
Lease Obligation Payable | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
LEASE OBLIGATION PAYABLE | NOTE 11 – LEASE OBLIGATION PAYABLE The Company entered into a lease in March 2017 for the rental of its printer for its secured plastic and credential card products business under an arrangement that is classified as a finance lease. The leased equipment is amortized on a straight-line basis over its lease term including the last payment (61 payments) which would transfer ownership to the Company. Total amortization related to the lease equipment as of March 31, 2019 is $66,970. The following is a schedule showing the future minimum lease payments under finance lease by year and the present value of the minimum lease payments as of March 31, 2019. The interest rate related to the lease obligation is 12% and the maturity date is March 31, 2022. Year Ending Remainder of 2019 $ 32,322 2020 43,096 2021 43,096 2022 10,774 Total minimum lease payments 129,288 Less: Amount representing interest (21,162 ) Present value of minimum lease payments $ 108,126 | NOTE 11 – LEASE OBLIGATION PAYABLE The Company entered into a lease in March 2017 for the rental of its printer for its secured plastic and credential card products business under an arrangement that is classified as a capital lease. The leased equipment is amortized on a straight line basis over its lease term including the last payment (61 payments) which would transfer ownership to the Company. Total amortization related to the lease equipment as of December 31, 2018 is $58,934. The following is a schedule showing the future minimum lease payments under capital lease by year and the present value of the minimum lease payments as of December 31, 2018. The interest rate related to the lease obligation is 12% and the maturity date is March 31, 2022. Future cash payment related to this capital lease are as follow for the calendar years ending from 2019-2022. 2019 $ 43,096 2020 43,096 2021 43,096 2022 10,774 Total minimum lease payments 140,062 Less: Amount representing interest (24,554 ) Present value of minimum lease payments $ 115,508 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 INCOME TAXES The Company accounts for income taxes in accordance with ASC 740 which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim period, disclosure and transition. There were no unrecognized tax benefits as of December 31, 2018 and 2017. The Company’s loss before income taxes from US and Foreign sources for the years ended December 31, 2018 and 2017, are as follows: 2018 2017 United States $ (8,775,452 ) $ (15,488,668 ) Outside United States (1,221,919 ) (1,964,180 ) Loss before income taxes $ (9,997,371 ) $ (17,452,848 ) The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended December 31, 2018 and 2017: 2018 2017 US Federal Statutory Tax Rate 21.00 % 34.00 % State taxes 4.35 % 3.63 % Permanent items — (5.94 %) Amortization of Discount - APIC — 2.04 % NOL True-Ups (2.48 %) (2.78 %) Change in tax rates — (23.88 %) Change in valuation allowance (27.82 %) (7.07 %) 0.00 % 0.00 % The tax effects of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2018 and 2017 are summarized as follows: 2018 2017 Deferred Tax Assets Net Operating Loss $ 5,981,004 $ 4,305,729 Stock Options 5,890,565 5,276,885 Charitable Contributions 1,267 1,267 Basis Difference in Intangible Assets 99,296 39,125 Basis Difference Fixed Assets 5,096 — Accrued Payroll 42,939 97,127 Valuation Allowance (11,983,078 ) (9,559,975 ) Total Deferred Tax Asset 37,089 160,158 Debt Discounts (27,086 ) (115,553 ) Debt Issuance Costs (10,003 ) (42,667 ) Basis Difference Fixed Assets — (1,938 ) Total Deferred Tax Liability (37,089 ) (160,158 ) Net Deferred Tax Asset $ — $ — As of December 31, 2011, the Company has available federal net operating loss carry forward of $19.9 million and state net operating loss carry forwards of $19.9 million, the most significant of which expire from 2020 until 2037. Additionally, the Company has income tax net operating loss carryforwards related to our international operations which have an indefinite life. The Company assess the recoverability of its net operating loss carry forwards and other deferred tax assets and records a valuation allowance to the extent recoverability does not satisfy the “more likely than not” recognition criteria. The Company continues to maintain the valuation allowance until sufficient positive evidence exists to support full or partial reversal. As of December 31, 2018 the Company had a valuation allowance totaling $12.0 million against its deferred tax assets, net of deferred tax liabilities, due to insufficient positive evidence, primarily consisting of losses within the taxing jurisdictions that have tax attributes and deferred tax assets. The Tax Cuts and Jobs Act of 2017 was signed into law on December 22, 2017. The law included significant changes to the US Corporate income tax system, including a Federal corporate rate reduction from 35% to 21%, limitations on the deductibility of interest expense and executive compensation and the transition of US international taxation from a worldwide tax system to a territorial tax system. As the Company is not currently a taxpayer due to ongoing operating losses, the impact on the financial statements is not material. We have reflected the lower rates in the calculation above in the December 31, 2018 information. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company is a party to various legal or administrative proceedings arising in the ordinary course of our business. While any litigation contains an element of uncertainty, we have no reason to believe the outcome of such proceedings will have a material adverse effect on the financial condition or results of operations of the Company. Leases For the three months ended March 31, 2019, lease expense was approximately $127,000 inclusive of short-term leases. The lease related balances included in the Consolidated Balance Sheet as of March 31, 2019 were as follows: Assets: Current portion of operating lease ROU assets - included in other current assets $ 266,225 Operating lease ROU assets – included in Other Assets $ 208,311 Liabilities: Current portion of ROU liabilities – included in Accounts payable and accrued expenses $ 267,960 Long-term portion of ROU liabilities – included in Other liabilities 209,998 Total operating lease liabilities $ 477,958 The weighted average lease term is 1.8 years and weighted average discount rate is 13.55%. The following table presents the maturity of the Company's operating lease liabilities as of March 31, 2019: Remainder of 2019 $ 235,467 2020 183,519 2021 92,391 2022 46,196 Total operating lease payments 557,573 Less: Imputed interest (79,615 ) Total operating lease liabilities $ 477,958 The Company leases approximately 2,100 square feet of office space in Plantation, Florida. Monthly at an approximate rental rate of approximately $2,700 per month with a 3% increase on each annual anniversary. The Company will be responsible for their respective share of building expenses. The lease term is through August 2020. Additionally, the Company rents office space in Long Beach, New York at a monthly cost of $7,425. The agreement is month to month and can be terminated on 30 days' notice. The agreement is between the Company and Bridgeworks LLC, an entity principally owned by Mr. Beck, our CEO and his family. In October 2018, the Company a entered into an office lease in Alpharetta, Ga. for approximately $3,800 per month through March 31, 2020 or through the termination of the master lease. The Company lease an office location and warehouse in Bogota, Colombia. In April 2017, MultiPay S.A.S. entered an office lease beginning April 22, 2017 for two years. The new lease cost is approximately $8,500 per month with an inflation adjustment after one year. The lease is automatically extended for one additional year unless written notice to the contrary is provided at least six months in advance. Furthermore, the Company leases an apartment at approximately $2,000 a month for one of the management team. The Company also leases space for its operation in South Africa. The current lease is through June 30, 2022 and the approximate monthly rent is $8,000. | NOTE 13 COMMITMENTS AND CONTINGENCIES Legal Matters From time to time the Company is a party to various legal or administrative proceedings arising in the ordinary course of our business. While any litigation contains an element of uncertainty, we have no reason to believe that the outcome of such proceedings will have a material adverse effect on the financial condition or results of operations of the Company. Executive Compensation As of December 31, 2018, the Company had employment agreements with certain key members of the management team providing base salary amounts and provisions for stock compensation, cash bonuses and other benefits to be granted at the discretion of the Board of Directors. As of January 31, 2017, the Company made certain changes to the management team and its Board of Directors and entered into Executive Retention Agreements with four members of the management team. The Executive Retention Agreements include provisions for base salary, bonus amounts upon meeting certain performance milestones, severance benefits for involuntary termination from a change in control or other events as defined in their respective agreements. Additionally, the vesting of certain awards could be accelerated upon a change in control (as defined). Operating Leases The Company leases approximately 2,100 square feet of office space in Plantation, Monthly at an approximate rate of $2,700 per month with a 3% increase on each annual anniversary. The company will be responsible for their respective share of building expenses. The lease extends to August 2020. Additionally, the Company leased office spaces in Long Beach, New York at a monthly rent of $7,425. The lease can be terminated on 30 day’s notice. In October 2018, the Company a sublease entered into an office lease in Alpharetta, Ga. for approximately $3,800 per month through March 31, 2020 or through the termination of the master lease. In addition, the Company is party to operating leases for its office location and warehouse in Colombia. In April 2017, MultiPay S.A.S. entered into a new office lease beginning April 22, 2017 for two years. The new lease cost is approximately $9,000 per month with an inflation adjustment after one year. The lease was extended for one additional year. Furthermore, the Company leases an apartment at approximately $1,700 a month The Company also leases space for its operation in South Africa. The current lease is through June 30, 2022 and the approximate monthly rent is $8,000. Rent expense for the years ended December 31, 2018 and 2017 was approximately $381,000 and $360,000 respectively. The following is a schedule, by years, of the future minimum lease payments required under non-convertible operating leases as of December 31, 2018. 2019 $ 289,000 2020 183,500 2021 92,400 2022 46,200 Total $ 611,100 The Company has entered an agreement with a facial recognition software company for the grant of a perpetual license for commercial use (unless terminated for breach by either party). The initial payment under the license of $120,000 was paid in 2018 with two additional installments due on the first and second anniversary of the Effective Date of the arrangement amounting to $80,000 and $40,000, respectively. Additionally, the Company has an agreement with an identity consulting organization to provide services through September 30, 2019 at a rate of $15,000 per month. |
Segment Information
Segment Information | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting [Abstract] | ||
SEGMENT INFORMATION | NOTE 13 – SEGMENT INFORMATION General information The segment and geographic information provided in the table below is being reported consistent with the Company's method of internal reporting. Operating segments are defined as components of an enterprise for which separate financial information is available and which is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. The CODM regularly reviews net revenue and gross profit by geographic regions. The Company's products and services operate in two reportable segments; identity management and payment processing. Information about revenue, profit/loss and assets The CODM evaluates performance and allocates resources based on net revenue and operating results of the geographic region as the current operations of each geography are either primarily identity management or payment processing. Identity management revenue is generated in North America and Africa and payment processing is earned in South America which are the three geographic regions of the Company. We have included the lease income in payment processing are the leases are related to unattended ticking kiosks. Long lived assets are in North America, South America and Africa. Most assets are intangible assets recorded from the acquisition of MultiPay (South America) in 2015 and FIN Holdings (North America and Africa) in 2016. Assets for North America, South America and Africa amounted to approximately $7.3 million, $0.7 million and $2.2 million, respectively, of which $4.9 million, $0.1 million and $1.7 million related to goodwill as of March 31, 2019. Analysis of revenue by segment and geographic region and reconciliation to consolidated revenue, gross profit, and net loss are provided below. The Company has included in the schedule below an allocation of corporate overhead based on management's estimate of resource requirements. Three Months Ended March 31, March 31, Net Revenues: North America $ 227,041 $ 117,308 South America 125,328 79,088 Africa 388,009 329,393 740,378 525,789 Identity Management 615,050 446,701 Payment Processing 125,328 79,088 740,378 525,789 Loss From Operations North America (737,962 ) (1,047,886 ) South America (1,256,952 ) (1,329,590 ) Africa (173,460 ) (131,719 ) (2,168,374 ) (2,509,195 ) Identity Management (911,422 ) (1,179,605 ) Payment Processing (1,256,952 ) (1,329,590 ) (2,168,374 ) (2,509,195 ) Interest Expense (86,890 ) (239,169 ) Other income/(expense) 6,226 — Loss before income taxes (2,249,038 ) (2,748,364 ) Income tax expense (13,701 ) (4,561 ) Net loss $ (2,262,739 ) $ (2,752,925 ) | NOTE 14 – SEGMENT INFORMATION General information The segment and geographic information provided in the table below is being reported consistent with the Company’s method of internal reporting. Operating segments are defined as components of an enterprise for which separate financial information is available and which is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM regularly reviews net revenue and gross profit by geographic regions. The Company products and services operate in two reportable segments; identity management and payment processing. Information about revenue, profit/loss