Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Ipsidy Inc. | |
Entity Central Index Key | 0001534154 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-54545 | |
Entity Incorporation, State or Country Code | DE | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 518,125,454 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 4,184,220 | $ 4,972,331 |
Accounts receivable, net | 183,958 | 130,875 |
Current portion of net investment in direct financing lease | 61,942 | 58,727 |
Inventory | 183,746 | 133,541 |
Other current assets | 559,904 | 471,834 |
Total current assets | 5,173,770 | 5,767,308 |
Property and equipment, net | 191,426 | 204,000 |
Other assets | 1,912,654 | 1,566,177 |
Intangible assets, net | 3,798,597 | 3,310,184 |
Goodwill | 6,736,043 | 6,736,043 |
Net investment in direct financing lease, net of current portion | 528,240 | 560,036 |
Total assets | 18,340,730 | 18,143,748 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 1,864,148 | 1,302,226 |
Capital lease obligation, current portion | 32,798 | 30,898 |
Note payable, current portion | 1,913,591 | |
Deferred revenue | 409,788 | 236,270 |
Total current liabilities | 4,220,325 | 1,569,394 |
Capital lease obligation, net of current portion | 67,723 | 84,610 |
Notes payable, net of unamortized discounts and current portion | 10,267 | 1,853,648 |
Other liabilities | 215,163 | 45,000 |
Total liabilities | 4,513,478 | 3,552,652 |
Commitments and Contingencies (Note 12) | ||
Stockholders' Equity: | ||
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 518,125,454 and 478,950,996 shares issued and outstanding, respectively | 51,812 | 47,895 |
Additional paid in capital | 94,527,749 | 90,770,682 |
Subscription receivable | (100,000) | |
Accumulated deficit | (80,873,765) | (76,435,235) |
Accumulated comprehensive income | 221,456 | 207,754 |
Total stockholders' equity | 13,827,252 | 14,591,096 |
Total liabilities and stockholders' equity | $ 18,340,730 | $ 18,143,748 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 518,125,454 | 478,950,996 |
Common stock, outstanding | 518,125,454 | 478,950,996 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Total revenues, net | $ 644,961 | $ 1,839,327 | $ 1,385,339 | $ 2,365,116 |
Operating Expenses: | ||||
Cost of sales | 189,261 | 743,709 | 365,724 | 863,957 |
General and administrative | 2,367,298 | 3,256,150 | 4,934,433 | 6,055,153 |
Research and development | 6,032 | 20,330 | 10,398 | 25,691 |
Depreciation and amortization | 166,908 | 113,768 | 327,696 | 224,140 |
Total operating expenses | 2,729,499 | 4,133,957 | 5,638,251 | 7,168,941 |
Loss from operations | (2,084,538) | (2,294,630) | (4,252,912) | (4,803,825) |
Other Income (Expense): | ||||
Other income | 6,271 | 77,734 | 12,497 | 77,734 |
Interest expense, net | (93,260) | (246,298) | (180,150) | (485,467) |
Other expense, net | (86,989) | (168,564) | (167,653) | (407,733) |
Loss before income taxes | (2,171,527) | (2,463,194) | (4,420,565) | (5,211,558) |
Income Taxes | (4,264) | (9,856) | (17,965) | (14,417) |
Net loss | $ (2,175,791) | $ (2,473,050) | $ (4,438,530) | $ (5,225,975) |
Net Loss Per Share - Basic and Diluted (in dollars per share) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) |
Weighted Average Shares Outstanding - | ||||
Basic and Diluted (in shares) | 479,787,679 | 407,490,811 | 476,369,338 | 405,872,537 |
Lease Income [Member] | ||||
Revenues: | ||||
Total revenues, net | $ 16,056 | $ 17,520 | $ 32,493 | $ 35,382 |
Products and services [Member] | ||||
Revenues: | ||||
Total revenues, net | $ 628,905 | $ 1,821,807 | $ 1,352,846 | $ 2,329,734 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Other Comprehensive Income [Abstract] | ||||
Net Loss | $ (2,175,791) | $ (2,473,050) | $ (4,438,530) | $ (5,225,975) |
Foreign currency translation gain (loss) | (10,526) | (29,018) | 13,702 | (2,729) |
Comprehensive loss | $ (2,186,317) | $ (2,502,068) | $ (4,424,828) | $ (5,228,704) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Subscription Receivable [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Total |
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 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Restricted stock issued for services | $ 347 | 148,124 | 148,471 | |||
Restricted stock issued for services (in shares) | 3,470,000 | |||||
Common stock issued for services | $ 17 | 47,650 | 47,667 | |||
Common stock issued for services (in shares) | 170,240 | |||||
Stock-based compensation | 1,292,900 | 1,292,900 | ||||
Cashless exercise of common stock warrants | $ 350 | (350) | ||||
Cashless exercise of common stock warrants (in shares) | 3,498,943 | |||||
Cashless exercise of common stock options | $ 112 | (112) | ||||
Cashless exercise of common stock options (in shares) | 1,122,233 | |||||
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 | (5,225,975) | (5,225,975) | ||||
Foreign currency translation | (2,729) | (2,729) | ||||
Balance, ending at Jun. 30, 2018 | $ 41,234 | 80,541,474 | (71,633,597) | 252,122 | 9,201,233 | |
Balance, ending (in shares) at Jun. 30, 2018 | 412,344,956 | |||||
Balance, beginning at Mar. 31, 2018 | $ 40,571 | 79,791,311 | (69,160,547) | 281,140 | 10,952,475 | |
Balance, beginning (in shares) at Mar. 31, 2018 | 405,708,228 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Restricted stock issued for services | $ 275 | 148,124 | 148,399 | |||
Restricted stock issued for services (in shares) | 2,750,000 | |||||
Common stock issued for services | $ 17 | 47,650 | 47,667 | |||
Common stock issued for services (in shares) | 170,240 | |||||
Stock-based compensation | 554,760 | 554,760 | ||||
Cashless exercise of common stock warrants | $ 182 | (182) | ||||
Cashless exercise of common stock warrants (in shares) | 1,822,703 | |||||
Cashless exercise of common stock options | $ 112 | (112) | ||||
Cashless exercise of common stock options (in shares) | 1,122,233 | |||||
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 | $ (74) | 74 | ||||
Cancellation of shares in settlement of amounts due from prior acquisition (in shares) | (728,448) | |||||
Net loss | (2,473,050) | (2,473,050) | ||||
Foreign currency translation | (29,018) | (29,018) | ||||
Balance, ending at Jun. 30, 2018 | $ 41,234 | 80,541,474 | (71,633,597) | 252,122 | 9,201,233 | |
Balance, ending (in shares) at Jun. 30, 2018 | 412,344,956 | |||||
Balance, beginning at Dec. 31, 2018 | $ 47,895 | 90,770,682 | (76,435,235) | 207,754 | $ 14,591,096 | |
Balance, beginning (in shares) at Dec. 31, 2018 | 478,950,996 | 478,950,996 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Sale of common stock for cash | $ 3,876 | 3,876 | (100,000) | $ 2,832,152 | ||
Sale of common stock for cash (in shares) | 38,763,750 | |||||
Common stock issued for services | $ 41 | 41,071 | 41,112 | |||
Common stock issued for services (in shares) | 410,708 | |||||
Stock-based compensation | 787,720 | 787,720 | ||||
