Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | authID Inc. | |
Trading Symbol | AUID | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 25,030,964 | |
Amendment Flag | false | |
Entity Central Index Key | 0001534154 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | true | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-40747 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-2069547 | |
Entity Address, Address Line One | 1385 S. Colorado Blvd | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80222 | |
Local Phone Number | 274-8700 | |
City Area Code | 516 | |
Title of 12(b) Security | Common Stock par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash | $ 7,105,967 | $ 5,767,276 |
Accounts receivable, net | 36,080 | 26,846 |
Other current assets | 1,009,323 | 502,721 |
Current assets held for sale | 81,412 | 629,752 |
Total current assets | 8,232,782 | 6,926,595 |
Property and Equipment, net | 25,399 | |
Other Assets | 300,172 | 2,501 |
Intangible Assets, net | 1,744,143 | 2,379,451 |
Goodwill | 4,183,232 | 4,183,232 |
Non-current assets held for sale | 28,857 | 312,831 |
Total assets | 14,489,186 | 13,830,009 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 2,007,631 | 1,778,092 |
Convertible debt | 662,000 | 662,000 |
Deferred revenue | 96,933 | 199,007 |
Current liabilities held for sale | 100,368 | 295,332 |
Total current liabilities | 2,866,932 | 2,934,431 |
Non-current Liabilities: | ||
Convertible debt | 7,699,754 | |
Total liabilities | 10,566,686 | 2,934,431 |
Commitments and Contingencies (Note 10) | ||
Stockholders’ Equity: | ||
Common stock, $0.0001 par value, 250,000,000 and 1,000,000,000 shares authorized; 24,914,418 and 23,294,024 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 2,490 | 2,329 |
Additional paid in capital | 137,889,398 | 126,581,702 |
Accumulated deficit | (134,108,443) | (115,899,939) |
Accumulated comprehensive income | 139,055 | 211,486 |
Total stockholders’ equity | 3,922,500 | 10,895,578 |
Total liabilities and stockholders’ equity | $ 14,489,186 | $ 13,830,009 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 1,000,000,000 |
Common stock, shares issued | 24,914,418 | 23,294,024 |
Common stock, shares outstanding | 24,914,418 | 23,294,024 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Verified software license | $ 30,023 | $ 12,281 | $ 116,925 | $ 45,302 |
Legacy authentication services | 157,068 | 144,559 | 418,878 | |
Total revenues, net | 30,023 | 169,349 | 261,484 | 464,180 |
Operating Expenses: | ||||
General and administrative | 3,914,580 | 4,467,040 | 11,583,798 | 8,526,671 |
Research and development | 1,620,344 | 811,724 | 4,689,515 | 1,765,098 |
Depreciation and amortization | 213,049 | 288,731 | 673,882 | 868,166 |
Total operating expenses | 5,747,973 | 5,567,495 | 16,947,195 | 11,159,935 |
Loss from continuing operations | (5,717,950) | (5,398,146) | (16,685,711) | (10,695,755) |
Other Income (Expense): | ||||
Other income (expense), net | (42,148) | 491,643 | (38,908) | 971,799 |
Interest expense, net | (437,301) | (29,577) | (931,205) | (580,928) |
Other income (expense), net | (479,449) | 462,066 | (970,113) | 390,871 |
Loss from continuing operations before income taxes | (6,197,399) | (4,936,080) | (17,655,824) | (10,304,884) |
Income tax (expense) benefit | 7,052 | 2,393 | (1,048) | (4,554) |
Loss from continuing operations | (6,190,347) | (4,933,687) | (17,656,872) | (10,309,438) |
Gain (Loss) from discontinued operations | 43,645 | (265,218) | (363,385) | (437,076) |
Loss from sale of a discontinued operation | (188,247) | (188,247) | ||
Total loss from discontinued operations | (144,602) | (265,218) | (551,632) | (437,076) |
Net loss | $ (6,334,949) | $ (5,198,905) | $ (18,208,504) | $ (10,746,514) |
Continuing operations (in Dollars per share) | $ (0.25) | $ (0.22) | $ (0.73) | $ (0.5) |
Discontinued operations (in Dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