and assets The CODM evaluates performance and allocates resources based on net revenue and operating results of the geographic region as the current operations of each geography are either primarily identity management or payment processing. Identity management revenue is generated in North America and Africa and payment processing is earned in South America which are the three geographic regions of the Company. We have included the lease income in payment processing are the leases are related to unattended ticking kiosks. Long lived assets are in North America, South America and Africa. Most assets are intangible assets recorded from the acquisition of MultiPay (South America) in 2015 and FIN Holdings (North America and Africa) in 2016. Assets for North America, South America and Africa amounted to approximately $7.4 million, $.8 million and $2.1 million respectively of which $4.9 million, $.2 million and $1.6 million related to goodwill as of December 31, 2018. Analysis of revenue by segment and geographic region and reconciliation to consolidated revenue, gross profit, and net loss are provided below. The Company has included in the schedule below an allocation of corporate overhead based on management’s estimate of resource requirements. Year Ended December 31, 2018 2017 Net Revenues: North America $ 1,941,866 $ 518,023 South America 476,234 394,320 Africa 1,410,893 1,391,263 3,828,993 2,303,606 Identity Management 3,352,759 1,909,286 Payment Processing 476,234 394,320 3,828,993 2,303,606 Loss From Operations North America (1,959,125 ) (2,672,161 ) South America (6,540,029 ) (8,300,967 ) Africa (824,065 ) (1,035,987 ) (9,323,219 ) (12,009,115 ) Identity Management (2,783,190 ) (3,708,148 ) Payment Processing (6,540,029 ) (8,300,967 ) (9,323,219 ) (12,009,115 ) Gain (loss) on derivative liability — (4,106,652 ) Interest Expense (757,801 ) (1,337,081 ) Other income/(expense) 83,649 0 Loss before income taxes (9,997,371 ) (17,452,848 ) Income tax expense (30,242 ) (28,781 ) Net loss $ (10,027,613 ) $ (17,481,629 ) |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Going Concern | Going concern As of March 31, 2019, the Company had an accumulated deficit of approximately $78.7 million. For the three months ended March 31, 2019, the Company earned revenue of approximately $0.7 million and incurred a loss from operations of approximately $2.2 million. The reports of our independent registered public accounting firm on our consolidated financial statements for the years ended December 31, 2018 and 2017 contained an explanatory paragraph regarding our ability to continue as a going concern based upon our net losses and accumulated deficit. These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from the Company's current shareholders, the ability of the Company to obtain additional equity financing to continue operations, the Company's ability to generate sufficient cash flows from operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues and cash flows. There is no assurance that the Company will ever be profitable or be able to secure funding or generate sufficient revenues to sustain operations. As such, there is substantial doubt about the Company's ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. | Going Concern As of December 31, 2018, the Company had an accumulated deficit of approximately $76.4 million. For the year ended December 31, 2018, the Company earned revenue of approximately $3.8 million and incurred a loss from operations of approximately $9.3 million. These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from the Company’s current shareholders, the ability of the Company to obtain additional equity financing to continue operations, the Company’s ability to generate sufficient cash flows from operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues and cash flows. As there can be no assurance that the Company will be able to achieve positive cash flows (become profitable) and raise sufficient capital to maintain operations there is substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. |
Net Loss per Common Share | Net Loss per Common Share The Company computes net loss per share in accordance with FASB ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the statement of operations. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible notes and stock warrants, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options, warrants and conversion of convertible notes. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the three months ended March 31, 2019 and 2018 because their effect was antidilutive: Security 2019 2018 Stock Options 106,253,339 107,958,331 Warrants 46,201,477 45,964,543 Total 152,454,816 153,922,874 | Net Loss per Common Share The Company computes net loss per share in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible notes and stock warrants, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options, warrants and conversion of convertible notes. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the years ended December 31, 2018 and 2017 because their effect was antidilutive: 2018 2017 Stock Options 106,253,339 103,208,331 Warrants 46,201,477 48,164,543 Total 152,454,816 151,372,874 |
Inventories | Inventories Inventories of kiosks held by IDGS S.A.S are stated at the lower of cost (using the first-in, first-out method) or net realizable value. The kiosks provide electronic ticketing for transit systems. Inventory of plastic/ID cards, digital printing material, which are held by Cards Plus Pty Ltd., are at the lower of cost (using the average method) or net realizable value. The Plastic/ID cards and digital printing material are used to provide plastic loyal ID and other types of cards. Inventories at March 31, 2019 and December 31, 2018 consist of kiosks that were not placed into service and are held for sale and cards inventory. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period. As of March 31, 2019 and December 31, 2018, the Company recorded an inventory valuation allowance of approximately $589,000 and $707,000, respectively, to reflect net realizable value of the kiosks that are being held for sale and the Company believes no valuation allowance was necessary regarding the cards inventory. | Inventories Inventories of kiosks held by IDGS S.A.S are stated at the lower of cost (using the first-in, first-out method) or net realizable value. The kiosks provide electronic ticketing for transit systems. Inventory of plastic/ID cards, digital printing material, which are held by Cards Plus Pty Ltd., are at the lower of cost (using the average method) or market. The Plastic/ID cards and digital printing material are used to provide plastic loyal ID and other types of cards. Inventories at December 31, 2018 and December 31, 2017 consist of cards inventory and kiosks that have not been placed into service. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period. As of December 31, 2018 and December 31, 2017, the Company recorded an inventory valuation allowance of approximately $707,000 and $353,000, respectively, to reflect net realizable value of kiosks that are being held for sale and the Company believes no valuation allowance was necessary regarding the cards inventory. |
Leases | Leases In February 2016, the FASB issued ASU No. 2016-02 (Topic 842). Topic 842 amends several aspects of lease accounting, including requiring lessees to recognize leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. In July 2018, the FASB issued supplemental adoption guidance and clarification to Topic 842 within ASU 2018-10 "Codification Improvements to Topic 842, Leases" and ASU 2018-11 "Leases (Topic 842): Targeted Improvements." The new guidance aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. A modified retrospective application is required with an option to not restate comparative periods in the period of adoption. The Company, effective January 1, 2019 has adopted the provisions of the new standard. The Company decided to use the practical expedients available upon adoption of Topic 842 to aid the transition from current accounting to provisions of Topic 842. The package of expedients will effectively allow Ipsidy to run off existing leases, as initially classified as operating or financing and classify new leases after implementation under the new standard as the business evolves. The practical expedients elected by the Company in transition permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs. Furthermore, we will elect the short-term lease recognition exemption for leases with a term of 12 or less months which are not reasonably certain of exercising any available renewal options that would extend past 12 months. Additionally, we will continue to account for the executory costs of the direct financing lease as previously concluded and the initial direct costs were not considered significant. The Company has operating leases principally for offices and some of the leases have renewal options. Management evaluates each lease independently to determine the purpose, necessity to its future operations in addition to other appropriate facts and circumstances. We adopted Topic 842 using a modified retrospective approach for all existing leases at January 1, 2019. The adoption of Topic 842 impacted our balance sheet by the recognition of the operating lease right-of-use assets and the liability for operating leases. The accounting for finance leases (capital leases) was substantially unchanged. Accordingly, upon adoption, leases that were classified as operating leases under the previous guidance were classified as operating leases under Topic 842. The lease liability is based on the present value of the remaining lease payments, discounted using a market based incremental borrowing rate as the effective date of January 1, 2019 using current estimates as to lease term including estimated renewals for each operating lease. As of January 1, 2019, the Company recorded an adjustment of approximately $514,000 to operating lease right-of-use assets ("ROU") and the related lease liability. See Note 12 for further information with respect to leases. See the subsequent Notes 7, 10, 11 and 12 to Notes to Condensed Consolidated Financial Statements for Additional Information. | Leases All leases are classified at the inception as direct finance leases or operating leases based on whether the lease transfers substantially all the risks and rewards of ownership. Leases that transfer to the leasee substantially all of the risks and rewards incidental to ownership of the asset are classified as direct finance leases. |
Revenue Recognition | Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("Topic 606"). Topic 606 supersedes the revenue recognition requirements in ASU Topic 605, Revenue Recognition ("Topic 605"), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which discusses the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. Collectively, we refer to Topic 606 and Subtopic 340-40 as the "new standard." The new standard was adopted by the Company in the year beginning January 1, 2018. The two permitted transition methods under the new standard are the full retrospective method, in which the new standard would be applied to each prior reporting period presented and the cumulative effect of applying the new standard would be recognized at the earliest period shown, or the modified retrospective method, in which the cumulative effect of applying the new standard would be recognized at the date of initial application. Based on our assessment, the impact of the new standard on our operations in prior periods was not significant. Below is the Company's revenue recognition policy determined by revenue stream for its significant revenue generating activities through March 31, 2019. Cards Plus Payment Processing Identity Solutions In 2018, the Company introduced a pay for performance plan for internal and external sales force, which is based on a percentage of revenues received by the Company. In the three months ended March 31, 2019 and March 31, 2019, no commissions were earned. We will defer and amortize any direct and incremental commission as well as costs to obtain a contract over the term of the related contracts. As of March 31, 2019 and December 31, 2018, there were no deferred commission. We will review each new contract for the related performance obligations and related revenue and expense recognition implications. We expect that the revenues derived from the new identity services could include multiple performance obligations. A performance obligation under the new revenue standard is defined as a promise to provide a "distinct" good or service to a customer. The Company has determined that one possible treatment under the new standard is that these services will represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Further, the Company has determined that the performance obligation to provide account access and facilitate transactions may meet the criteria for the "as invoiced" practical expedient, in that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company's performance completed to date. As a result, the Company anticipates it may recognize revenue in the amount to which the Company has a right to invoice, based on completed performance at the relevant date. Additionally, the contracts could include implementation services, or support on an "as needed" basis and we will review each contract and determine whether such performance obligations are separate and distinct and apply the new standard accordingly to the revenue and expense derived from or related to each such service. A more complete analysis of the impact of the standard on these contracts will be performed at the period of time when services are expected to commence and the conclusions reached by management may be different from those described above. For the quarter ended March 31, 2019, no revenues were recognized or required to be recognized under this practical expedient. Additionally, the Company will capitalize the incremental costs of acquiring and fulfilling a contract with a customer if the Company expects to recover those costs. The incremental costs of acquiring and fulfilling a contract are those that the Company incurs to acquire and fulfill a contract with a customer that it would not have incurred if the contract had not been acquired (for example, a sales commission or specific incremental costs associated with the contract). The Company capitalizes the costs incurred to acquire and fulfill a contract only if those costs meet all the following criteria: a. The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. b. The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. c. The costs are expected to be recovered. The Company will capitalize contract acquisition and fulfillment costs related to signing or renewing contracts that meet the above criteria, which