Net loss | (4,438,530) | (4,438,530) | ||||
Foreign currency translation | 13,702 | 13,702 | ||||
Balance, ending at Jun. 30, 2019 | $ 51,812 | 94,527,749 | (100,000) | (80,873,765) | 221,456 | $ 13,827,252 |
Balance, ending (in shares) at Jun. 30, 2019 | 518,125,454 | 518,125,454 | ||||
Balance, beginning at Mar. 31, 2019 | $ 47,895 | 91,186,061 | (78,697,974) | 231,982 | $ 12,767,964 | |
Balance, beginning (in shares) at Mar. 31, 2019 | 478,950,996 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Sale of common stock for cash | $ 3,876 | 2,928,276 | (100,000) | 2,832,152 | ||
Sale of common stock for cash (in shares) | 38,763,750 | |||||
Common stock issued for services | $ 41 | 41,071 | 41,112 | |||
Common stock issued for services (in shares) | 410,708 | |||||
Stock-based compensation | 372,341 | 372,341 | ||||
Net loss | (2,175,791) | (2,175,791) | ||||
Foreign currency translation | (10,526) | (10,526) | ||||
Balance, ending at Jun. 30, 2019 | $ 51,812 | $ 94,527,749 | $ (100,000) | $ (80,873,765) | $ 221,456 | $ 13,827,252 |
Balance, ending (in shares) at Jun. 30, 2019 | 518,125,454 | 518,125,454 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,438,530) | $ (5,225,975) |
Adjustments to reconcile net loss with cash flows from operations: | ||
Depreciation and amortization expense | 327,696 | 224,140 |
Stock-based compensation | 787,720 | 1,292,900 |
Stock issued for services | 41,112 | 196,138 |
Inventory reserve | 348,308 | |
Amortization of debt discounts and issuance costs | 54,882 | 323,114 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (63,869) | (620,817) |
Net investment in direct financing lease | 28,581 | 25,692 |
Other current assets | 155,035 | (263,165) |
Inventory | (60,818) | (41,435) |
Accounts payable and accrued expenses | 324,076 | 524,290 |
Deferred revenue | 173,518 | 535,434 |
Net cash flows from operating activities | (2,670,597) | (2,681,376) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (14,902) | (15,690) |
Investment in other assets | (940,068) | (389,767) |
Net cash flows from investing activities | (954,970) | (405,457) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the sale of common stock, net of offering costs | 2,832,152 | |
Principal payments on capital lease obligation | (14,987) | (13,301) |
Net cash flows from financing activities | 2,817,165 | (13,301) |
Effect of Foreign Currencies | 20,291 | (1,021) |
Net Change in Cash | (788,111) | (3,101,155) |
Cash, Beginning of the Period | 4,972,331 | 4,413,822 |
Cash, End of the Period | 4,184,220 | 1,312,667 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 6,996 | 8,247 |
Cash paid for income taxes | 4,264 | 14,417 |
Non-cash Investing and Financing Activities: | ||
Purchase of vehicle with note payable | 16,510 | |
Recognition of right to use asset and obligation | $ 514,473 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [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 for the year ended December 31, 2018. The results of operations for the three or six months ended June 30, 2019 are not necessarily indicative of the results to be expected for future periods or the full year. 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 June 30, 2019, the Company had an accumulated deficit of approximately $80.9 million. For the six months ended June 30, 2019, the Company earned revenue of approximately $1.4 million and incurred a loss from operations of approximately $4.3 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 or debt 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 six months ended June 30, 2019 and 2018 because their effect was antidilutive: Security 2019 2018 Stock Options 106,600,006 105,950,000 Warrants 47,453,227 43,731,210 Total 154,053,233 149,681,210 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 stated 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 June 30, 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 June 30, 2019 and December 31, 2018, the Company had an inventory valuation allowance of approximately $354,000 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 former 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 have elected 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 Notes 7, 10, 11 and 12 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 June 30, 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 six months ended June 30, 2019 and June 30, 2018, 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 June 30, 2019 and December 31, 2018, there were no deferred commissions. 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 June 30, 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 June 30, 2019, and December 31, 2018, the Company had deferred contract costs, represented by contract cost assets of approximately $4,000 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 performs its obligations. As of June 30, 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 was 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 where employee and non-employee share-based payments are presented. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 2 – PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following as of June 30, 2019 and December 31, 2018: 2019 2018 Computers and equipment $ 299,528 $ 238,442 Furniture and fixtures 156,867 156,867 456,395 395,309 Less Accumulated depreciation 264,969 191,309 Property and equipment, net $ 191,426 $ 204,000 Depreciation expense totaled $45,203 and $35,191 for the six months ended June 30, 2019 and 2018, respectively. |
OTHER ASSETS
OTHER ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018 are: 2019 2018 Software and development $ 1,734,122 $ 1,566,177 Operating Lease ROU assets, long term 178,532 — $ 1,912,654 $ 1,566,177 |
INTANGIBLE ASSETS, NET (OTHER T
INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 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 764,739 6,167 770,906 Amortization (79,358 ) (114,655 ) (87,264 ) (1,217 ) — (282,493 ) Carrying Value at June 30,2019 $ 1,049,376 $ 1,558,977 $ 1,104,678 $ 1,216 $ 84,349 $ 3,798,597 The following is a summary of intangible assets as of June 30, 2019: Acquired and Customer Developed Intellectual Patents Relationships Software Property Non-Compete Pending Total Cost $ 1,587,159 $ 1,724,621 $ 1,759,809 $ 14,087 $ 84,349 $ 5,170,025 Accumulated amortization (537,782 ) (165,644 ) (655,131 ) (12,871 ) — (1,371,428 ) Carrying Value at June 30,2019 $ 1,049,377 $ 1,558,977 $ 1,104,678 $ 1,216 $ 84,349 $ 3,798,597 Future expected amortization of intangible assets is as follows: Fiscal Year Ending December 31, Remainder of 2019 $ 358,948 2020 715,502 2021 715,502 2022 622,168 2023 571,180 Thereafter 815,297 $ 3,798,597 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018: 2019 2018 Trade payables $ 392,851 $ 401,272 Accrued interest 520,834 401,667 Accrued payroll and related obligations 282,513 260,153 Current portion of operating lease liabilities 251,206 — Other accrued expenses 416,744 239,134 $ 1,864,148 $ 1,302,226 |