Weighted Average Shares Outstanding – Basic and Diluted (in Shares) | 24,821,962 | 22,088,865 | 24,353,206 | 20,703,970 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Weighted Average Shares Outstanding - Basic and Diluted | 24,821,962 | 22,088,865 | 24,353,206 | 20,703,970 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (6,334,949) | $ (5,198,905) | $ (18,208,504) | $ (10,746,514) |
Foreign currency translation gain (loss) | (37,383) | 18,966 | (72,431) | 60,991 |
Comprehensive loss | $ (6,372,332) | $ (5,179,939) | $ (18,280,935) | $ (10,685,523) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total |
Balances at Dec. 31, 2020 | $ 1,964 | $ 102,651,304 | $ (98,234,151) | $ 160,642 | $ 4,579,759 |
Balances (in Shares) at Dec. 31, 2020 | 19,642,401 | ||||
Sale of common stock for cash | $ 164 | 10,282,834 | 10,282,998 | ||
Sale of common stock for cash (in Shares) | 1,642,856 | ||||
Stock-based compensation | 4,795,069 | 4,795,069 | |||
Settlement of accrued expense with stock options | 349,376 | 349,376 | |||
Cashless stock option exercise | $ 40 | (40) | |||
Cashless stock option exercise (in Shares) | 412,569 | ||||
Cashless warrant exercise | $ 27 | (27) | |||
Cashless warrant exercise (in Shares) | 263,661 | ||||
Warrant exercise for cash | $ 6 | 273,747 | 273,753 | ||
Warrant exercise for cash (in Shares) | 60,834 | ||||
Convertible note converted to common stock | $ 117 | 6,232,223 | 6,232,340 | ||
Convertible note converted to common stock (in Shares) | 1,171,296 | ||||
Stock option exercise for cash | $ 1 | 24,659 | 24,660 | ||
Stock option exercise for cash (in Shares) | 4,802 | ||||
Net loss | (10,746,514) | (10,746,514) | |||
Foreign currency translation | 60,991 | 60,991 | |||
Balance at Sep. 30, 2021 | $ 2,319 | 124,609,145 | (108,980,665) | 221,633 | 15,852,432 |
Balance (in Shares) at Sep. 30, 2021 | 23,198,419 | ||||
Balances at Jun. 30, 2021 | $ 2,137 | 111,493,973 | (103,781,760) | 202,667 | 7,917,017 |
Balances (in Shares) at Jun. 30, 2021 | 21,363,027 | ||||
Sale of common stock for cash | $ 164 | 10,282,834 | 10,282,998 | ||
Sale of common stock for cash (in Shares) | 1,642,856 | ||||
Stock-based compensation | 2,533,943 | 2,533,943 | |||
Cashless stock option exercise | $ 11 | (11) | |||
Cashless stock option exercise (in Shares) | 125,998 | ||||
Cashless warrant exercise | |||||
Cashless warrant exercise (in Shares) | 902 | ||||
Warrant exercise for cash | $ 6 | 273,747 | 273,753 | ||
Warrant exercise for cash (in Shares) | 60,834 | ||||
Stock option exercise for cash | $ 1 | 24,659 | 24,660 | ||
Stock option exercise for cash (in Shares) | 4,802 | ||||
Net loss | (5,198,905) | (5,198,905) | |||
Foreign currency translation | 18,966 | 18,966 | |||
Balance at Sep. 30, 2021 | $ 2,319 | 124,609,145 | (108,980,665) | 221,633 | 15,852,432 |
Balance (in Shares) at Sep. 30, 2021 | 23,198,419 | ||||
Balances at Dec. 31, 2021 | $ 2,329 | 126,581,702 | (115,899,939) | 211,486 | 10,895,578 |
Balances (in Shares) at Dec. 31, 2021 | 23,294,024 | ||||
Stock-based compensation | 6,726,871 | 6,726,871 | |||
Sale of common stock for cash, net of offering costs | $ 106 | 3,146,834 | 3,146,940 | ||
Sale of common stock for cash, net of offering costs (in Shares) | 1,063,514 | ||||
Common stock issued with convertible debt | $ 3 | 91,754 | 91,757 | ||
Common stock issued with convertible debt (in Shares) | 28,496 | ||||
Common stock issued for working capital facility | $ 10 | 302,990 | 303,000 | ||
Common stock issued for working capital facility (in Shares) | 100,000 | ||||
Shares issued in lieu of interest | $ 18 | 473,794 | 473,812 | ||
Shares issued in lieu of interest (in Shares) | 191,714 | ||||
Warrants for services with the issuance of convertible debt | 449,474 | 449,474 | |||
Cashless stock option exercise | $ 19 | (19) | |||
Cashless stock option exercise (in Shares) | 185,111 | ||||
Cashless warrant exercise | |||||
Cashless warrant exercise (in Shares) | 1,377 | ||||
Warrant exercise for cash | $ 4 | 65,999 | 66,003 | ||
Warrant exercise for cash (in Shares) | 36,668 | ||||
Convertible note converted to common stock | $ 1 | 49,999 | $ 50,000 | ||
Convertible note converted to common stock (in Shares) | 13,514 | ||||
Stock option exercise for cash (in Shares) | 281,031 | ||||
Net loss | (18,208,504) | $ (18,208,504) | |||