will be classified as contract cost assets in the Company's Consolidated Balance Sheets. Contract cost assets are amortized using the straight-line method over the expected period of benefit beginning at the time revenue begins to be realized. The amortization of contract fulfillment cost assets associated with facilitating transactions are recorded as cost of services in the Company's Consolidated Statements of Operations. The amortization of contract acquisition cost assets associated with sales commissions that qualify for capitalization are recorded as selling, general and administrative expense in the Company's Consolidated Statements of Operations. As of March 31, 2019, and December 31, 2018, the Company had deferred contract costs, represented by contract cost assets of approximately $5,000 and $11,000, respectively which are included in other currents assets for certain costs incurred for the future delivery of election support services. The performance obligation will be met over the next two years and the costs will be expensed as the associated revenue is recognized as the Company performances its obligations. As of March 31, 2019, and December 31, 2018, the Company had approximately $15,000 of accounts payable and accrued expenses related to the delivery of biometric identity system and services. The $15,000 will be paid in accordance with the terms of the service provider agreements. | Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("Topic 606"). Topic 606 supersedes the revenue recognition requirements in ASU Topic 605, Revenue Recognition ("Topic 605"), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which discusses the deferral of incremental costs of obtaining a contract with a customer, including the period of amortization of such costs. Collectively, we refer to Topic 606 and Subtopic 340-40 as the "new standard." The new standard was adopted by the Company on January 1, 2018. The two permitted transition methods under the new standard are the full retrospective method, in which the new standard would be applied to each prior reporting period presented and the cumulative effect of applying the new standard would be recognized at the earliest period shown, or the modified retrospective method, in which the cumulative effect of applying the new standard would be recognized at the date of initial application. Based on our assessment, the impact of the new standard on our operations in prior periods is not significant. The following is the Company's revenue recognition policy determined by revenue stream for its significant revenue generating activities through December 31, 2018. Cards Plus - The Company recognizes revenue for the design and production of cards when products are shipped or services have been performed due to the short term nature of the contracts. Payment Processing – The Company recognizes revenue for variable fees generated for payment processing solutions that are earned on a usage fee over time based on monthly transaction volumes or on a monthly flat fee rate. Additionally, the Company also sells certain equipment from time to time for which revenue is recognized upon delivery to the customer. Identity Solutions Software – The Company recognizes revenue based on the identified performance obligations over the performance period for fixed consideration and for variable fees generated that are earned on a usage fee based over time based on monthly transaction volumes or on a monthly flat fee rate. The Company had a deferred revenue contract liability of approximately $236,000 and $123,000 as of December 31, 2018 and 2017 for certain revenue that will be earned in future periods. The $123,000 of deferred revenue contract liability as of December 31, 2017 was earned in the year ended December 31, 2018. The deferred revenue relates to the service period of support services for two customers. As of December 31, 2018 majority of the deferred revenue contract liability will be recognized over the next quarter. We have allocated the selling price in the contract to one customer which has multiple performance obligations based on the contract selling price that we believe represents a fair market price for the service rendered. During the year ended December 31, 2018, the Company had revenues from operations in North American, South America and Africa of $1.9 million, $0.5 million and $1.4 million respectively compared to $0.5 million, $0.4 million, $1.4 million respectively in the year ended December 31, 2017. In 2018, the Company introduced its new identity transaction platform and products as well as its pay for performance plan for both internal and external salesforce, that is based on a percentage of the benefit derived by the Company. For the year ended December 31, 2018, the Company recorded revenues of approximately $5,000 from the new platform. The requirements under the new standard may impact future revenue and expenses recognition. One impact could be the accounting related to the capitalization and deferral of incremental commission and other costs of obtaining new contracts. We will defer direct and incremental commission as well as costs to obtain a contract and amortize those costs over the term of the related contract. As of December 31, 2018, there was a deferred commission of approximately $5,000 related to future delivery of an identity solutions system and services. We will review each new contract for the related performance obligations and related revenue and expense recognition implications. We expect that the revenues derived from the new product offerings could include multiple performance obligations. A performance obligation under the new revenue standard is defined as a promise to provide a "distinct" good or service to a customer. The Company has determined that one possible treatment under the new standard is that these services will represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Further, the Company has determined that the performance obligation to provide account access and facilitate transactions may meet the criteria for the "as invoiced" practical expedient, in that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company's performance completed to date. As a result, the Company anticipates it may recognize revenue in the amount to which the Company has a right to invoice, based on completed performance at the relevant date. Additionally, the contracts could include implementation services, or support on an "as needed" basis and we will review each contract and determine whether such performance obligations are separate and distinct and apply the new standard accordingly to the revenue and expense derived from or related to each such service. Additionally, the Company will capitalize the incremental costs of acquiring and fulfilling a contract with a customer if the Company expects to recover those costs. The incremental costs of acquiring and fulfilling a contract are those that the Company incurs to acquire and fulfill a contract with a customer that it would not have incurred if the contract had not been acquired (for example, a sales commission or specific incremental costs associated with the contract). The Company capitalizes the costs incurred to acquire and fulfill a contract only if those costs meet all the following criteria: a. The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. b. The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. c. The costs are expected to be recovered. The Company will capitalize contract acquisition and fulfillment costs related to signing or renewing contracts that meet the above criteria, which will be classified as contract cost assets in the Company's Consolidated Balance Sheets. Contract cost assets will be amortized using the straight-line method over the expected period of benefit beginning at the time revenue begins to be realized. The amortization of contract fulfillment cost assets associated with facilitating transactions will be recorded as cost of services in the Company's Consolidated Statements of Operations. The amortization of contract acquisition cost assets associated with sales commissions that qualify for capitalization will be recorded as selling, general and administrative expense in the Company's Consolidated Statements of Operations. As of December 31, 2018, the Company had approximately $15,000 of accounts payable and accrued expenses related to the delivery of biometric identity system and services. The $15,000 will be paid in accordance with the terms of the service provider agreements. Revenue related to direct financing leases is outside the scope of Topic 606 and is recognized over the term of the lease using the effective interest method. |
Share Based Payments | Share Based Payments On June 20, 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Previously, share-based payment arrangements to nonemployees were accounted for under ASC 718, while nonemployee share-based payments issued for goods and services were accounted for under ASC 505-50. Before the amendment, the major difference for the Company (but not limited to) was the determination of measurement date which generally is the date on which the measurement of equity classified share-based payments becomes fixed. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified nonemployee share-based payment awards are no longer measured at the earlier of the date which a commitment for performance by the counterparty is reached or the date at which the counterparty's performance is complete. They are now measured at the grant date of the award which is the same as share-based payments for employees. The Company adopted the requirements of the new rule as of January 1, 2019, the effective date of the new guidance. The Company has determined on the date of adoption that the impact of the new standard is not significant. Beginning in 2019, the Company in accordance with the requirements of the new standard will expense the fair value of the existing non-employee share-based payments over their vesting period using the fair value determined on the date of adoption. See note 9 of the notes to condensed consolidated financial statements as employee and non-employee share-based payments are presented. | |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of Ipsidy Inc. and its wholly-owned subsidiaries Innovation in Motion Inc. MultiPay S.A.S., ID Global LATAM, IDGS S.A.S., ID Solutions, Inc., FIN Holdings, Inc., Cards Plus Pty Ltd. and Ipsidy Enterprises Limited (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“US GAAP”) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. | |
Use of Estimates | Use of Estimates In preparing these consolidated financial statements in conformity with US GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the realizability of accounts receivable and inventory, valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to derivative liabilities, equity instruments and share based payments. | |
Accounts Receivable | Accounts Receivable All customers are granted credit on a short-term basis and related credit risks are considered minimal. The Company routinely reviews its trade receivables and makes provisions for probable doubtful accounts; however, those provisions are estimates and actual results could differ from those estimates and those differences may be material. Trade receivables are deemed uncollectible and removed from accounts receivable and the allowance for doubtful accounts when collection efforts have been exhausted. At December 31, 2018 and 2017, management determined no allowance for doubtful accounts was required. | |
Concentration of Credit Risk | Concentration of Credit Risk The Company’s financial instruments that potentially expose the Company to a concentration of credit risk consist of cash and accounts receivable. Cash: 2018 Revenues and accounts receivable: 2017 Revenues and accounts receivable: | |
Income Taxes | Income Taxes The Company accounts for income taxes under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 “Income Taxes.” Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. | |
Property and Equipment, net | Property and Equipment, net Property and equipment consist of furniture and fixtures and computer equipment, and are stated at cost. Property and equipment are depreciated using the straight-line method over the estimated useful service lives of three to five years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal. | |
Other Assets - Software Development Costs | Other Assets - Software Development Costs Other assets consist primarily of costs associated with software development of new product offerings and enhancements to existing and new applications. Development costs of computer software to be sold, leased or otherwise marketed are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. As of December 31, 2018 and 2017, the balance sheet assets have reached technological feasibility were under further development and have not been placed in service. Upon completion, the amounts will be recorded in the appropriate asset category and amortized over their estimated useful lives. | |
Intangible Assets | Intangible Assets Excluding goodwill, acquired intangible assets and internally developed software are amortized over their estimated useful lives. Acquired amortizing intangible assets are carried at cost, less accumulated amortization. Internally developed software costs are capitalized upon reaching technological feasibility. Amortization of acquired finite-lived intangible assets is computed over the estimated useful lives of the respective assets which is the shorter of the life of the asset or the period during which sales will be generated. | |
Goodwill | Goodwill Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of net identified tangible and intangible assets acquired. The Company performs an annual impairment test of goodwill and further periodic tests to the extent indicators of impairment develop between annual impairment tests. The Company’s impairment review process compares the fair value of the reporting unit to its carrying value, including the goodwill related to the reporting unit utilizing qualitative considerations. To determine the fair value of the reporting unit, the Company may use various approaches including an asset or cost approach, market approach or income approach or any combination thereof. These approaches may require the Company to make certain estimates and assumptions including future cash flows, revenue and expenses. These estimates and assumptions are reviewed each time the Company tests goodwill for impairment and are typically developed as part of the Company’s routine business planning and forecasting process. While the Company believes its estimates and assumptions are reasonable, variations from those estimates could produce materially different results. The Company did not recognize any goodwill impairments for the years ended December 31, 2018 and 2017. | |