NOTES PAYABLE, NET
NOTES PAYABLE, NET | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE, NET | NOTE 6 - NOTES PAYABLE, NET The following is a summary of notes payable as of June 30, 2019 and December 31, 2018: June 30, 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 note payable and 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 15,328 — Total Principal Outstanding $ 2,015,328 $ 2,000,000 Unamortized Deferred Debt Discount (66,804 ) (106,886 ) Unamortized Deferred Debt Issuance Costs (24,666 ) (39,466 ) Notes Payable, Net $ 1,923,858 $ 1,853,648 Notes Payable, current portion, net of discounts and current portion $ 1,913,591 $ — Notes Payable, Net of discounts and current portion 10,267 1,853,648 $ 1,923,858 $ 1,853,648 The following is a roll-forward of the Company’s notes payable and related discounts for the six months ended June 30, 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 (1,182 ) 14,800 40,082 53,700 Balance at June 30, 2019 $ 2,015,328 $ (24,666 ) $ (66,804 ) $ 1,923,858 Future maturities of notes payable are as follows as of June 30, 2019: July 1, 2019 – June 30, 2020 $ 2,005,061 July 1, 2020 – June 30, 2021 5,636 April 1, 2021 – June 30, 2022 4,631 $ 2,015,328 |
OTHER LIABILITIES
OTHER LIABILITIES | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LIABILITIES | NOTE 7 – OTHER LIABILITIES Other liabilities consisted of the following as of June 30, 2019 and December 31, 2018: 2019 2018 Operating lease liabilities, long term $ 170,163 $ — Other 45,000 45,000 $ 215,163 $ 45,000 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS Notes Payable During the quarter ended June 30,2019, the Company recorded approximately $119,000 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. Purchase of Common Stock In June 2019, two of the Company’s Directors and one Officer purchased 1,562,500 shares of common stock of the 2019 offering as described in Note 9. Other In connection with the 2019 offering of common stock, the Company incurred fees to Network 1 Financial Securities Inc. (“Network 1”), a registered broker dealer, one of the Company’s financial advisors. The Network 1 fees were approximately $109,000 paid in cash and 858,000 common stock purchase warrants with a fair value of approximately $54,000 that are exercisable during a term of five years at a price of $0.088 cents per share. A member of the Company’s Board of Director’s maintains a partnership with a key principal of Network 1. 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 June 30, 2019 and June 30, 2018, the Company paid $22,275 and $22,775, respectively. |
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCKHOLDER'S EQUITY | NOTE 9 STOCKHOLDER’S EQUITY Common Stock In June 2019, the Company entered into Subscription Agreements with accredited investors (the “2019 Accredited Investors”) pursuant to which the 2019 Accredited Investors purchased an aggregate of approximately 38,764,000 shares of the Company’s common stock for an aggregate purchase price of approximately $3,100,000. In connection with the private offering, the Company paid a cash fee of approximately $178,000 and issued 1,251,750 common stock purchase warrants with a fair value of approximately $79,000 that are exercisable during a term of five years at an exercise price of $0.088 per share. The Company also issued 410,708 shares of common stock during the six months ended June 30, 2019 to two service providers in satisfaction of approximately $41,000 due for services. Warrants The granted warrants to its investment bankers in connection with the June 2019 private common stock offering as described above in the in the six months ended June 30, 2019: Number of Weighted Weighted Outstanding at December 31, 2018 46,201,477 $ 0.08 1.9 Years Granted 1,251,750 0.09 5.0 Years Outstanding at June 30,2019 47,453,227 $ 0.09 1.3 Years Stock Options During the six months ended June 30, 2019, the Company granted options to acquire 600,000 shares of common stock to three employees at fair market value on date of grant. Of the 600,000 stock options, 475,000 options are earned over a three-year period and 125,000 options vest upon achieving certain performance thresholds. The options have a term of ten years and the approximate fair value of the options were $49,000. Expected Volatility – 75% Expected Term – 2.5 – 6.5 Years Risk Free Rate – 2.0% Dividend Rate – 0.00% Activity related to stock options for the six months ended June 30, 2019 is summarized as follows: Weighted Weighted Aggregate Number of Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding as of December 31, 2018 106,253,339 $ 0.20 7.4 $ 1,989,163 Granted 600,000 0.12 9.7 - Forfeitures (253,333 ) 0.10 - - Outstanding as of June 30,2019 106,600,006 0.20 7.1 $ 1,952,230 Exercisable as of June 30,2019 99,404,867 $ 0.20 7.1 $ 1,920,074 The following table summarizes stock option information as of June 30, 2019: Weighted Average Contractual Exercise Price Outstanding Life (Yrs.) Exercisable $ 0.00001 3,500,000 6.5 3,500,000 0.05 32,700,006 7.3 32,043,756 0.10 27,200,000 7.5 26,227,778 0.12 1,400,000 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 9.1 166,667 0.29 1,000,000 8.0 666,667 0.40 1,000,000 6.9 1,000,000 0.45 31,000,000 6.6 31,000,000 106,600,006 7.1 99,404,867 During the six months ended June 30,2019, the Company recognized approximately $654,000 of stock-based compensation expense related to options of which non-employees’ expense was approximately $151,000. As of June 30, 2019, there was approximately $840,000 of unrecognized compensation costs related to stock options outstanding of which approximately $108,000 was related to non-employees and will be expensed through 2022. |
DIRECT FINANCING LEASE
DIRECT FINANCING LEASE | 6 Months Ended |
Jun. 30, 2019 | |
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 kiosks were 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 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 quarter ended June 30, 2019 of approximately $16,000. The equipment is subject to a 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 is being 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 $ 61,074 2020 122,148 2021 122,148 2022 122,148 2023 122,148 Thereafter 285,012 Sub-total 834,678 Less deferred revenue (244,496 ) Net investment in lease $ 590,182 |
LEASE OBLIGATION PAYABLE