Stock-based compensation | Stock-based compensation The Company has accounted for stock-based compensation under the provisions of FASB ASC 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). For employee awards, the fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. For non-employees, the fair value of each stock option award is estimated on the measurement date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. For non-employees, the Company utilizes the graded vesting attribution method under which the entity treats each separately vesting portion (tranche) as a separate award and recognizes compensation cost for each tranche over its separate vesting schedule. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. For employee awards, the expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its undiscounted estimated future cash flows, an impairment review is performed. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Generally, fair value is determined using valuation techniques such as expected discounted cash flows or appraisals, as appropriate. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated or amortized. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. During the years ended December 31, 2018 and 2017, the Company wrote-off net assets of approximately $149,000 and $216,000 as the assets were no longer being utilized or developed for commercial purposes and we do not anticipate any future realizable value. | |
Research and Development Costs | Research and Development Costs Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to incurred to perform research projects and develop technology for the Company’s products. Research and development costs are expensed as incurred. | |
Derivative Instruments | Derivative Instruments The Company accounted for derivatives through the use of a fair value concept whereby all of the Company’s derivative positions are stated at fair value in the accompanying consolidated balance sheets. Due to the potential adjustment in the conversion price associated with certain of the convertible debentures and the potential adjustment in the exercise price of certain of the warrants, the Company determined that certain of the conversion features and warrants are considered derivative liabilities required to be presented at fair value on the accompanying consolidated balance sheet in prior periods with changes in fair value reported in the consolidated statements of operations. As of December 31, 2018 and 2017, the Company does not have any instruments that are considered derivative instruments. See Note 7. | |
Common Stock Purchase Warrants | Common Stock Purchase Warrants The Company accounts for common stock purchase warrants in accordance with ASC Topic 815- 40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASC 815-40”). Based on the provisions of ASC 815- 40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). On January 31, 2017, the Company entered into agreements with the holders of warrants containing down-round features, resulting in the removal of down-round provisions contained in the warrants. Accordingly, as of December 31, 2018 and 2017, the Company had no common stock warrants requiring liability presentation. See Note 7. | |
Foreign Currency Translation | Foreign Currency Translation The assets, liabilities and results of operations of certain of Ipsidy’s subsidiaries are measured using their functional currency which is the currency of the primary foreign economic environment in which they operate. Upon consolidating these subsidiaries with Ipsidy, the applicable assets and liabilities are translated to US dollars at currency exchange rates as of the applicable dates and their revenues and expenses are translated at the weighted average currency exchange rates during the applicable reporting periods. Translation adjustments resulting from the process of translating these subsidiaries’ financial statements are reported in other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income (loss). | |
Fair Value Measurements | Fair Value Measurements ASC 820, “Fair Value Measurements”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company is required to disclose fair value information about financial instruments when it is practicable to estimate that value. The carrying amounts of the Company’s cash, accounts receivable, other receivables, accounts payable, accrued expenses, and other current liabilities approximate their estimated fair value due to the short-term maturities of these financial instruments and because related interest rates offered to the Company approximate current rates. The fair value of the Company’s notes payable is $2,000,000, which differs from the carrying value or reported amounts of $1,853,648 at December 31, 2018 because of the debt discounts as discussed in Note 6. | |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02 (Topic 842). Topic 842 amends a number of aspects of lease accounting, including requiring lessees to recognize leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. In July 2018, the FASB issued supplemental adoption guidance and clarification to Topic 842 within ASU 2018-10 “Codification Improvements to Topic 842, Leases” and ASU 2018-11 “Leases (Topic 842): Targeted Improvements.” The new guidance aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. A modified retrospective application is required with an option to not restate comparative periods in the period of adoption. This guidance is effective for the Company on January 1, 2019 with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements, which will consist primarily of a balance sheet gross up of its operating leases to show equal and offsetting right-of-use assets and lease liabilities. The Company anticipates using the practical expedients that are included in the guidance for existing operating leases which allows a waiver of lease assessment of their respective classification under the new standard. The Company will adopt the requirements of the new standard as new arrangements are executed. On June 20, 2018, the FASB issued ASU 2018-07,1 which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Currently, share-based payment arrangements to nonemployees are accounted for under ASC 718,3 while nonemployee share-based payments issued for goods and services are accounted for under ASC 505-50. ASC 505-50. Before the amendment, the major difference for the Company (but not limited to) was the determination of measurement date which generally is the date on which the measurement of equity classified share-based payments becomes fixed. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified nonemployee share-based payment awards are no longer measured at the earlier of the date which a commitment for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. They are now measured at the grant date of the award which is the same as share-based payments for employees. The Company will adopt the requirements of the new rule in the first quarter of 2019 and the Company estimates the impact will be immaterial. In January 2017, the FASB issued Accounting Standards Update 2017-04, “Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment” (ASU 2017-04). The standard simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments of ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss cannot exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for the calendar year ending December 31, 2020. The amendments require a prospective approach to adoption and early adoption is permitted for interim or annual goodwill impairment tests. The Company is currently evaluating the impact of this standard. In June 2016, the FASB issued ASU 2017-13, Financial Instruments-Credit Losses. The standard requires a financial asset (including trade receivables) measured at amortized cost basis to be presented at the net amount expected to be collected. Thus, the income statement will reflect the measurement of credit losses for newly-recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. This standard will be effective for the calendar year ending December 31, 2020. The Company is currently in the process of evaluating the impact of adoption of this ASU on the financial statements. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Schedule of potentially dilutive securities | Security 2019 2018 Stock Options 106,253,339 107,958,331 Warrants 46,201,477 45,964,543 Total 152,454,816 153,922,874 | 2018 2017 Stock Options 106,253,339 103,208,331 Warrants 46,201,477 48,164,543 Total 152,454,816 151,372,874 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of property and equipment | 2019 2018 Computers and equipment $ 269,852 $ 238,442 Furniture and fixtures 156,867 156,867 426,719 $ 395,309 Less Accumulated depreciation 209,939 191,309 Property and equipment, net $ 216,780 $ 204,000 | 2018 2017 Property and equipment $ 238,442 $ 179,351 Equipment under capital lease (see Note 11) 156,867 156,867 395,309 336,218 Less Accumulated depreciation 191,309 126,499 Property and equipment, net $ 204,000 $ 209,719 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Other Assets [Abstract] | ||
Schedule of other assets | 2019 2018 Software and development $ 1,919,688 $ 1,566,177 Operating Lease ROU assets, net 208,311 — $ 2,127,999 $ 1,566,177 | 2018 2017 Software and development $ 1,566,177 $ 1,139,409 Other — 104,122 $ 1,566,177 $ 1.243,531 |
Intangible Assets, Net (Other_2
Intangible Assets, Net (Other Than Goodwill) (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of intangible assets | Acquired and Customer Developed Intellectual Patents Relationships Software Property Non-Compete Pending Total Useful Lives 10 Years 5 Years 10 Years 10 Years N/A Carrying Value at December 31, 2018 $ 1,128,734 $ 908,893 $ 1,191,942 $ 2,433 $ 78,182 $ 3,310,184 Additions 597 597 Amortization (39,679 ) (57,327 ) (43,432 ) (609 ) — (141,047 ) Carrying Value at March 31, 2019 $ 1,089,055 $ 851,566 $ 1,148,510 $ 1,824 $ 78,779 $ 3,169,734 Acquired and Customer Developed Intellectual Patents Relationships Software Property Non-Compete Pending Total Cost $ 1,587,159 $ 959,882 $ 1,759,809 $ 14,087 $ 78,779 $ 4,399,716 Accumulated amortization (498,104 ) (108,316 ) (611,299 ) (12,263 ) — (1,229,982 ) Carrying Value at March 31, 2019 $ 1,089,055 $ 851,566 $ 1,148,510 $ 1,824 $ 78,779 $ 3,169,734 | Customer Acquired and Intellectual Non-Compete Patents Total Useful Lives 10 Years 5 Years 10 Years 10 Years N/A Carrying Value at December 31, 2016 $ 1,446,166 $ — $ 2,000,858 $ 8,067 $ 19,200 $ 3,474,291 Additions — — — — 9,246 9,246 Write off of assets — — (212,862 ) — — (212,862 ) Amortization (158,716 ) — (231,062 ) (2,817 ) — (392,595 ) Carrying Value at December 31, 2017 1,287,450 — 1,556,934 5,250 28,446 2,878,080 Additions — 959,882 — — 49,736 1,009,618 Write off of assets — — (148,627 ) — — (148,627 ) Amortization (158,716 ) (50,989 ) (216,365 ) (2,817 ) — (428,887 ) Carrying Value at December 31, 2018 $ 1,128,734 $ 908,893 $ 1,191,942 $ 2,433 $ 78,182 $ 3,310,184 Customer Acquired and Intellectual Non-Compete Patents Total Cost $ 1,587,159 $ — $ 2,146,561 $ 14,087 $ 28,446 $ 3,776,253 Accumulated amortization (299,709 ) — (589,627 ) (8,837 ) — (898,173 ) Carrying Value at December 31, 2017 $ 1,287,450 $ — $ 1,556,934 $ 5,250 $ 28,446 $ 2,878,080 Customer Acquired and Intellectual Non-Compete Patents Total Cost $ 1,587,159 $ 959,882 $ 1,759,809 $ 14,087 $ 78,182 $ 4,399,119 Accumulated amortization (458,425 ) (50,989 ) (567,867 ) (11,654 ) — (1,088,935 ) Carrying Value at December 31, 2018 $ 1,128,734 $ 908,893 $ 1,191,942 $ 2,433 $ 78,182 $ 3,310,184 |
Schedule of future amortization expense of intangible assets | Fiscal Year Ending December 31, Remainder of 2019 $ 423,939 2020 562,554 2021 562,554 2022 469,220 2023 418,232 Thereafter 733,235 $ 3,169,734 | 2019 $ 564,987 2020 562,554 2021 562,554 2022 469,220 2023 418,232 Thereafter 732,637 $ 3,310,184 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Payables and Accruals [Abstract] | ||
Schedule of accounts payable and accrued expenses | 2019 2018 Trade payables $ 330,963 $ 401,272 Accrued interest 460,334 401,667 Accrued payroll and related obligations 236,688 260,153 Operating lease liabilities 267,960 — Other accrued expenses 266,983 239,134 $ 1,562,928 $ 1,302,226 | 2018 2017 Trade payables $ 401,272 $ 232,842 Accrued interest 401,667 275,000 Accrued payroll and related 260,153 468,012 Other 284,134 471,331 Total $ 1,347,226 $ 1,447,185 |
Notes Payable, Net (Tables)
Notes Payable, Net (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Schedule of notes payable | March 31, December 31, In January 2017, the Company issued a Senior Unsecured Note ("Note") a face value of $3,000,000, payable two years from issuance, along with an aggregate of 4,500,000 shares of Common Stock, with a fair value of $1,147,500. The Company allocated the proceeds to the common stock based on their relative fair value and recorded a discount of $830,018 to be amortized into interest expense over the two-year term of the note. The Company also paid debt issuance costs consisting of a cash fee of $120,000 and 1,020,000 shares of common stock of the Company with a fair value of $306,000. On April 30, 2018, the Company and the Noteholder agreed to extend the due date of the note until April 30, 2020 for an extension fee of 1,500,000 shares of the Common Stock issued to the Noteholder. The April 2018 change in terms of the Note payable has been determined to be a debt extinguishment in accordance with ASC 470. The reported amounts under the debt extinguishment are not significantly different than that of the Company's reported amounts. See below $ 2,000,000 $ 2,000,000 Installment loan payable related to a vehicle acquisition payable in monthly payments of $539 per month at an interest rate of 10.8% per annum payable for 36 months 16,510 — Total Principal Outstanding $ 2,016,510 $ 2,000,000 Unamortized Deferred Debt (86,845 ) (106,886 ) Unamortized Deferred Debt Issuance Costs (32,066 ) (39,466 ) Notes Payable, Net $ 1,897,599 $ 1,853,648 Notes Payable, current portion $ 4,926 $ — Notes Payable, Net of discounts and current portion 1,892,673 1,853,648 $ 1,897,599 $ 1,853,648 | 2018 2017 In January 2017, the Company issued a Senior Unsecured Note (“Note”) a face value of $3,000,000, payable two years from issuance, along with an aggregate of 4,500,000 shares of Common Stock, with a fair value of $1,147,500. The Company allocated the proceeds to the common stock based on their relative fair value and recorded a discount of $830,018 to be amortized into interest expense over the two-year term of the note. The Company also paid debt issuance costs consisting of a cash fee of $120,000 and 1,020,000 shares of common stock of the Company with a fair value of $306,000. On April 30, 2018, the Company and the Noteholder agreed to extend the due date of the note until April 30, 2020 for 1,500,000 shares of the Common Stock issued to the Noteholder. The April 2018 change in the terms of this note payable has been determined to be a debt extinguishment in accordance with ASC 470. The reported amounts under the debt extinguishment are not significantly different than that of the Company’s reported amounts. $ 2,000,000 $ 3,000,000 Total Principal Outstanding 2,000,000 3,000,000 Unamortized Deferred Discounts (106,886 ) (455,935 ) Unamortized Debt Issuance Costs (39,466 ) (168,345 ) Notes Payable, net of current maturities $ 1,853,648 $ 2,375,720 |
Schedule of notes payable and related discounts | Principal Debt Debt Total: Balance at December 31, 2018 $ 2,000,000 $ (39,466 ) $ (106,886 ) $ 1,853,648 Additions 16,510 — — 16,510 Amortization — 7,400 20,041 27,441 Balance at March 31, 2019 $ 2,016,510 $ (32,066 ) $ (86,845 ) $ 1,897,599 | Principal Debt Issuance Debt Balance Costs Discounts Total Balance at December 31, 2016 $ 6,065,914 $ (243,055 ) $ (165,841 ) $ 5,657,018 New issuances 3,000,000 (310,790 ) (841,727 ) 1,847,483 Payments/conversions (6,065,914 ) — — (6,065,914 ) Amortization — 385,500 551,633 937,133 Balance at December 31, 2017 3,000,000 (168,345 ) (455,935 ) 2,375,720 New issuances — — — — Payments/Conversions (1,000,000 ) — — (1,000,000 ) Amortization — 128,879 349,049 477,928 Balance at December 31, 2018 $ 2,000,000 $ (39,466 ) $ (106,886 ) $ 1,853,648 |
Schedule of future maturities of notes payable | April 1, 2019 – March 31, 2020 $ 4,926 April 1, 2020 – March 31, 2021 2,005,485 April 1, 2021 – March 31, 2022 6,099 $ 2,016,510 | 2019 $ — 2020 2,000,000 $ 2,000,000 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other liabilities | 2019 2018 Operating lease liabilities $ 209,998 $ — Other 45,000 45,000 $ 254,998 $ 45,000 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative activity | Balance at January 1, 2017 $ 18,056,631 Modification of derivatives 319,770 Cancellation of warrants previously accounted for as derivative liabilities and elimination of derivative conversion features resulting from conversion of related party debt to equity (11,213,573 ) Change in fair value 452,146 Reclassification of derivatives to equity upon removal of price protection in warrants (7,614,974 ) Balance at December 31, 2017 $ — |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Schedule of warrant activity | The was no warrant activity for the three months ended March 31, 2019: Number of Weighted Weighted Outstanding at December 31, 2018 46,201,477 $ 0.08 1.9 Years Outstanding at March 31, 2019 46,201,477 $ 0.08 1.6 Years | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life Outstanding at January 1, 2017 51,138,697 $ 0.11 2.8 Years Granted 1,153,846 $ 0.14 5.0 Years Exercised/Cancelled (4,128,000 ) $ 0.08 Outstanding at December 31, 2017 48,164,543 $ 0.11 2.9 Years Granted 2,470,267 $ 0.14 5.0 Years Exercised/Cancelled (4,333,333 ) $ 0.05 — Outstanding at December 31, 2018 46,201,477 $ 0.08 1.9 Years |
Schedule of black - scholes option-pricing model valuation assumption | The Company did not grant any stock options in the first three months of 2019. During the year ended December 31, 2018, the Company determined the grant date fair value of the options granted using the Black Scholes Method. The following assumptions were used in the year ended December 31, 2018: Expected Volatility – 79-93% Expected Term – 2.5 – 5.9 Years Risk Free Rate – 2.4 – 3.0% Dividend Rate – 0.00% | 2018 2017 Expected Volatility 79.0% to 93.0% 79.0% to 93.0% Expected Term 2.5 – 5.9 Years 2.5 – 5.9 Years Risk Free Rate 2.42% – 3.00% 1.16% to 1.49% Dividend Rate 0.00% 0.00% |
Schedule of outstanding stock options | Activity related to stock options for the three months ended March 31, 2019 is summarized as follows: Weighted Weighted Number of Exercise Contractual Aggregate Shares Price Term (Yrs.) Intrinsic Value Outstanding as of December 31, 2018 106,253,339 $ 0.20 7.4 $ 1,989,163 Granted — — Forfeitures — — Outstanding as of March 31, 2019 106,253,339 0.20 7.1 $ 1,989,163 Exercisable as of March 31, 2019 97,165,278 $ 0.20 7.1 $ 1,886,038 | Number of Shares Weighted Average Exercise Price Weighted Average Contractual Term (Yrs.) Aggregate Intrinsic Value Outstanding as of January 1, 2017 86,925,000 $ 0.21 8.7 $ 7,698,650 Granted 21,250,000 $ 0.11 10.0 $ 7,475,000 Forfeited (4,966,669 ) $ 0.08 — $ — Outstanding as of December 31, 2017 103,208,331 $ 0.19 9.5 $ 10,023,400 Granted 6,220,000 $ 0.22 10.0 $ 2,868,750 Exercised (3,174,992 ) $ 0.13 — $ — Outstanding as of December 31, 2018 106,253,339 $ 0.20 8.3 $ 11,457,291 Exercisable as of December 31, 2018 92,925,694 $ 0.20 7.4 $ 3,316,208 |
Schedule of stock option | The following table summarizes stock option information as of March 31, 2019: Weighted Average Contractual Exercise Price Outstanding Life (Yrs.) Exercisable $ 0.00001 3,500,000 6.5 3,500,000 0.05 32,783,339 7.3 30,720,833 0.10 27,200,000 7.5 25,811,111 0.12 970,000 9.5 — 0.13 250,000 8.6 83,333 0.15 2,800,000 6.6 2,800,000 0.22 2,750,000 8.8 750,000 0.25 2,500,000 8.6 1,166,667 0.26 500,000 9.1 — 0.29 1,000,000 8.0 333,334 0.40 1,000,000 6.9 1,000,000 0.45 31,000,000 6.6 31,000,000 106,253,339 7.1 97,165,278 | Exercise Price Outstanding Weighted Average Exercisable $ 0.0001 3,500,000 6.8 3,500,000 $ 0.05 32,783,339 7.6 28,314,583 $ 0.1 27,200,000 7.8 24,977,778 $ 0.12 970,000 9.8 — $ 0.13 250,000 8.8 83,333 $ 0.15 2,800,000 6.9 2,800,000 $ 0.22 2,750,000 9.0 750,000 $ 0.25 2,500,000 8.9 500,000 $ 0.26 500,000 9.3 — $ 0.29 1,000,000 8.3 — $ 0.4 1,000,000 7.2 1,000,000 $ 0.45 31,000,000 6.9 31,000,000 7.4 106,253,339 92,925,694 |
Direct Financing Lease (Tables)
Direct Financing Lease (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Schedule of future minimum lease payments to be received | Remainder 2019 $ 91,611 2020 122,148 2021 122,148 2022 122,148 2023 122,148 Thereafter 285,012 Sub-total 865,215 Less deferred revenue (260,552 ) Net investment in lease $ 604,663 | Year Ending December 31, 2019 $ 122,148 2020 122,148 2021 122,148 2022 122,148 2023 122,148 Thereafter 285,012 895,752 Less deferred revenue (276,989 ) Net investment in lease $ 618,763 |
Lease Obligation Payable (Table
Lease Obligation Payable (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Schedule of lease obligation payable | Year Ending Remainder of 2019 $ 32,322 2020 43,096 2021 43,096 2022 10,774 Total minimum lease payments 129,288 Less: Amount representing interest (21,162 ) Present value of minimum lease payments $ 108,126 | 2019 $ 43,096 2020 43,096 2021 43,096 2022 10,774 Total minimum lease payments 140,062 Less: Amount representing interest (24,554 ) Present value of minimum lease payments $ 115,508 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes | 2018 2017 United States $ (8,775,452 ) $ (15,488,668 ) Outside United States (1,221,919 ) (1,964,180 ) Loss before income taxes $ (9,997,371 ) $ (17,452,848 ) |
Schedule of reconciliation from the U.S. Federal statutory income rate | 2018 2017 US Federal Statutory Tax Rate 21.00 % 34.00 % State taxes 4.35 % 3.63 % Permanent items — (5.94 %) Amortization of Discount - APIC — 2.04 % NOL True-Ups (2.48 %) (2.78 %) Change in tax rates — (23.88 %) Change in valuation allowance (27.82 %) (7.07 %) 0.00 % 0.00 % |
Schedule of components of deferred tax assets and liabilities | 2018 2017 Deferred Tax Assets Net Operating Loss $ 5,981,004 $ 4,305,729 Stock Options 5,890,565 5,276,885 Charitable Contributions 1,267 1,267 Basis Difference in Intangible Assets 99,296 39,125 Basis Difference Fixed Assets 5,096 — Accrued Payroll 42,939 97,127 Valuation Allowance (11,983,078 ) (9,559,975 ) Total Deferred Tax Asset 37,089 160,158 Debt Discounts (27,086 ) (115,553 ) Debt Issuance Costs (10,003 ) (42,667 ) Basis Difference Fixed Assets — (1,938 ) Total Deferred Tax Liability (37,089 ) (160,158 ) Net Deferred Tax Asset $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Schedule of future minimum lease payments required under non convertible operating leases | Remainder of 2019 $ 235,467 2020 183,519 2021 92,391 2022 46,196 Total operating lease payments 557,573 Less: Imputed interest (79,615 ) Total operating lease liabilities $ 477,958 | 2019 $ 289,000 2020 183,500 2021 92,400 2022 46,200 Total $ 611,100 |
Schedule of related lease balance | Assets: Current portion of operating lease ROU assets - included in other current assets $ 266,225 Operating lease ROU assets – included in Other Assets $ 208,311 Liabilities: Current portion of ROU liabilities – included in Accounts payable and accrued expenses $ 267,960 Long-term portion of ROU liabilities – included in Other liabilities 209,998 Total operating lease liabilities $ 477,958 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting [Abstract] | ||
Schedule of geographic region | Three Months Ended March 31, March 31, Net Revenues: North America $ 227,041 $ 117,308 South America 125,328 79,088 Africa 388,009 329,393 740,378 525,789 Identity Management 615,050 446,701 Payment Processing 125,328 79,088 740,378 525,789 Loss From Operations North America (737,962 ) (1,047,886 ) South America (1,256,952 ) (1,329,590 ) Africa (173,460 ) (131,719 ) (2,168,374 ) (2,509,195 ) Identity Management (911,422 ) (1,179,605 ) Payment Processing (1,256,952 ) (1,329,590 ) (2,168,374 ) (2,509,195 ) Interest Expense (86,890 ) (239,169 ) Other income/(expense) 6,226 — Loss before income taxes (2,249,038 ) (2,748,364 ) Income tax expense (13,701 ) (4,561 ) Net loss $ (2,262,739 ) $ (2,752,925 ) | Year Ended December 31, 2018 2017 Net Revenues: North America $ 1,941,866 $ 518,023 South America 476,234 394,320 Africa 1,410,893 1,391,263 3,828,993 2,303,606 Identity Management 3,352,759 1,909,286 Payment Processing 476,234 394,320 3,828,993 2,303,606 Loss From Operations North America (1,959,125 ) (2,672,161 ) South America (6,540,029 ) (8,300,967 ) Africa (824,065 ) (1,035,987 ) (9,323,219 ) (12,009,115 ) Identity Management (2,783,190 ) (3,708,148 ) Payment Processing (6,540,029 ) (8,300,967 ) (9,323,219 ) (12,009,115 ) Gain (loss) on derivative liability — (4,106,652 ) Interest Expense (757,801 ) (1,337,081 ) Other income/(expense) 83,649 0 Loss before income taxes (9,997,371 ) (17,452,848 ) Income tax expense (30,242 ) (28,781 ) Net loss $ (10,027,613 ) $ (17,481,629 ) |
Basis of Presentation (Details)
Basis of Presentation (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of shares | 152,454,816 | 153,922,874 | 152,454,816 | 151,372,874 |
Stock Options [Member] | ||||
Number of shares | 106,253,339 | 107,958,331 | 106,253,339 | 103,208,331 |
Warrants [Member] | ||||
Number of shares | 46,201,477 | 45,964,543 | 46,201,477 | 48,164,543 |
Basis of Presentation (Details
Basis of Presentation (Details Textual) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)Kiosks | Dec. 31, 2017USD ($)Kiosks | Dec. 31, 2019USD ($) | Jan. 02, 2019USD ($) | |
Cash, FDIC insured amount | $ 250,000 | |||||
Cash, FDIC uninsured amount | 4,200,000 | |||||
Fair value of notes payable | 2,000,000 | |||||
Carrying value | 1,853,648 | |||||
Revenue | $ 723,941 | $ 507,927 | 3,759,635 | $ 2,228,910 | ||
Accumulated deficit | (78,697,974) | (76,435,235) | (66,407,622) | |||
Loss from operations | (2,168,374) | (2,509,195) | (9,323,219) | (12,009,115) | ||
Wrote-off net assets | 149,000 | 216,000 | ||||
Inventory valuation allowance | 589,000 | 707,000 | 353,000 | |||
Deferred revenue contract liability | 531,000 | 236,000 | 123,000 | |||
Revenue from new platform | 5,000 | |||||
Deferred commission | 5,000 | |||||
Deferred contract costs | 5,000 | 11,000 | ||||
Revenue remaining performance obligation, Amount | 15,000 | |||||
Operating lease right-of-use assets | 208,311 | $ 104,122 | $ 514,000 | |||
Accounts payable and accrued expenses | 15,000 | $ 15,000 | ||||
Payment for service provider agreements | 15,000 | |||||
Subsequent Event [Member] | ||||||
Deferred revenue contract liability | $ 400,000 | |||||
Direct Financing Lease Arrangements [Member] | ||||||
Number of kiosks | Kiosks | 78 | 78 | ||||
Direct financing lease, imputed interest rate | 10.70% | 10.70% | ||||
Maximum [Member] | ||||||
Property and equipment, estimated useful life | 5 years | |||||
Minimum [Member] | ||||||
Property and equipment, estimated useful life | 3 years | |||||
Colombian [Member] | ||||||
Cash held | $ 264,000 | |||||
Colombian [Member] | Revenues [Member] | Customer [Member] | ||||||
Percentage of concentration risk | 12.00% | 17.00% | ||||
Colombian [Member] | Revenues [Member] | Four Customers [Member] | ||||||
Percentage of concentration risk | 89.00% | |||||
Colombian [Member] | Revenues [Member] | Three Customers [Member] | ||||||
Percentage of concentration risk | 97.00% | |||||
Colombian [Member] | Accounts Receivable [Member] | Customer [Member] | ||||||
Percentage of concentration risk | 51.00% | 16.00% | ||||
African [Member] | ||||||
Cash held | $ 235,000 | |||||
Revenue from operations | $ 1,400,000 | $ 1,400,000 | ||||
African [Member] | Revenues [Member] | Customer [Member] | ||||||
Percentage of concentration risk | 37.00% | 60.00% | ||||
African [Member] | Accounts Receivable [Member] | Customer [Member] | ||||||
Percentage of concentration risk | 46.00% | 84.00% | ||||
British Banks [Member] | ||||||
Cash held | $ 24,000 | |||||
Africa [Member] | ||||||
Loss from operations | (173,460) | (131,719) | (824,065) | $ (1,035,987) | ||
South America [Member] | ||||||
Loss from operations | (1,256,952) | (1,329,590) | (6,540,029) | (8,300,967) | ||
North America [Member] | ||||||
Loss from operations | $ (737,962) | $ (1,047,886) | $ (1,959,125) | $ (2,672,161) | ||
United States [Member] | Revenues [Member] | Customer [Member] | ||||||
Percentage of concentration risk | 14.00% | 22.00% | ||||
United States [Member] | Accounts Receivable [Member] | Customer [Member] | ||||||
Percentage of concentration risk | 3.00% | |||||
ZIMBABWE [Member] | Revenues [Member] | Customer [Member] | ||||||
Percentage of concentration risk | 37.00% |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 426,719 | $ 395,309 | $ 336,218 |
Less Accumulated depreciation | 209,939 | 191,309 | 126,499 |
Property and equipment, net | 216,780 | 204,000 | 209,719 |
Computer Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 269,852 | 238,442 | 179,351 |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 156,867 | $ 156,867 | $ 156,867 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property and Equipment, Net (Textual) | ||||
Depreciation expense | $ 18,630 | $ 17,267 | $ 64,810 | $ 82,616 |
Other Assets (Details)
Other Assets (Details) - USD ($) | Mar. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Other Assets [Abstract] | ||||
Software and development | $ 1,919,688 | $ 1,566,177 | $ 1,139,409 | |
Operating Lease ROU assets, net | 208,311 | $ 514,000 | 104,122 | |
Other assets | $ 2,127,999 | $ 1,566,177 | $ 1,243,531 |