LEASE OBLIGATION PAYABLE | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 is $75,006. 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 June 30, 2019. The interest rate related to the lease obligation is 12% and the maturity date is June 30, 2022. Year Ending Remainder of 2019 $ 21,548 2020 43,096 2021 43,096 2022 10,774 Total minimum lease payments 118,514 Less: Amount representing interest (17,993 ) Present value of minimum lease payments $ 100,521 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019, lease expense was approximately $236,000 inclusive of short-term leases. The lease related balances included in the Condensed Consolidated Balance Sheet as of June 30, 2019 were as follows: Assets: Current portion of operating lease ROU assets - included in other current assets $ 243,105 Operating lease ROU assets – included in Other Assets 178,532 Total operating lease assets $ 421,637 Liabilities: Current portion of ROU liabilities – included in Accounts payable and accrued expenses $ 251,206 Long-term portion of ROU liabilities – included in Other liabilities 170,163 Total operating lease liabilities $ 421,369 The weighted average lease term remining is 1.5 years and weighted average discount rate is 13.55%. The following table presents the maturity of the Company’s operating lease liabilities as of June 30, 2019: Remainder of 2019 $ 163,216 2020 183,519 2021 92,391 2022 46,196 Total operating lease payments 485,322 Less: Imputed interest (63,953 ) Total operating lease liabilities $ 421,369 The Company leases approximately 2,100 square feet of office space in Plantation, Florida. Monthly rental is 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, Georgia, for approximately $3,800 per month through June 30, 2020 or through the termination of the master lease. The Company leases an office location 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
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 solutions 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 $8.0 million, $0.7 million and $2.1 million, respectively, of which $4.9 million, $0.1 million and $1.7 million related to goodwill as of June 30, 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 Six Months Ended June 30, June 30, June 30, June 30, 2019 2018 2019 2018 Revenues, net North America $ 146,583 $ 1,383,389 $ 373,624 $ 1,500,697 South America 120,613 116,398 245,941 195,486 Africa 377,765 339,540 765,774 668,933 644,961 1,839,327 1,385,339 2,365,116 Identity Solutions 524,348 1,722,929 1,139,398 2,169,630 Payment Processing 120,613 116,398 245,941 195,486 644,961 1,839,327 1,385,339 2,365,116 Loss From Operations North America (681,690 ) 433,957 (1,419,652 ) (613,929 ) South America (1,220,869 ) (2,277,874 ) (2,477,821 ) (3,607,464 ) Africa (181,979 ) (450,713 ) (355,439 ) (582,432 ) (2,084,538 ) (2,294,630 ) (4,252,912 ) (4,803,825 ) Identity Solutions (863,669 ) (16,756 ) (1,775,091 ) (1,196,361 ) Payment Processing (1,220,869 ) (2,277,874 ) (2,477,821 ) (3,607,464 ) (2,084,538 ) (2,294,630 ) (4,252,912 ) (4,803,825 ) Interest Expense (93,260 ) (246,298 ) (180,150 ) (485,467 ) Other income/(expense) 6,271 77,734 12,497 77,734 Loss before income taxes (2,171,527 ) (2,463,194 ) (4,420,565 ) (5,211,558 ) Income tax expense (4,264 ) (9,856 ) (17,965 ) (14,417 ) Net loss $ (2,175,791 ) $ (2,473,050 ) $ (4,438,530 ) $ (5,225,975 ) |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going concern | Going concern As of June 30, 2019, the Company had an accumulated deficit of approximately $80.9 million. For the six months ended June 30, 2019, the Company earned revenue of approximately $1.4 million and incurred a loss from operations of approximately $4.3 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 or debt 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 | 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 six months ended June 30, 2019 and 2018 because their effect was antidilutive: Security 2019 2018 Stock Options 106,600,006 105,950,000 Warrants 47,453,227 43,731,210 Total 154,053,233 149,681,210 |
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 stated 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 June 30, 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 June 30, 2019 and December 31, 2018, the Company had an inventory valuation allowance of approximately $354,000 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 | 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 former 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 have elected 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 Notes 7, 10, 11 and 12 to Condensed Consolidated Financial Statements for Additional Information. |
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 June 30, 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 six months ended June 30, 2019 and June 30, 2018, 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 June 30, 2019 and December 31, 2018, there were no deferred commissions. 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 June 30, 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 June 30, 2019, and December 31, 2018, the Company had deferred contract costs, represented by contract cost assets of approximately $4,000 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 performs its obligations. As of June 30, 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 | 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 was 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 where employee and non-employee share-based payments are presented. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of potentially dilutive securities | The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the three months ended June 30, 2019 and 2018 because their effect was antidilutive: Security 2019 2018 Stock Options 106,600,006 105,950,000 Warrants 47,453,227 43,731,210 Total 154,053,233 149,681,210 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following as of June 30, 2019 and December 31, 2018: 2019 2018 Computers and equipment $ 299,528 $ 238,442 Furniture and fixtures 156,867 156,867 456,395 395,309 Less Accumulated depreciation 264,969 191,309 Property and equipment, net $ 191,426 $ 204,000 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Assets [Abstract] | |
Schedule of other assets | The balances as of June 30, 2019 and December 31, 2018 are: 2019 2018 Software and development $ 1,734,122 $ 1,566,177 Operating Lease ROU assets, long term 178,532 — $ 1,912,654 $ 1,566,177 |
INTANGIBLE ASSETS, NET (OTHER_2
INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net (other than goodwill) | The following is a summary of activity related to intangible assets for the six months ended June 30, 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 764,739 6,167 770,906 Amortization (79,358 ) (114,655 ) (87,264 ) (1,217 ) — (282,493 ) Carrying Value at June 30,2019 $ 1,049,376 $ 1,558,977 $ 1,104,678 $ 1,216 $ 84,349 $ 3,798,597 The following is a summary of intangible assets as of June 30, 2019: Acquired and Customer Developed Intellectual Patents Relationships Software Property Non-Compete Pending Total Cost $ 1,587,159 $ 1,724,621 $ 1,759,809 $ 14,087 $ 84,349 $ 5,170,025 Accumulated amortization (537,782 ) (165,644 ) (655,131 ) (12,871 ) — (1,371,428 ) Carrying Value at June 30,2019 $ 1,049,377 $ 1,558,977 $ 1,104,678 $ 1,216 $ 84,349 $ 3,798,597 |