Intangible Assets, Net (Other_3
Intangible Assets, Net (Other Than Goodwill) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Carrying Value at beginning | $ 3,310,184 | $ 2,878,080 | $ 3,474,291 |
Additions | 597 | 1,009,618 | 9,246 |
Write off of assets | (148,627) | (212,862) | |
Amortization | (141,047) | (428,887) | (392,595) |
Carrying Value at end | $ 3,169,734 | $ 3,310,184 | 2,878,080 |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Lives | 10 years | 10 years | |
Carrying Value at beginning | $ 1,128,734 | $ 1,287,450 | 1,446,166 |
Additions | |||
Write off of assets | |||
Amortization | (39,679) | (158,716) | (158,716) |
Carrying Value at end | $ 1,089,055 | $ 1,128,734 | 1,287,450 |
Acquired and Developed Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Lives | 5 years | 5 years | |
Carrying Value at beginning | $ 908,893 | ||
Additions | 959,882 | ||
Write off of assets | |||
Amortization | (57,327) | (50,989) | |
Carrying Value at end | $ 851,566 | $ 908,893 | |
Intellectual Property [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Lives | 10 years | 10 years | |
Carrying Value at beginning | $ 1,191,942 | $ 1,556,934 | 2,000,858 |
Additions | |||
Write off of assets | (148,627) | (212,862) | |
Amortization | (43,432) | (216,365) | (231,062) |
Carrying Value at end | $ 1,148,510 | $ 1,191,942 | 1,556,934 |
Non-Compete [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Lives | 10 years | 10 years | |
Carrying Value at beginning | $ 2,433 | $ 5,250 | 8,067 |
Additions | |||
Write off of assets | |||
Amortization | (609) | (2,817) | (2,817) |
Carrying Value at end | $ 1,824 | 2,433 | 5,250 |
Patents Pending [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Lives | |||
Carrying Value at beginning | $ 78,182 | 28,446 | 19,200 |
Additions | 597 | 49,736 | 9,246 |
Write off of assets | |||
Amortization | |||
Carrying Value at end | $ 78,779 | $ 78,182 | $ 28,446 |
Intangible Assets, Net (Other_4
Intangible Assets, Net (Other Than Goodwill) (Details 1) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | $ 4,399,716 | $ 4,399,119 | $ 3,776,253 | |
Accumulated amortization | (1,229,982) | (1,088,935) | (898,173) | |
Carrying Value | 3,169,734 | 3,310,184 | 2,878,080 | $ 3,474,291 |
Customer Relationships [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 1,587,159 | 1,587,159 | 1,587,159 | |
Accumulated amortization | (498,104) | (458,425) | (299,709) | |
Carrying Value | 1,089,055 | 1,128,734 | 1,287,450 | 1,446,166 |
Acquired and Developed Software Member [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 959,882 | 959,882 | ||
Accumulated amortization | (108,316) | (50,989) | ||
Carrying Value | 851,566 | 908,893 | ||
Intellectual Property [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 1,759,809 | 1,759,809 | 2,146,561 | |
Accumulated amortization | (611,299) | (567,867) | (589,627) | |
Carrying Value | 1,148,510 | 1,191,942 | 1,556,934 | 2,000,858 |
Non-Compete [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 14,087 | 14,087 | 14,087 | |
Accumulated amortization | (12,263) | (11,654) | (8,837) | |
Carrying Value | 1,824 | 2,433 | 5,250 | 8,067 |
Patents Pending [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 78,779 | 78,182 | 28,446 | |
Accumulated amortization | ||||
Carrying Value | $ 78,779 | $ 78,182 | $ 28,446 | $ 19,200 |
Intangible Assets, Net (Other_5
Intangible Assets, Net (Other Than Goodwill) (Details 2) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Remainder of 2019 | $ 423,939 | $ 564,987 | ||
2020 | 562,554 | 562,554 | ||
2021 | 562,554 | 562,554 | ||
2022 | 469,220 | 469,220 | ||
2023 | 418,232 | 418,232 | ||
Thereafter | 733,235 | 732,637 | ||
Carrying Value | $ 3,169,734 | $ 3,310,184 | $ 2,878,080 | $ 3,474,291 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | |||
Trade payables | $ 330,963 | $ 401,272 | $ 232,842 |
Accrued interest | 460,334 | 401,667 | 275,000 |
Accrued payroll and related obligations | 236,688 | 260,153 | 468,012 |
Operating lease liabilities | 267,960 | ||
Other accrued expenses | 266,983 | 239,134 | |
Other | 284,134 | 471,331 | |
Total | $ 1,562,928 | $ 1,302,226 | $ 1,447,185 |
Notes Payable, Net (Details)
Notes Payable, Net (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2017 |
Short-term Debt [Line Items] | ||||
Total Principal Outstanding | $ 2,016,510 | $ 2,000,000 | $ 3,000,000 | |
Unamortized Deferred Debt | (106,886) | (455,935) | (165,841) | |
Unamortized Deferred Debt Issuance Costs | (39,466) | (168,345) | (243,055) | |
Notes Payable, Net | 1,897,599 | 1,853,648 | 2,375,720 | |
Notes Payable, current portion | 4,926 | |||
Notes Payable, Net of discounts and current portion | 1,892,673 | 1,853,648 | 2,375,720 | |
Total | 1,897,599 | 1,853,648 | 2,375,720 | |
Senior Unsecured Note [Member] | ||||
Short-term Debt [Line Items] | ||||
Total Principal Outstanding | 2,000,000 | $ 2,000,000 | $ 3,000,000 | |
Unamortized Deferred Debt | $ (830,018) | |||
Vehicle [Member] | ||||
Short-term Debt [Line Items] | ||||
Total Principal Outstanding | $ 16,510 |
Notes Payable, Net (Details 1)
Notes Payable, Net (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Principal Balance | |||
Balance at beginning | $ 2,000,000 | $ 3,000,000 | $ 6,065,914 |
Additions | 16,510 | ||
New issuances | 3,000,000 | ||
Payments/Conversions | (1,000,000) | (6,065,914) | |
Amortization | |||
Balance at end | 2,016,510 | 2,000,000 | 3,000,000 |
Debt Issuance Costs | |||
Balance at beginning | (39,466) | (168,345) | (243,055) |
Additions | |||
New issuances | (310,790) | ||
Payments/Conversions | |||
Amortization | 7,400 | 128,879 | 385,500 |
Balance at end | 39,466 | 168,345 | 243,055 |
Debt Discounts | |||
Balance at beginning | (455,935) | (165,841) | |
Additions | |||
New issuances | (841,727) | ||
Payments/Conversions | |||
Amortization | 20,041 | 349,049 | 551,633 |
Balance at end | (106,886) | (455,935) | (165,841) |
Total | |||
Balance at beginning | 1,853,648 | 2,375,720 | 5,657,018 |
Additions | 16,510 | ||
New issuances | 1,847,483 | ||
Payments/Conversions | (1,000,000) | (6,065,914) | |
Amortization | 27,441 | 477,928 | 937,133 |
Balance at end | $ 1,897,599 | $ 1,853,648 | $ 2,375,720 |
Notes Payable, Net (Details 2)
Notes Payable, Net (Details 2) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
April 1, 2019 - March 31, 2020 | $ 4,926 | |
April 1, 2020 - March 31, 2021 | 2,005,485 | 2,000,000 |
April 1, 2021 - March 31, 2022 | 6,099 | |
Total | $ 2,016,510 | $ 2,000,000 |
Notes Payable, Net (Details Tex
Notes Payable, Net (Details Textual) - USD ($) | Aug. 09, 2018 | Apr. 30, 2018 | Feb. 22, 2017 | Jan. 31, 2017 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Notes Payable, Net (Textual) | |||||||
Debt discount | $ (106,886) | $ (455,935) | $ (165,841) | ||||
Common stock issues value | 8,951,929 | 9,000,290 | |||||
Loss on modification of derivatives | (319,770) | ||||||
Loss on modification of warrant | (158,327) | ||||||
Loss on modification of debt | (5,978,643) | ||||||
Gain on extinguishment of notes payable | $ 2,802,234 | ||||||
Conversion Agreements [Member] | |||||||
Notes Payable, Net (Textual) | |||||||
Face amount | $ 300,000 | ||||||
Loss on modification of derivatives | 300,000 | ||||||
Loss on modification of warrant | 200,000 | ||||||
Loss on modification of debt | 6,000,000 | ||||||
Debt accrued interest | $ 31,000 | ||||||
Number of cancellation shares | 2,500,000 | ||||||
Gain on settlement of debt | $ 2,800,000 | ||||||
Conversion Agreements [Member] | Several Accredited Investors (the "Investors") [Member] | |||||||
Notes Payable, Net (Textual) | |||||||
Conversion price (in dollars per share) | $ 0.10 | ||||||
Exercise price (in dollars per share) | $ 0.10 | ||||||
Fair value of notes payable | $ 21,610,000 | ||||||
Value of shares issued on conversion | $ 6,331,000 | ||||||
Number of shares issued on conversion | 84,822,006 | ||||||
Conversion Agreements [Member] | Warrant [Member] | |||||||
Notes Payable, Net (Textual) | |||||||
Number of cancellation shares | 3,600,000 | ||||||
Senior Unsecured Note [Member] | |||||||
Notes Payable, Net (Textual) | |||||||
Face amount | $ 3,000,000 | $ 3,000,000 | |||||
Debt repayment | 1,000,000 | ||||||
Debt discount | (830,018) | ||||||
Debt issuance costs | 306,000 | ||||||
Debt issuance costs consisting shares value | $ 120,000 | ||||||
Debt issuance costs consisting shares | 1,020,000 | ||||||
Warrant term | 2 years | ||||||
Common stock issues value | $ 1,147,500 | $ 420,000 | |||||
Common stock issues shares | 4,500,000 | 1,500,000 | |||||
Common stock issued to the noteholder | $ 1,500,000 | ||||||
Interest Expenses | $ 158,000 | $ 275,000 | $ 59,000 | $ 284,000 | |||
Vehicle [Member] | |||||||
Notes Payable, Net (Textual) | |||||||
Debt term | 36 months | ||||||
Interest rate | 10.80% | ||||||
Monthly payments | $ 539 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Other Liabilities [Abstract] | ||
Operating lease liabilities | $ 209,998 | |
Other | 45,000 | $ 45,000 |
Total other liabilities | $ 254,998 | $ 45,000 |
Derivative Liability (Details)
Derivative Liability (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Balance at beginning | $ 18,056,631 |
Modification of derivatives | 319,770 |
Cancellation of warrants previously accounted for as derivative liabilities and elimination of derivative conversion features resulting from conversion of related party debt to equity | (11,213,573) |
Change in fair value | 452,146 |
Reclassification of derivatives to equity upon removal of price protection in warrants | (7,614,974) |
Balance at ending |
Derivative Liability (Details T
Derivative Liability (Details Textual) - Conversion Agreements [Member] - USD ($) | Feb. 22, 2017 | Jan. 31, 2017 |
Derivative Liability (Textual) | ||
Debt accrued interest | $ 31,000 | |
Number of cancellation shares | 2,500,000 | |
Number of cancellation shares, value | $ 300,000 | |
Face amount | $ 300,000 | |
Warrant [Member] | ||
Derivative Liability (Textual) | ||
Number of cancellation shares | 3,600,000 | |
Several Accredited Investors (the "Investors") [Member] | ||
Derivative Liability (Textual) | ||
Conversion price | $ 0.10 | |
Minimum [Member] | Several Accredited Investor [Member] | ||
Derivative Liability (Textual) | ||
Conversion price | $ 0.10 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) - USD ($) | Aug. 09, 2018 | Dec. 18, 2017 | Sep. 13, 2017 | Sep. 01, 2017 | Mar. 22, 2017 | Jan. 31, 2017 | Aug. 31, 2018 | Jan. 31, 2017 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Feb. 22, 2017 | Nov. 30, 2016 |
Related Party Transactions (Textual) | |||||||||||||||
Amount due to related parties | $ 22,275 | $ 22,275 | |||||||||||||
Common stock issues value | $ 8,951,929 | $ 9,000,290 | |||||||||||||
Employees and One Non Employee [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Vesting term | 3 years | ||||||||||||||
New Office Facilities [Member] | Long Beach, New York [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Additional monthly rental payments | $ 7,425 | $ 7,425 | |||||||||||||
Agreement term | 30 days | 30 days | |||||||||||||
Common Stock [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 64,072,001 | 58,463,770 | |||||||||||||
Number of shares issued for brokerage | 456,735 | 593,557 | |||||||||||||
Common stock issues value | $ 6,407 | $ 5,846 | |||||||||||||
Accumulated Deficit [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Common stock issues value | |||||||||||||||
Additional Paid-In Capital [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Common stock issues value | 8,945,522 | 8,994,444 | |||||||||||||
Accumulated Other Comprehensive Income [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Common stock issues value | |||||||||||||||
Network 1 Financial Securities, Inc. [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Cash fee | $ 710,000 | $ 710,000 | |||||||||||||
Number of shares issued | 38,461,500 | 38,461,500 | |||||||||||||
Number of shares issued for brokerage | 4,450,000 | 4,450,000 | |||||||||||||
Commission rate | 8.00% | ||||||||||||||
Network 1 Financial Securities, Inc. [Member] | Common Stock [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 2,200,000 | ||||||||||||||
Network 1 Financial Securities, Inc. [Member] | Warrant [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 1,153,846 | 1,153,846 | |||||||||||||
Warrant term | 5 years | 5 years | |||||||||||||
Stock issued price per share (in dollars per share) | $ 0.143 | $ 0.143 | |||||||||||||
Two Employee [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 1,250,000 | ||||||||||||||
Network1FinancialSecuritiesIncMember | Warrant [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 2,470,000 | ||||||||||||||
Warrant term | 5 years | ||||||||||||||
Common stock issues value | $ 659,000 | ||||||||||||||
Exercise price | $ 0.165 | ||||||||||||||
Granted | $ 314,000 | ||||||||||||||
Mr.Stern [Member] | Common Stock [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 6,666,667 | ||||||||||||||
August 2018 Accredited Investors [Member] | Common Stock [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued on conversion | 1,600,000 | ||||||||||||||
August 2018 Accredited Investors [Member] | Warrant [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued on conversion | 3,500,000 | ||||||||||||||
Exercise price (in dollars per share) | $ 0.05 | $ 0.05 | |||||||||||||
Bridgeworks LLC [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Lease expenses | $ 89,100 | $ 71,950 | |||||||||||||
Service Provider [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued for brokerage | 456,735 | ||||||||||||||
Mr. Philip D. Beck [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Consulting services | $ 34,964 | ||||||||||||||
Confidential Settlement Agreement and General Release [Member] | Mr. Douglas Solomon [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Professional fees | $ 8,048 | $ 160,000 | |||||||||||||
Number of shares vested | 20,000,000 | ||||||||||||||
Subscription Agreements [Member] | Warrant1Member | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 2,470,000 | ||||||||||||||
Warrant term | 5 years | ||||||||||||||
Stock issued price per share (in dollars per share) | $ 0.165 | ||||||||||||||
Common stock issues value | $ 314,000 | ||||||||||||||
Subscription Agreements [Member] | Network 1 Financial Securities, Inc. [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Cash fee | $ 240,000 | ||||||||||||||
Number of shares issued | 1,000,000 | ||||||||||||||
Subscription Agreements [Member] | Several Accredited Investors (the "March 2017 Accredited Investors") [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 20,000,000 | ||||||||||||||
Common stock issues value | $ 4,000,000 | ||||||||||||||
Subscription Agreements [Member] | Herbert Selzer [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Additional number of shares issued | 500,000 | ||||||||||||||
Subscription Agreements [Member] | Network1FinancialSecuritiesIncMember | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Cash fee | $ 629,000 | ||||||||||||||
Subscription Agreements [Member] | August 2018 Accredited Investors [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 64,072,000 | ||||||||||||||
Common stock issues value | $ 9,611,000 | ||||||||||||||
Subscription Agreements [Member] | Mr. Theodore Stern [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Additional number of shares issued | 2,000,000 | ||||||||||||||
Subscription Agreements [Member] | December 2017 Accredited Investors [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Cash fee | $ 350,000 | ||||||||||||||
Number of shares issued | 38,464,000 | ||||||||||||||
Common stock issues value | $ 5,000,000 | ||||||||||||||
Subscription Agreements [Member] | December 2017 Accredited Investors [Member] | Warrant [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 1,153,846 | ||||||||||||||
Warrant term | 5 years | ||||||||||||||
Stock issued price per share (in dollars per share) | $ 0.143 | ||||||||||||||
Common stock issues value | $ 181,154 | ||||||||||||||
Conversion Agreements [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Face amount | $ 300,000 | ||||||||||||||
Conversion Agreements [Member] | Vista Associates [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Total debt | $ 40,000 | $ 40,000 | |||||||||||||
Number of shares issued on conversion | 1,537,778 | ||||||||||||||
Conversion Agreements [Member] | Several Accredited Investor [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued on conversion | 84,822,000 | ||||||||||||||
Conversion Agreements [Member] | Herbert Selzer [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Total debt | $ 150,000 | $ 150,000 | |||||||||||||
Number of shares issued on conversion | 1,753,500 | ||||||||||||||
Conversion Agreements [Member] | Several Accredited Investors (the "Investors") [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued on conversion | 84,822,006 | ||||||||||||||
Exercise price (in dollars per share) | $ 0.10 | $ 0.10 | |||||||||||||
Securities Purchase Agreement [Member] | Network 1 Financial Securities, Inc. [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued for brokerage | 1,200,000 | ||||||||||||||
Agency Agreement [Member] | Mr. Douglas Solomon [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Professional fees | $ 84,000 | $ 54,000 | |||||||||||||
Description of non-exclusive sales agency | A non- exclusive sales agent for the Company’s products on an as needed basis for a term of three years in consideration of sales commissions. | ||||||||||||||
Restricted Stock Purchase Agreements [Member] | Mr. Philip D. Beck [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 15,000,000 | ||||||||||||||
Stock issued price per share (in dollars per share) | $ 0.0001 | 0.0001 | |||||||||||||
Exercise price (in dollars per share) | $ 0.10 | 0.10 | |||||||||||||
Vesting term | 10 years | ||||||||||||||
Restricted Stock Purchase Agreements [Member] | Mr. Stuart P. Stoller [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Number of shares issued | 5,000,000 | ||||||||||||||
Stock issued price per share (in dollars per share) | $ 0.0001 | 0.0001 | |||||||||||||
Exercise price (in dollars per share) | $ 0.10 | $ 0.10 | |||||||||||||
Vesting term | 10 years | ||||||||||||||
Senior Unsecured Note [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Face amount | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 | ||||||||||||
Number of shares issued | 4,500,000 | 1,500,000 | |||||||||||||
Loan interest expense | 158,000 | $ 275,000 | $ 59,000 | $ 284,000 | |||||||||||
Warrant term | 2 years | ||||||||||||||
Common stock issues value | $ 1,147,500 | $ 420,000 | |||||||||||||
Debt repayment | $ 1,000,000 | ||||||||||||||
12% Promissory Notes Due in January 2017 [Member] | |||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||
Face amount | $ 13,609 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | |||
Outstanding at beginning | 46,201,477 | ||
Outstanding at ending | 46,201,477 | 46,201,477 | |
Outstanding at beginning | $ 0.08 | ||
Outstanding at ending | $ 0.08 | $ 0.08 | |
Weighted Average Remaining Life | |||
Outstanding at beginning | 1 year 10 months 25 days | ||
Outstanding at end | 1 year 7 months 6 days | ||
Warrant [Member] | |||
Number of Shares | |||
Outstanding at beginning | 46,201,477 | 48,164,543 | 51,138,697 |
Granted | 2,470,267 | 1,153,846 | |
Exercised/Cancelled | (4,333,333) | (4,128,000) | |
Outstanding at ending | 46,201,477 | 48,164,543 | |
Outstanding at beginning | $ 0.08 | $ 0.11 | $ 0.11 |
Granted | 0.14 | 0.14 | |
Exercised/Cancelled | 0.05 | 0.08 | |
Outstanding at ending | $ 0.08 | $ 0.11 | |
Weighted Average Remaining Life | |||
Outstanding at beginning | 2 years 9 months 18 days | 2 years 9 months 18 days | |
Granted | 5 years | 5 years | |
Outstanding at end | 2 years 10 months 25 days | 1 year 10 months 25 days |
Stockholder's Equity (Details 1
Stockholder's Equity (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend Rate | 0.00% | 0.00% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Volatility | 93.00% | 93.00% |
Expected Term | 5 years 10 months 25 days | 5 years 10 months 25 days |
Risk Free Rate | 3.00% | 1.49% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Volatility | 79.00% | 79.00% |
Expected Term | 2 years 6 months | 2 years 6 months |
Risk Free Rate | 2.42% | 1.16% |
Stockholder's Equity (Details 2
Stockholder's Equity (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | |||
Outstanding at beginning | 106,253,339 | 103,208,331 | 86,925,000 |
Granted | 6,220,000 | 21,250,000 | |
Forfeited | (4,966,669) | ||
Exercised | (3,174,992) | ||
Outstanding at end | 106,253,339 | 106,253,339 | 103,208,331 |
Exercisable at end | 97,165,278 | 92,925,694 | |
Weighted Average Exercise Price | |||
Outstanding at beginning | $ 0.20 | $ 0.19 | $ 0.21 |
Granted | 0.22 | 0.11 | |
Forfeited | 0.08 | ||
Exercised | 0.13 | ||
Outstanding at end | 0.20 | 0.20 | $ 0.19 |
Exercisable at end | $ 0.20 | $ 0.20 | |
Weighted Average Contractual Term (Yrs.) | |||
Outstanding at beginning | 7 years 4 months 24 days | 9 years 6 months | 8 years 8 months 12 days |
Granted | 10 years | 10 years | |
Exercised | |||
Outstanding at end | 7 years 1 month 6 days | 9 years 6 months | 9 years 6 months |
Exercisable at end | 7 years 1 month 6 days | 7 years 4 months 24 days | |
Outstanding at beginning | $ 1,989,163 | $ 10,023,400 | $ 7,698,650 |
Granted | 2,868,750 | 7,475,000 | |
Forfeited | |||
Exercised | |||
Outstanding at end | 1,989,163 | 1,989,163 | $ 10,023,400 |
Exercisable at end | $ 1,886,038 | $ 3,316,208 |
Stockholder's Equity (Details 3
Stockholder's Equity (Details 3) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 106,253,339 | 106,253,339 |
Weighted Average Contractual Life | 0 years | 0 years |
Exercisable | 92,925,694 | |
Exercise Price $0.0001 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 3,500,000 | 3,500,000 |
Weighted Average Contractual Life | 6 years 6 months | 6 years 9 months 18 days |
Exercisable | 3,500,000 | 3,500,000 |
Exercise Price $0.05 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 32,783,339 | 32,783,339 |
Weighted Average Contractual Life | 7 years 7 months 6 days | 7 years 7 months 6 days |
Exercisable | 30,720,833 | 28,314,583 |
Exercise Price $0.1 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 27,200,000 | 27,200,000 |
Weighted Average Contractual Life | 7 years 6 months | 7 years 9 months 18 days |
Exercisable | 25,811,111 | 24,977,778 |
Exercise Price $0.12 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 970,000 | 970,000 |
Weighted Average Contractual Life | 9 years 6 months | 9 years 9 months 18 days |
Exercisable | ||
Exercise Price $0.13 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 250,000 | 250,000 |
Weighted Average Contractual Life | 8 years 7 months 6 days | 8 years 9 months 18 days |
Exercisable | 83,333 | 83,333 |
Exercise Price $0.15 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 2,800,000 | 2,800,000 |
Weighted Average Contractual Life | 6 years 10 months 25 days | 6 years 10 months 24 days |
Exercisable | 2,800,000 | 2,800,000 |
Exercise Price $0.22 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 2,750,000 | 2,750,000 |
Weighted Average Contractual Life | 8 years 9 months 18 days | 9 years |
Exercisable | 750,000 | 750,000 |
Exercise Price $0.25 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 2,500,000 | 2,500,000 |
Weighted Average Contractual Life | 8 years 7 months 6 days | 8 years 10 months 25 days |
Exercisable | 1,166,667 | 500,000 |
Exercise Price $0.26 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 500,000 | 500,000 |
Weighted Average Contractual Life | 9 years 3 months 19 days | 9 years 3 months 18 days |
Exercisable | ||
Exercise Price $0.29 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 1,000,000 | 1,000,000 |
Weighted Average Contractual Life | 8 years | 8 years 3 months 18 days |
Exercisable | 333,334 | |
Exercise Price $0.40 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 1,000,000 | 1,000,000 |
Weighted Average Contractual Life | 7 years 2 months 12 days | 7 years 2 months 12 days |
Exercisable | 1,000,000 | 1,000,000 |
Exercise Price $0.45 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Outstanding | 31,000,000 | 31,000,000 |
Weighted Average Contractual Life | 6 years 7 months 6 days | 6 years 10 months 24 days |
Exercisable | 31,000,000 | 31,000,000 |
Stockholder's Equity (Details T
Stockholder's Equity (Details Textual) - USD ($) | Dec. 18, 2017 | Mar. 22, 2017 | Feb. 22, 2017 | Jan. 31, 2017 | Aug. 31, 2018 | Jan. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 28, 2017 | Dec. 31, 2016 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 500,000,000 | ||||||||
Common stock, issued | 478,950,996 | 403,311,988 | 478,950,996 | |||||||||
Common stock, outstanding | 478,950,996 | 403,311,988 | 478,950,996 | |||||||||
Preferred stock, authorized | 20,000,000 | |||||||||||
Fair value of shares issued | $ 8,951,929 | $ 9,000,290 | ||||||||||
Number of shares issued for services | 594,000 | |||||||||||
Number of shares issued for services, value | 97,126 | $ 140,151 | ||||||||||
Number of shares issued for acquisition, value | ||||||||||||
Common stock issued upon exercise of warrants | $ 26,400 | |||||||||||
Number of stock granted | 15,000,000 | |||||||||||
Subscription Agreements [Member] | ||||||||||||
Cancellation of common stock | 2,500,000 | |||||||||||
Conversion Agreements [Member] | ||||||||||||
Cancellation of common stock | 2,500,000 | |||||||||||
Value of cancellation shares | $ 300,000 | |||||||||||
Debt accrued interest | $ 31,000 | |||||||||||
Warrant [Member] | Conversion Agreements [Member] | ||||||||||||
Cancellation of common stock | 3,600,000 | |||||||||||
Common Stock [Member] | ||||||||||||
Common stock, outstanding | 478,950,996 | 403,311,988 | 478,950,996 | 405,708,228 | 234,704,655 | |||||||
Number of shares issued | 64,072,001 | 58,463,770 | ||||||||||
Fair value of shares issued | $ 6,407 | $ 5,846 | ||||||||||
Number of shares issued for services | 456,735 | 593,557 | ||||||||||
Number of shares issued for services, value | $ 46 | $ 60 | ||||||||||
Number of shares issued for aquisition | (728,448) | |||||||||||
Number of shares issued for acquisition, value | $ (73) | |||||||||||
Common stock issued upon exercise of warrants | $ 53 | |||||||||||
Common stock issued upon exercise of warrants (in shares) | 528,000 | |||||||||||
Warrant1Member | Subscription Agreements [Member] | ||||||||||||
Number of shares issued | 2,470,000 | |||||||||||
Shares issued price per share (in dollars per share) | $ 0.165 | |||||||||||
Warrant term | 5 years | |||||||||||
Fair value of shares issued | $ 314,000 | |||||||||||
Additional Paid-In Capital [Member] | ||||||||||||
Fair value of shares issued | 8,945,522 | $ 8,994,444 | ||||||||||
Number of shares issued for services, value | 97,080 | 140,091 | ||||||||||
Number of shares issued for acquisition, value | 73 | |||||||||||
Common stock issued upon exercise of warrants | 26,347 | |||||||||||
Accumulated Deficit [Member] | ||||||||||||
Fair value of shares issued | ||||||||||||
Number of shares issued for services, value | ||||||||||||
Number of shares issued for acquisition, value | ||||||||||||
Accumulated Other Comprehensive Income [Member] | ||||||||||||
Fair value of shares issued | ||||||||||||
Number of shares issued for services, value | ||||||||||||
Number of shares issued for acquisition, value | ||||||||||||
December 2017 Accredited Investors [Member] | Subscription Agreements [Member] | ||||||||||||
Number of shares issued | 38,464,000 | |||||||||||
Fair value of shares issued | $ 5,000,000 | |||||||||||
Cash fee | $ 350,000 | |||||||||||
December 2017 Accredited Investors [Member] | Warrant [Member] | Subscription Agreements [Member] | ||||||||||||
Number of shares issued | 1,153,846 | |||||||||||
Shares issued price per share (in dollars per share) | $ 0.143 | |||||||||||
Warrant term | 5 years | |||||||||||
Fair value of shares issued | $ 181,154 | |||||||||||
Several Accredited Investors (the "March 2017 Accredited Investors") [Member] | Subscription Agreements [Member] | ||||||||||||
Number of shares issued | 20,000,000 | |||||||||||
Fair value of shares issued | $ 4,000,000 | |||||||||||
Network 1 Financial Securities, Inc. [Member] | ||||||||||||
Number of shares issued | 38,461,500 | 38,461,500 | ||||||||||
Cash fee | $ 710,000 | $ 710,000 | ||||||||||
Number of shares issued for services | 4,450,000 | 4,450,000 | ||||||||||
Network 1 Financial Securities, Inc. [Member] | Subscription Agreements [Member] | ||||||||||||
Number of shares issued | 1,000,000 | |||||||||||
Cash fee | $ 240,000 | |||||||||||
Network 1 Financial Securities, Inc. [Member] | Securities Purchase Agreement [Member] | ||||||||||||
Number of shares issued for services | 1,200,000 | |||||||||||
Network 1 Financial Securities, Inc. [Member] | Warrant [Member] | ||||||||||||
Number of shares issued | 1,153,846 | 1,153,846 | ||||||||||
Shares issued price per share (in dollars per share) | $ 0.143 | $ 0.143 | ||||||||||
Warrant term | 5 years | 5 years | ||||||||||
Network 1 Financial Securities, Inc. [Member] | Common Stock [Member] | ||||||||||||
Number of shares issued | 2,200,000 | |||||||||||
Two Employee [Member] | ||||||||||||
Number of shares issued | 1,250,000 | |||||||||||
Vista Associates [Member] | Conversion Agreements [Member] | ||||||||||||
Number of shares issued on conversion | 1,537,778 | |||||||||||
Mr. Philip D. Beck [Member] | Restricted Stock Purchase Agreements [Member] | ||||||||||||
Number of shares issued | 15,000,000 | |||||||||||
Shares issued price per share (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||||
Exercise price (in dollars per share) | $ 0.10 | 0.10 | ||||||||||
Mr. Stuart P. Stoller [Member] | Restricted Stock Purchase Agreements [Member] | ||||||||||||