Schedule of future amortization expense of intangible assets | Future expected amortization of intangible assets is as follows: Fiscal Year Ending December 31, Remainder of 2019 $ 358,948 2020 715,502 2021 715,502 2022 622,168 2023 571,180 Thereafter 815,297 $ 3,798,597 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consisted of the following as of June 30, 2019 and December 31, 2018: 2019 2018 Trade payables $ 392,851 $ 401,272 Accrued interest 520,834 401,667 Accrued payroll and related obligations 282,513 260,153 Current portion of operating lease liabilities 251,206 — Other accrued expenses 416,744 239,134 $ 1,864,148 $ 1,302,226 |
NOTES PAYABLE, NET (Tables)
NOTES PAYABLE, NET (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | The following is a summary of notes payable as of June 30, 2019 and December 31, 2018: June 30, 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 note payable and 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 15,328 — Total Principal Outstanding $ 2,015,328 $ 2,000,000 Unamortized Deferred Debt Discount (66,804 ) (106,886 ) Unamortized Deferred Debt Issuance Costs (24,666 ) (39,466 ) Notes Payable, Net $ 1,923,858 $ 1,853,648 Notes Payable, current portion, net of discounts and current portion $ 1,913,591 $ — Notes Payable, Net of discounts and current portion 10,267 1,853,648 $ 1,923,858 $ 1,853,648 |
Schedule of notes payable and related discounts | The following is a roll-forward of the Company’s notes payable and related discounts for the six months ended June 30, 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 (1,182 ) 14,800 40,082 53,700 Balance at June 30, 2019 $ 2,015,328 $ (24,666 ) $ (66,804 ) $ 1,923,858 |
Schedule of future maturities of notes payable | Future maturities of notes payable are as follows as of June 30, 2019: July 1, 2019 – June 30, 2020 $ 2,005,061 July 1, 2020 – June 30, 2021 5,636 April 1, 2021 – June 30, 2022 4,631 $ 2,015,328 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other liabilities | Other liabilities consisted of the following as of June 30, 2019 and December 31, 2018: 2019 2018 Operating lease liabilities, long term $ 170,163 $ — Other 45,000 45,000 $ 215,163 $ 45,000 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of granted warrants | The granted warrants to its investment bankers in connection with the June 2019 private common stock offering as described above in the in the six months ended June 30, 2019: Number of Weighted Weighted Outstanding at December 31, 2018 46,201,477 $ 0.08 1.9 Years Granted 1,251,750 0.09 5.0 Years Outstanding at June 30,2019 47,453,227 $ 0.09 1.3 Years |
Schedule of black - scholes option-pricing model valuation assumption | The options have a term of ten years and the approximate fair value of the options were $49,000. Expected Volatility – 75% Expected Term – 2.5 – 6.5 Years Risk Free Rate – 2.0% Dividend Rate – 0.00% |
Schedule of outstanding stock options | Activity related to stock options for the six months ended June 30, 2019 is summarized as follows: Weighted Weighted Aggregate Number of Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding as of December 31, 2018 106,253,339 $ 0.20 7.4 $ 1,989,163 Granted 600,000 0.12 9.7 - Forfeitures (253,333 ) 0.10 - - Outstanding as of June 30,2019 106,600,006 0.20 7.1 $ 1,952,230 Exercisable as of June 30,2019 99,404,867 $ 0.20 7.1 $ 1,920,074 |
Schedule of stock option | The following table summarizes stock option information as of June 30, 2019: Weighted Average Contractual Exercise Price Outstanding Life (Yrs.) Exercisable $ 0.00001 3,500,000 6.5 3,500,000 0.05 32,700,006 7.3 32,043,756 0.10 27,200,000 7.5 26,227,778 0.12 1,400,000 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 9.1 166,667 0.29 1,000,000 8.0 666,667 0.40 1,000,000 6.9 1,000,000 0.45 31,000,000 6.6 31,000,000 106,600,006 7.1 99,404,867 |
DIRECT FINANCING LEASE (Tables)
DIRECT FINANCING LEASE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of future minimum lease payments to be received | Future minimum lease payments to be received under the lease for the next five years and thereafter are as follows: Remainder 2019 $ 61,074 2020 122,148 2021 122,148 2022 122,148 2023 122,148 Thereafter 285,012 Sub-total 834,678 Less deferred revenue (244,496 ) Net investment in lease $ 590,182 |
LEASE OBLIGATION PAYABLE (Table
LEASE OBLIGATION PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of lease obligation payable | The interest rate related to the lease obligation is 12% and the maturity date is June 30, 2022. Year Ending Remainder of 2019 $ 21,548 2020 43,096 2021 43,096 2022 10,774 Total minimum lease payments 118,514 Less: Amount representing interest (17,993 ) Present value of minimum lease payments $ 100,521 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of related lease balance | The lease related balances included in the Condensed Consolidated Balance Sheet as of June 30, 2019 were as follows: Assets: Current portion of operating lease ROU assets - included in other current assets $ 243,105 Operating lease ROU assets – included in Other Assets 178,532 Total operating lease assets $ 421,637 Liabilities: Current portion of ROU liabilities – included in Accounts payable and accrued expenses $ 251,206 Long-term portion of ROU liabilities – included in Other liabilities 170,163 Total operating lease liabilities $ 421,369 |
Schedule of future minimum lease payments required under non convertible operating leases | The following table presents the maturity of the Company’s operating lease liabilities as of June 30, 2019: Remainder of 2019 $ 163,216 2020 183,519 2021 92,391 2022 46,196 Total operating lease payments 485,322 Less: Imputed interest (63,953 ) Total operating lease liabilities $ 421,369 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of geographic region | The Company has included in the schedule below an allocation of corporate overhead based on management’s estimate of resource requirements. Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2019 2018 2019 2018 Revenues, net North America $ 146,583 $ 1,383,389 $ 373,624 $ 1,500,697 South America 120,613 116,398 245,941 195,486 Africa 377,765 339,540 765,774 668,933 644,961 1,839,327 1,385,339 2,365,116 Identity Solutions 524,348 1,722,929 1,139,398 2,169,630 Payment Processing 120,613 116,398 245,941 195,486 644,961 1,839,327 1,385,339 2,365,116 Loss From Operations North America (681,690 ) 433,957 (1,419,652 ) (613,929 ) South America (1,220,869 ) (2,277,874 ) (2,477,821 ) (3,607,464 ) Africa (181,979 ) (450,713 ) (355,439 ) (582,432 ) (2,084,538 ) (2,294,630 ) (4,252,912 ) (4,803,825 ) Identity Solutions (863,669 ) (16,756 ) (1,775,091 ) (1,196,361 ) Payment Processing (1,220,869 ) (2,277,874 ) (2,477,821 ) (3,607,464 ) (2,084,538 ) (2,294,630 ) (4,252,912 ) (4,803,825 ) Interest Expense (93,260 ) (246,298 ) (180,150 ) (485,467 ) Other income/(expense) 6,271 77,734 12,497 77,734 Loss before income taxes (2,171,527 ) (2,463,194 ) (4,420,565 ) (5,211,558 ) Income tax expense (4,264 ) (9,856 ) (17,965 ) (14,417 ) Net loss $ (2,175,791 ) $ (2,473,050 ) $ (4,438,530 ) $ (5,225,975 ) |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities, Shares | 154,053,233 | 149,681,210 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities, Shares | 106,600,006 | 105,950,000 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities, Shares | 47,453,227 | 43,731,210 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | |
Accumulated deficit | $ (80,873,765) | $ (80,873,765) | $ (76,435,235) | ||||
Revenue | 644,961 | $ 1,839,327 | 1,385,339 | $ 2,365,116 | |||
Loss from operations | (2,084,538) | $ (2,294,630) | (4,252,912) | $ (4,803,825) | |||
Deferred contract costs | 4,000 | 4,000 | 11,000 | ||||
Deferred revenue contract liability | 410,000 | 410,000 | 236,000 | ||||
Inventory valuation allowance | 354,000 | 354,000 | 707,000 | ||||
Operating lease right-of-use assets | 421,637 | 421,637 | $ 514,000 | ||||
Accounts payable and accrued expenses | $ 15,000 | 15,000 | $ 15,000 | ||||
Payment for service provider agreements | $ 15,000 | ||||||
Subsequent Event [Member] | |||||||
Deferred revenue contract liability | $ 275,000 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 456,395 | $ 395,309 |
Less Accumulated depreciation | 264,969 | 191,309 |
Property and equipment, net | 191,426 | 204,000 |
Computer and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 299,528 | 238,442 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 156,867 | $ 156,867 |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 45,203 | $ 35,191 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Other Assets [Abstract] | ||
Software and development | $ 1,734,122 | $ 1,566,177 |
Operating Lease ROU assets, long term | 178,532 | |
Other assets | $ 1,912,654 | $ 1,566,177 |
INTANGIBLE ASSETS, NET (OTHER_3
INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Carrying Value at beginning | $ 3,310,184 |
Additions | 770,906 |
Amortization | (282,493) |
Carrying Value at ending | $ 3,798,597 |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | 10 years |
Carrying Value at beginning | $ 1,128,734 |
Amortization | (79,358) |
Carrying Value at ending | $ 1,049,377 |
Acquired And Developed Software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | 5 years |
Carrying Value at beginning | $ 908,893 |
Additions | 764,739 |
Amortization | (114,655) |
Carrying Value at ending | $ 1,558,977 |
Intellectual Property [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | 10 years |
Carrying Value at beginning | $ 1,191,942 |
Amortization | (87,264) |
Carrying Value at ending | $ 1,104,678 |
Non-Compete [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | 10 years |
Carrying Value at beginning | $ 2,433 |
Amortization | (1,217) |
Carrying Value at ending | 1,216 |
Patents Pending [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Carrying Value at beginning | 78,182 |
Additions | 6,167 |
Amortization | |
Carrying Value at ending | $ 84,349 |
INTANGIBLE ASSETS, NET (OTHER_4
INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) (Details 1) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 5,170,025 | |
Accumulated amortization | (1,371,428) | |
Carrying Value | 3,798,597 | $ 3,310,184 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,587,159 | |
Accumulated amortization | (537,782) | |
Carrying Value | 1,049,377 | 1,128,734 |
Acquired And Developed Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,724,621 | |
Accumulated amortization | (165,644) | |
Carrying Value | 1,558,977 | 908,893 |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,759,809 | |
Accumulated amortization | (655,131) | |
Carrying Value | 1,104,678 | 1,191,942 |
Non-Compete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 14,087 | |
Accumulated amortization | (12,871) | |
Carrying Value | 1,216 | 2,433 |
Patents Pending [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 84,349 | |
Carrying Value | $ 84,349 | $ 78,182 |
INTANGIBLE ASSETS, NET (OTHER_5
INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) (Details 2) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2019 | $ 358,948 | |
2020 | 715,502 | |
2021 | 715,502 | |
2022 | 622,168 | |
2023 | 571,180 | |
Thereafter | 815,297 | |
Carrying Value | $ 3,798,597 | $ 3,310,184 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Trade payables | $ 392,851 | $ 401,272 |
Accrued interest | 520,834 | 401,667 |
Accrued payroll and related obligations | 282,513 | 260,153 |
Current portion of operating lease liabilities | 251,206 | |
Other accrued expenses | 416,744 | 239,134 |
Total | $ 1,864,148 | $ 1,302,226 |
NOTES PAYABLE, NET (Details)
NOTES PAYABLE, NET (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jan. 31, 2017 |
Short-term Debt [Line Items] | |||
Total Principle Outstanding | $ 2,015,328 | $ 2,000,000 | |
Unamortized Deferred Debt Discount | (66,804) | (106,886) | |
Unamortized Deferred Debt Issuance Costs | (24,666) | (39,466) | |
Notes Payable, Net | 1,923,858 | 1,853,648 | |
Notes Payable, current portion, net of discounts and current portion | 1,913,591 | ||
Notes Payable, Net of discounts and current portion | 10,267 | 1,853,648 | |
Total | 1,923,858 | 1,853,648 | |
Senior Unsecured Note [Member] | |||
Short-term Debt [Line Items] | |||
Total Principle Outstanding | 2,000,000 | 2,000,000 | |
Unamortized Deferred Debt Discount | $ (830,018) | ||
Vehicle [Member] | |||
Short-term Debt [Line Items] | |||
Total Principle Outstanding | $ 15,328 |
NOTES PAYABLE, NET (Details 1)
NOTES PAYABLE, NET (Details 1) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Principal Balance | |
Begining Balance | $ 2,000,000 |
Additions | 16,510 |
Amortization | (1,182) |
Ending Balance | 2,015,328 |
Debt Issuance Costs | |
Begining Balance | (39,466) |
Additions | |
Amortization | 14,800 |
Ending Balance | (24,666) |
Debt Discounts | |
Begining Balance | (106,886) |
Additions | |
Amortization | 40,082 |
Ending Balance | (66,804) |
Total | |
Begining Balance | 1,853,648 |
Additions | 16,510 |
Amortization | 53,700 |
Ending Balance | $ 1,923,858 |
NOTES PAYABLE, NET (Details 2)
NOTES PAYABLE, NET (Details 2) | Jun. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
July 1, 2019 - June 30, 2020 | $ 2,005,061 |
July 1, 2020 - June 30, 2021 | 5,636 |
April 1, 2021 - June 30, 2022 | 4,631 |
Total | $ 2,015,328 |
NOTES PAYABLE, NET (Details Nar
NOTES PAYABLE, NET (Details Narrative) - USD ($) | Apr. 30, 2018 | Jan. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Short-term Debt [Line Items] | |||||
Debt discount | $ 66,804 | $ 66,804 | $ 106,886 | ||
Common stock issues value | $ 2,832,152 | $ 2,832,152 | |||
Senior Unsecured Note [Member] | |||||