Number of shares issued | 5,000,000 | |||||||||||
Shares issued price per share (in dollars per share) | $ 0.0001 | 0.0001 | ||||||||||
Exercise price (in dollars per share) | $ 0.10 | 0.10 | ||||||||||
Herbert Selzer [Member] | Conversion Agreements [Member] | ||||||||||||
Number of shares issued on conversion | 1,753,500 | |||||||||||
Several Accredited Investor [Member] | Conversion Agreements [Member] | ||||||||||||
Number of shares issued on conversion | 84,822,000 | |||||||||||
Share price | $ 0.10 | $ 0.10 | ||||||||||
Mr.Stern [Member] | Common Stock [Member] | ||||||||||||
Number of shares issued | 6,666,667 | |||||||||||
Network1FinancialSecuritiesIncMember | Subscription Agreements [Member] | ||||||||||||
Cash fee | $ 629,000 | |||||||||||
Network1FinancialSecuritiesIncMember | Warrant [Member] | ||||||||||||
Number of shares issued | 2,470,000 | |||||||||||
Fair value of shares issued | $ 659,000 | |||||||||||
August 2018 Accredited Investors [Member] | Subscription Agreements [Member] | ||||||||||||
Number of shares issued | 64,072,000 | |||||||||||
Fair value of shares issued | $ 9,611,000 | |||||||||||
August 2018 Accredited Investors [Member] | Warrant [Member] | ||||||||||||
Number of shares issued on conversion | 3,500,000 | |||||||||||
Exercise price (in dollars per share) | $ 0.05 | $ 0.05 | ||||||||||
Common stock issued upon exercise of warrants | $ 528,000 | |||||||||||
Common stock issued upon exercise of warrants (in shares) | 4,433,333 | 26,400 | ||||||||||
Number of stock vested | 3,200,000 | |||||||||||
August 2018 Accredited Investors [Member] | Common Stock [Member] | ||||||||||||
Number of shares issued on conversion | 1,600,000 | |||||||||||
Several Accredited Investors (the "Investors") [Member] | Conversion Agreements [Member] | ||||||||||||
Number of shares issued on conversion | 84,822,006 | |||||||||||
Exercise price (in dollars per share) | $ 0.10 | $ 0.10 | ||||||||||
Service Provider [Member] | ||||||||||||
Number of shares issued for services | 456,735 | |||||||||||
Number of shares issued for services, value | $ 97,126 | |||||||||||
10% Senior Unsecured Note Due January 2019 [Member] | Accredited Investor [Member] | Securities Purchase Agreement [Member] | ||||||||||||
Number of shares issued | 4,500,000 | |||||||||||
Fair value of shares issued | $ 3,000,000 | |||||||||||
Restricted Stock [Member] | ||||||||||||
Warrant term | 3 years | |||||||||||
Number of stock granted | 2,750,000 | |||||||||||
Number of stock vested | 2,000,000 | |||||||||||
Restricted Stock [Member] | Non Employee Directors [Member] | ||||||||||||
Number of stock granted | 2,456,000 | |||||||||||
Restricted Stock [Member] | Two Executive Offers [Member] | ||||||||||||
Number of stock granted | 15,000,000 | |||||||||||
MultiPay S.A.S [Member] | ||||||||||||
Cancellation of common stock | 728,448 |
Stockholder's Equity (Details_2
Stockholder's Equity (Details Textual 1) - USD ($) | Feb. 22, 2017 | Jan. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 962,000 | |||||
Number of options granted | 6,220,000 | 21,250,000 | ||||
Number of forfeited shares | 4,966,669 | |||||
Forfeited exercise price (in dollars per share) | $ 0.08 | |||||
Number of options exercisable | 97,165,278 | 92,925,694 | ||||
Exercise price of option (in dollars per share) | $ 0.20 | $ 0.20 | ||||
Stock based compensation | $ 415,379 | $ 738,212 | $ 2,429,959 | $ 5,650,072 | ||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock based compensation | 349,000 | |||||
Unrecognized compensation costs | 1,049,000 | |||||
Non Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options exercisable | 970,000 | |||||
Exercise price of option (in dollars per share) | $ 0.12 | |||||
Stock based compensation | 75,000 | |||||
Unrecognized compensation costs | $ 184,000 | $ 183,000 | ||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation costs | $ 1,138,000 | |||||
2017 Incentive Stock Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 70,000,000 | |||||
2014 Equity Compensation Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 25,000,000 | |||||
Employees and One Non Employee [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options granted | 231,000 | |||||
Vesting term | 3 years | |||||
Description Vesting period | The options have a term of ten years | |||||
Options fair value | $ 962,000 | |||||
Employees and One Non Employee [Member] | Tranche Two [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options exercisable | 2,000,000 | |||||
Exercise price of option (in dollars per share) | $ 0.25 | |||||
Employees and One Non Employee [Member] | Tranche One [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options exercisable | 3,250,000 | |||||
Exercise price of option (in dollars per share) | $ 0.22 | |||||
Two Employee [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued | 1,250,000 | |||||
Restricted Stock Purchase Agreements [Member] | Mr. Philip D. Beck [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued | 15,000,000 | |||||
Number of per share price | $ 0.0001 | |||||
Exercise price (in dollars per share) | $ 0.10 | |||||
Vesting term | 10 years | |||||
Restricted Stock Purchase Agreements [Member] | Mr. Stuart P. Stoller [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued | 5,000,000 | |||||
Number of per share price | $ 0.0001 | |||||
Exercise price (in dollars per share) | $ 0.10 | |||||
Vesting term | 10 years | |||||
Conversion Agreements [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Cancellation of common stock | 2,500,000 | |||||
Conversion Agreements [Member] | Several Accredited Investors (the "Investors") [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise price (in dollars per share) | $ 0.10 |
Direct Financing Lease (Details
Direct Financing Lease (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Remainder 2019 | $ 91,611 | $ 122,148 |
2020 | 122,148 | 122,148 |
2021 | 122,148 | 122,148 |
2022 | 122,148 | 122,148 |
2023 | 122,148 | 122,148 |
Thereafter | 285,012 | 285,012 |
Sub-total | 865,215 | 895,752 |
Less deferred revenue | (260,552) | (276,989) |
Net investment in lease | $ 604,663 | $ 618,763 |
Direct Financing Lease (Detai_2
Direct Financing Lease (Details Textual) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2016USD ($)Kiosks$ / shares | Sep. 30, 2015USD ($)Kiosks$ / shares | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Direct Financing Lease (Textual) | ||||||
Lease monthly rental | $ 381,000 | $ 360,000 | ||||
Revenues | $ 740,378 | $ 525,789 | 3,828,993 | 2,303,606 | ||
Equipment under capital lease | 748,000 | 748,000 | ||||
Aggregate minimum future lease payments | 1,422,000 | 1,422,000 | ||||
Unearned income | 474,000 | 474,000 | ||||
Cash Collection Services (the "Contract") [Member] | Recaudo Bogota S.A.S. [Member] | ||||||
Direct Financing Lease (Textual) | ||||||
Number of kiosks | Kiosks | 78 | 78 | ||||
Lease contract term | 10 years | 10 years | ||||
Lease monthly rental | $ 11,900 | $ 11,900 | ||||
Lease rent expense | 142,272 | 142,272 | ||||
Estimated executory costs | $ 1,677 | $ 1,677 | ||||
Purchase price at the end of lease term (in dollars per unit) | $ / shares | $ 40 | $ 40 | ||||
Revenues | $ 16,000 | $ 69,400 | $ 74,700 | |||
Receive monthly payments | $ 11,856 |
Lease Obligation Payable (Detai
Lease Obligation Payable (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
2019 | $ 32,322 | $ 43,096 |
2020 | 43,096 | 43,096 |
2021 | 43,096 | 43,096 |
2022 | 10,774 | 10,774 |
Total minimum lease payments | 129,288 | 140,062 |
Less: Amount representing interest | (21,162) | (24,554) |
Present value of minimum lease payments | $ 108,126 | $ 115,508 |
Lease Obligation Payable (Det_2
Lease Obligation Payable (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Lease Obligation Payable (Textual) | ||
Amortization of lease equipment | $ 66,970 | $ 58,934 |
Lease obligation interest rate | 12.00% | 12.00% |
Lease obligation maturity date | Mar. 31, 2022 | Mar. 31, 2022 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loss before income taxes | $ (2,249,038) | $ (2,748,364) | $ (9,997,371) | $ (17,452,848) |
Domestic Tax Authority [Member] | ||||
Loss before income taxes | (8,775,452) | (15,488,668) | ||
Outside United States [Member] | ||||
Loss before income taxes | $ (1,221,919) | $ (1,964,180) |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
US Federal Statutory Tax Rate | 21.00% | 34.00% |
State taxes | 4.35% | 3.63% |
Permanent items | (5.94%) | |
Amortization of Discount - APIC | 2.04% | |
NOL True-Ups | (2.48%) | (2.78%) |
Change in tax rates | (23.88%) | |
Change in valuation allowance | (27.82%) | (7.07%) |
Total | 0.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets | ||
Net operating loss | $ 5,981,004 | $ 4,305,729 |
Stock Options | 5,890,565 | 5,276,885 |
Charitable Contributions | 1,267 | 1,267 |
Basis Difference in Intangible Assets | 99,296 | 39,125 |
Basis Difference Fixed Assets | 5,096 | |
Accrued Payroll | 42,939 | 97,127 |
Valuation Allowance | (11,983,078) | (9,559,975) |
Total Deferred Tax Asset | 37,089 | 160,158 |
Debt Discounts | (27,086) | (115,553) |
Debt Issuance Costs | (10,003) | (42,667) |
Basis Difference Fixed Assets | (1,938) | |
Total Deferred Tax Liability | (37,089) | (160,158) |
Net Deferred Tax Asset |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2011 | |
Income Taxes (Textual) | |||
Valuation allowance | $ 11,983,078 | $ 9,559,975 | |
Revised federal income tax rate | 21.00% | ||
Corporate tax rate | 35.00% | ||
Domestic Tax Authority [Member] | |||
Income Taxes (Textual) | |||
Operating loss carryforwards | $ 19,900,000 | ||
State and Local Jurisdiction [Member] | |||
Income Taxes (Textual) | |||
Operating loss carryforwards | $ 19,900,000 | ||
Maximum [Member] | |||
Income Taxes (Textual) | |||
Expiration Year | Dec. 31, 2037 | ||
Minimum [Member] | |||
Income Taxes (Textual) | |||
Expiration Year | Dec. 31, 2020 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | Mar. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2017 |
Assets: | |||
Current portion of operating lease ROU assets - included in other current assets | $ 266,225 | ||
Operating lease ROU assets - included in Other Assets | 208,311 | $ 514,000 | $ 104,122 |
Liabilities: | |||
Current portion of ROU liabilities - included in Accounts payable and accrued expenses | 267,960 | ||
Long-term portion of ROU liabilities - included in Other liabilities | 209,998 | ||
Total operating lease liabilities | $ 477,958 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Leases Year Ending December 31: | ||
Remainder of 2019 | $ 235,467 | $ 289,000 |
2020 | 183,519 | 183,500 |
2021 | 92,391 | 92,400 |
2022 | 46,196 | 46,200 |
Total | 557,573 | $ 611,100 |
Less: Imputed interest | (79,615) | |
Total operating lease liabilities | $ 477,958 |
Commitments and Contingencies_4
Commitments and Contingencies (Details Textual) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2018USD ($) | Apr. 30, 2017USD ($) | Mar. 31, 2019USD ($)ft² | Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | |
Commitments and Contingencies (Textual) | |||||
Rent expense | $ 381,000 | $ 360,000 | |||
Weighted average lease term | 1 year 9 months 18 days | ||||
lease expense | $ 127,000 | ||||
Weighted average discount rate | 13.55% | ||||
Software Company [Member] | Software License [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Initial payment of license | 120,000 | ||||
First installment | 80,000 | ||||
Second installment | 40,000 | ||||
Identity Consulting Organization [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Rent expense | 15,000 | ||||
New Office Facilities [Member] | |||||
Commitments and Contingencies (Textual) | |||||
lease expense | $ 8,500 | ||||
New Office Facilities [Member] | COLOMBIA [Member] | MultiPay S.A.S [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Monthly rental payments | $ 9,000 | ||||
Agreement term | 2 years | ||||
New Office Facilities [Member] | Alpharetta Ga [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Monthly rental payments | $ 3,800 | ||||
New Office Facilities [Member] | Plantation [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Monthly rental payments | $ 2,700 | $ 2,700 | |||
Operating Lease term | The lease extends to August 2020. | ||||
Area of land for rent | ft² | 2,100 | 2,100 | |||
New Office Facilities [Member] | South Africa [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Monthly rental payments | $ 8,000 | $ 8,000 | |||
New Office Facilities [Member] | Long Beach, New York [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Additional monthly rental payments | $ 7,425 | $ 7,425 | |||
Agreement term | 30 days | 30 days | |||
Apartment [Member] | COLOMBIA [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Monthly rental payments | $ 1,700 | $ 2,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net Revenues: | $ 740,378 | $ 525,789 | $ 3,828,993 | $ 2,303,606 |
Loss from Operations | (2,168,374) | (2,509,195) | (9,323,219) | (12,009,115) |
Gain (loss) on derivative liability | (452,146) | |||
Interest Expense | (86,890) | (239,169) | (757,801) | (1,337,081) |
Other income/(expense) | 83,649 | 0 | ||
Loss before income taxes | (2,249,038) | (2,748,364) | (9,997,371) | (17,452,848) |
Income tax expense | (13,701) | (4,561) | (30,242) | (28,781) |
Net loss | (2,262,739) | (2,752,925) | (10,027,613) | (17,481,629) |
North America [Member] | ||||
Net Revenues: | 227,041 | 117,308 | 1,941,866 | 518,023 |
Loss from Operations | (737,962) | (1,047,886) | (1,959,125) | (2,672,161) |
South America [Member] | ||||
Net Revenues: | 125,328 | 79,088 | 476,234 | 394,320 |
Loss from Operations | (1,256,952) | (1,329,590) | (6,540,029) | (8,300,967) |
Africa [Member] | ||||
Net Revenues: | 388,009 | 329,393 | 1,410,893 | 1,391,263 |
Loss from Operations | (173,460) | (131,719) | (824,065) | (1,035,987) |
Identity Management [Member] | ||||
Net Revenues: | 615,050 | 446,701 | 3,352,759 | 1,909,286 |
Loss from Operations | (911,422) | (1,179,605) | (2,783,190) | (3,708,148) |
Payment Processing [Member] | ||||
Net Revenues: | 125,328 | 79,088 | 476,234 | 394,320 |
Loss from Operations | $ (1,256,952) | $ (1,329,590) | $ (6,540,029) | $ (8,300,967) |
Segment Information (Details Te
Segment Information (Details Textual) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | |
Segment Information (Textual) | |||
Number of reportable segments | Segment | 2 | 2 | |
Goodwill | $ 6,736,043 | $ 6,736,043 | $ 6,736,043 |
South America [Member] | |||
Segment Information (Textual) | |||
Gross long lived assets | 700,000 | 800,000 | |
Goodwill | 100,000 | 200,000 | |
Africa [Member] | |||
Segment Information (Textual) | |||
Gross long lived assets | 2,200,000 | 2,100,000 | |
Goodwill | 1,700,000 | 1,600,000 | |
North America [Member] | |||
Segment Information (Textual) | |||
Gross long lived assets | 7,300,000 | 7,400,000 | |
Goodwill | $ 4,900,000 | $ 4,900,000 |