Short-term Debt [Line Items] | |||||
Debt term | 2 years | ||||
Debt discount | $ 830,018 | ||||
Debt issuance costs consisting shares value | $ 306,000 | ||||
Debt issuance costs consisting shares | 1,020,000 | ||||
Common stock issued to the noteholder | $ 1,500,000 | ||||
Face amount | $ 3,000,000 | ||||
Cash fee | 120,000 | ||||
Common stock issues value | $ 1,147,500 | ||||
Common stock issues shares | 4,500,000 | ||||
Vehicle [Member] | |||||
Short-term Debt [Line Items] | |||||
Debt term | 36 months | ||||
Interest rate | 10.80% | 10.80% | |||
Monthly payments | $ 539 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Other Liabilities [Abstract] | ||
Operating lease liabilities, long term | $ 170,163 | |
Other | 45,000 | $ 45,000 |
Total other liabilities | $ 215,163 | $ 45,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jan. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
Due to related parties paid | $ 22,275 | $ 22,275 | $ 22,275 | |
New Office Facilities [Member] | Long Beach, New York [Member] | ||||
Additional monthly rental payments | $ 7,425 | |||
Agreement term | 30 days | |||
Senior Unsecured Note [Member] | ||||
Interest Expenses | $ 119,000 | |||
Number of common stock purchased, shares | 4,500,000 | |||
Network 1 Financial Securities Inc [Member] | Warrants [Member] | ||||
Number of common stock purchased, shares | 858,000 | |||
Fair value of warrants | $ 54,000 | |||
Fees incurred | $ 109,000 | |||
Warrant term | 5 years | |||
Share price (in dollars per share) | $ 0.088 | $ 0.088 | ||
Directors And Officer [Member] | ||||
Number of common stock purchased, shares | 1,562,500 |
STOCKHOLDER'S EQUITY (Details)
STOCKHOLDER'S EQUITY (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding balance at beginning | shares | 46,201,477 |
Granted | shares | 1,251,750 |
Outstanding balance at ending | shares | 47,453,227 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Exercise Price [Roll Forward] | |
Beginning Balance Outstanding | $ / shares | $ 0.08 |
Granted | $ / shares | 0.09 |
Ending Balance Outstanding | $ / shares | $ 0.09 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Remaining Life [Roll Forward] | |
Beginning Balance Outstanding | 1 year 10 months 24 days |
Granted | 5 years |
Ending Balance Outstanding | 1 year 3 months 18 days |
STOCKHOLDER'S EQUITY (Details 1
STOCKHOLDER'S EQUITY (Details 1) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected Volatility | 75.00% |
Risk Free Rate | 2.00% |
Dividend Rate | 0.00% |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected Term | 2 years 6 months |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected Term | 5 years 10 months 24 days |
STOCKHOLDER'S EQUITY (Details 2
STOCKHOLDER'S EQUITY (Details 2) | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Number of Shares [Roll Forward] | |
Outstanding at beginning | shares | 106,253,339 |
Granted | shares | 600,000 |
Forfeitures | shares | (253,333) |
Outstanding at ending | shares | 106,600,006 |
Exercisable at ending | shares | 99,404,867 |
Weighted Average Exercise Price [Roll Forward] | |
Outstanding at beginning | $ / shares | $ 0.20 |
Granted | $ / shares | 0.12 |
Forfeitures | $ / shares | 0.10 |
Outstanding at ending | $ / shares | 0.20 |
Exercisable at ending | $ / shares | $ 0.20 |
Weighted Average Contractual Term [Roll Forward] | |
Outstanding at beginning | 7 years 4 months 24 days |
Granted | 9 years 8 months 12 days |
Forfeitures | |
Outstanding at ending | 7 years 1 month 6 days |
Exercisable at ending | 7 years 1 month 6 days |
Aggregate Intrinsic Value [Roll Forward] | |
Outstanding at beginning | $ | $ 1,989,163 |
Forfeitures | $ | |
Outstanding at ending | $ | 1,952,230 |
Exercisable at ending | $ | $ 1,920,074 |
STOCKHOLDER'S EQUITY (Details 3
STOCKHOLDER'S EQUITY (Details 3) | 6 Months Ended |
Jun. 30, 2019shares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 106,600,006 |
Weighted Average Contractual Life (Yrs.) | 7 years 1 month 6 days |
Exercisable | 99,404,867 |
Exercise Price $0.00001 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 3,500,000 |
Weighted Average Contractual Life (Yrs.) | 6 years 6 months |
Exercisable | 3,500,000 |
Exercise Price $0.05 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 32,700,006 |
Weighted Average Contractual Life (Yrs.) | 7 years 3 months 18 days |
Exercisable | 32,043,756 |
Exercise Price $0.10 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 27,200,000 |
Weighted Average Contractual Life (Yrs.) | 7 years 6 months |
Exercisable | 26,227,778 |
Exercise Price $0.12 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 1,400,000 |
Weighted Average Contractual Life (Yrs.) | 9 years 6 months |
Exercisable | |
Exercise Price $0.13 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 250,000 |
Weighted Average Contractual Life (Yrs.) | 8 years 7 months 6 days |
Exercisable | 83,333 |
Exercise Price $0.15 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 2,800,000 |
Weighted Average Contractual Life (Yrs.) | 6 years 7 months 6 days |
Exercisable | 2,800,000 |
Exercise Price $0.22 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 2,750,000 |
Weighted Average Contractual Life (Yrs.) | 8 years 9 months 18 days |
Exercisable | 750,000 |
Exercise Price $0.25 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 2,500,000 |
Weighted Average Contractual Life (Yrs.) | 8 years 7 months 6 days |
Exercisable | 1,166,667 |
Exercise Price $0.26 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 500,000 |
Weighted Average Contractual Life (Yrs.) | 9 years 1 month 6 days |
Exercisable | 166,667 |
Exercise Price $0.29 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 1,000,000 |
Weighted Average Contractual Life (Yrs.) | 8 years |
Exercisable | 666,667 |
Exercise Price $0.40 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 1,000,000 |
Weighted Average Contractual Life (Yrs.) | 6 years 10 months 24 days |
Exercisable | 1,000,000 |
Exercise Price $0.45 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 31,000,000 |
Weighted Average Contractual Life (Yrs.) | 6 years 7 months 6 days |
Exercisable | 31,000,000 |
STOCKHOLDER'S EQUITY (Details N
STOCKHOLDER'S EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock based compensation | $ 787,720 | $ 1,292,900 | ||
Number of common shares issued, amount | $ 2,832,152 | 2,832,152 | ||
Number of common shares issued for services, amount | $ 41,112 | $ 47,667 | $ 41,112 | $ 47,667 |
Number of options granted | 600,000 | |||
Vesting term | 3 years | |||
Vesting rights description | Of the 600,000 stock options, 475,000 options are earned over a three-year period and 125,000 options vest upon achieving certain performance thresholds. | |||
Common Stock [Member] | ||||
Number of common stock purchased, shares | 38,763,750 | 38,763,750 | ||
Number of common shares issued, amount | $ 3,876 | $ 3,876 | ||
Number of common shares issued for services, shares | 410,708 | 170,240 | 410,708 | 170,240 |
Number of common shares issued for services, amount | $ 41 | $ 17 | $ 41 | $ 17 |
Subscription Agreements [Member] | Accredited Investors 2019 [Member] | ||||
Fees paid | $ 178,000 | $ 178,000 | ||
Share price (in dollars per share) | $ 0.088 | $ 0.088 | ||
Subscription Agreements [Member] | Accredited Investors 2019 [Member] | Two Service Providers [Member] | ||||
Number of common shares issued for services, shares | 410,708 | |||
Number of common shares issued for services, amount | $ 41,000 | |||
Subscription Agreements [Member] | Accredited Investors 2019 [Member] | Warrants [Member] | ||||
Number of common stock purchased, shares | 1,251,750 | |||
Warrant term | 5 years | |||
Fair value of warrants | $ 79,000 | |||
Subscription Agreements [Member] | Accredited Investors 2019 [Member] | Common Stock [Member] | ||||
Number of common stock purchased, shares | 38,764,000 | |||
Number of common shares issued, amount | $ 3,100,000 | |||
Employee Stock Option [Member] | ||||
Stock based compensation | 654,000 | |||
Unrecognized compensation costs | $ 840,000 | $ 840,000 | ||
Number of options granted | 49,000 | |||
Vesting term | 10 years | |||
Non Employee Stock Option [Member] | ||||
Stock based compensation | $ 151,000 | |||
Unrecognized compensation costs | $ 108,000 | $ 108,000 |
DIRECT FINANCING LEASE (Details
DIRECT FINANCING LEASE (Details) | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Remainder 2019 | $ 61,074 |
2020 | 122,148 |
2021 | 122,148 |
2022 | 122,148 |
2023 | 122,148 |
Thereafter | 285,012 |
Sub-total | 834,678 |
Less deferred revenue | (244,496) |
Net investment in lease | $ 590,182 |
DIRECT FINANCING LEASE (Detai_2
DIRECT FINANCING LEASE (Details Narrative) | Sep. 30, 2015USD ($)Kiosks$ / shares | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) |
Revenue | $ 644,961 | $ 1,839,327 | $ 1,385,339 | $ 2,365,116 | |
Equipment under capital lease | 748,000 | 748,000 | |||
Aggregate minimum future lease payments | $ 1,422,000 | 1,422,000 | |||
Unearned income | 474,000 | ||||
Cash Collection Services (the "Contract") [Member] | Recaudo Bogota S.A.S. [Member] | |||||
Number of kiosks | Kiosks | 78 | ||||
Lease contract term | 10 years | ||||
Lease monthly rental | $ 11,900 | ||||
Lease rent expense | 142,272 | ||||
Estimated executory costs | $ 1,677 | ||||
Purchase price at the end of lease term (in dollars per unit) | $ / shares | $ 40 | ||||
Revenue | $ 16,000 | ||||
Receive monthly payments | $ 11,856 |
LEASE OBLIGATION PAYABLE (Detai
LEASE OBLIGATION PAYABLE (Details) | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 21,548 |
2020 | 43,096 |
2021 | 43,096 |
2022 | 10,774 |
Total minimum lease payments | 118,514 |
Less: Amount representing interest | (17,993) |
Present value of minimum lease payments | $ 100,521 |
LEASE OBLIGATION PAYABLE (Det_2
LEASE OBLIGATION PAYABLE (Details Narrative) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Leases [Abstract] | |
Amortization of lease equipment | $ 75,006 |
Lease obligation interest rate | 12.00% |
Lease obligation maturity date | Jun. 30, 2022 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Jun. 30, 2019 | Jan. 31, 2019 |
Assets: | ||
Current portion of operating lease ROU assets - included in other current assets | $ 243,105 | |
Operating lease ROU assets - included in Other Assets | 178,532 | |
Total operating lease assets | 421,637 | $ 514,000 |
Liabilities: | ||
Current portion of ROU liabilities - included in Accounts payable and accrued expenses | 251,206 | |
Long-term portion of ROU liabilities - included in Other liabilities | 170,163 | |
Total operating lease liabilities | $ 421,369 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) | Jun. 30, 2019USD ($) |
Operating Leases Year Ending December 31: | |
Remainder of 2019 | $ 163,216 |
2020 | 183,519 |
2021 | 92,391 |
2022 | 46,196 |
Total operating lease payments | 485,322 |
Less: Imputed interest | (63,953) |
Total operating lease liabilities | $ 421,369 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 6 Months Ended | |
Oct. 31, 2018USD ($) | Apr. 30, 2017USD ($) | Jun. 30, 2019USD ($)ft² | |
Weighted average lease term | 1 year 6 months | ||
lease expense | $ 236,000 | ||
Weighted average discount rate | 13.55% | ||
New Office Facilities [Member] | Plantation [Member] | |||
Monthly rental payments | $ 2,700 | ||
Area of land for rent | ft² | 2,100 | ||
New Office Facilities [Member] | Long Beach, New York [Member] | |||
Additional monthly rental payments | $ 7,425 | ||
Agreement term | 30 days | ||
New Office Facilities [Member] | Alpharetta Georgia [Member] | |||
Monthly rental payments | $ 3,800 | ||
New Office Facilities [Member] | COLOMBIA [Member] | MultiPay S.A.S [Member] | |||
Monthly rental payments | $ 8,500 | ||
Agreement term | 2 years | ||
New Office Facilities [Member] | South Africa [Member] | |||
Monthly rental payments | $ 8,000 | ||
Apartment [Member] | COLOMBIA [Member] | |||
Monthly rental payments | $ 2,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues, net | $ 644,961 | $ 1,839,327 | $ 1,385,339 | $ 2,365,116 |
Loss From Operations | (2,084,538) | (2,294,630) | (4,252,912) | (4,803,825) |
Interest Expense | (93,260) | (246,298) | (180,150) | (485,467) |
Other income/(expense) | 6,271 | 77,734 | 12,497 | 77,734 |
Loss before income taxes | (2,171,527) | (2,463,194) | (4,420,565) | (5,211,558) |
Income tax expense | (4,264) | (9,856) | (17,965) | (14,417) |
Net loss | (2,175,791) | (2,473,050) | (4,438,530) | (5,225,975) |
Identity Solutions [Member] | ||||
Revenues, net | 524,348 | 1,722,929 | 1,139,398 | 2,169,630 |
Loss From Operations | (863,669) | (16,756) | (1,775,091) | (1,196,361) |
Payment Processing [Member] | ||||
Revenues, net | 120,613 | 116,398 | 245,941 | 195,486 |
Loss From Operations | (1,220,869) | (2,277,874) | (2,477,821) | (3,607,464) |
North America [Member] | ||||
Revenues, net | 146,583 | 1,383,389 | 373,624 | 1,500,697 |
Loss From Operations | (681,690) | 433,957 | (1,419,652) | (613,929) |
South America [Member] | ||||
Revenues, net | 120,613 | 116,398 | 245,941 | 195,486 |
Loss From Operations | (1,220,869) | (2,277,874) | (2,477,821) | (3,607,464) |
Africa [Member] | ||||
Revenues, net | 377,765 | 339,540 | 765,774 | 668,933 |
Loss From Operations | $ (181,979) | $ (450,713) | $ (355,439) | $ (582,432) |
SEGMENT INFORMATION (Details Na
SEGMENT INFORMATION (Details Narrative) | 6 Months Ended | |
Jun. 30, 2019USD ($)Segment | Dec. 31, 2018USD ($) | |
Number of reportable segments | Segment | 2 | |
Goodwill | $ 6,736,043 | $ 6,736,043 |
North America [Member] | ||
Gross long lived assets | 8,000,000 | |
Goodwill | 4,900,000 | |
South America [Member] | ||
Gross long lived assets | 700,000 | |
Goodwill | 100,000 | |
Africa [Member] | ||
Gross long lived assets | 2,100,000 | |
Goodwill | $ 1,700,000 |