Foreign currency translation | (72,431) | (72,431) | |||
Balance at Sep. 30, 2022 | $ 2,490 | 137,889,398 | (134,108,443) | 139,055 | 3,922,500 |
Balance (in Shares) at Sep. 30, 2022 | 24,914,418 | ||||
Balances at Jun. 30, 2022 | $ 2,478 | 135,322,838 | (127,773,494) | 176,438 | 7,728,260 |
Balances (in Shares) at Jun. 30, 2022 | 24,789,418 | ||||
Stock-based compensation | 2,227,764 | 2,227,764 | |||
Shares issued in lieu of interest | $ 7 | 222,798 | 222,805 | ||
Shares issued in lieu of interest (in Shares) | 74,818 | ||||
Warrant exercise for cash | $ 4 | 65,999 | 66,003 | ||
Warrant exercise for cash (in Shares) | 36,668 | ||||
Convertible note converted to common stock | $ 1 | 49,999 | 50,000 | ||
Convertible note converted to common stock (in Shares) | 13,514 | ||||
Net loss | (6,334,949) | (6,334,949) | |||
Foreign currency translation | (37,383) | (37,383) | |||
Balance at Sep. 30, 2022 | $ 2,490 | $ 137,889,398 | $ (134,108,443) | $ 139,055 | $ 3,922,500 |
Balance (in Shares) at Sep. 30, 2022 | 24,914,418 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (18,208,504) | $ (10,746,514) |
Adjustments to reconcile net loss with cash flows from operations: | ||
Loss from sale of discontinued operation | 188,247 | |
Depreciation and amortization expense | 674,836 | 860,313 |
Stock-based compensation | 6,726,871 | 4,795,069 |
Shares issued in lieu of interest | 473,812 | |
Amortization of debt discounts and issuance costs | 403,244 | 554,020 |
Forgiveness of notes payable | (971,522) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (9,234) | (520,027) |
Net investment in direct financing lease | 61,044 | |
Other assets | (161,884) | (606,360) |
Accounts payable and accrued expenses | 235,050 | 565,011 |
Deferred revenue | (102,074) | 179,512 |
Other liabilities | (47,809) | |
Discontinued operations | 226,586 | 355,391 |
Net cash flows from operating activities | (9,553,050) | (5,521,872) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of discontinued operations, net of selling costs | 146,728 | |
Cash disposed of from the sale of a discontinued operation | (299,505) | |
Purchase of property and equipment | (7,981) | |
Purchase of property and equipment – discontinued operations | (16,159) | (79,703) |
Purchase of intangible assets | (6,311) | (23,702) |
Net cash flows from investing activities | (183,228) | (103,405) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock, net of offering costs | 3,146,940 | 10,282,998 |
Proceeds from issuance of convertible note payable, net of issuance costs | 7,992,841 | |
Proceeds from exercise of warrants | 66,003 | 273,753 |
Proceeds from exercise of stock options | 24,660 | |
Proceeds from paycheck protection program | 485,762 | |
Cash paid for working capital facility | (300,000) | |
Payments on notes payable – discontinued operations | (1,579) | (4,400) |
Principal payments on capital lease obligation – discontinued operations | (10,582) | (28,981) |
Net cash flows from financing activities | 10,893,623 | 11,033,792 |
Effect of Foreign Currencies | (78,019) | 59,607 |
Net Change in Cash | 1,079,326 | 5,468,122 |
Cash, Beginning of the Period | 5,767,276 | 3,506,171 |
Cash, Beginning of the Period – Discontinued Operations | 270,707 | 259,106 |
Cash, End of the Period – Discontinued Operations | (11,342) | (174,247) |
Cash, End of the Period | 7,105,967 | 9,059,152 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest – discontinued operations | 8,779 | |
Cash paid for income taxes | 861 | 2,193 |
Cash paid for income taxes – discontinued operations | 9,068 | 4,493 |
Schedule of Non-cash Investing and Financing Activities: | ||
Cashless option and warrant exercises | 19 | 67 |
Common stock issued with convertible notes | 91,757 | |
Common stock for working capital facility | 303,000 | |
Warrants for services with the issuance of convertible debt | 449,474 | |
Reclass from other assets to intangible assets | 8,270 | |
Settlement of accounts payable with issuance of common stock | 349,376 | |
Conversion of convertible note payable and accrued interest to common stock | $ 50,406 | $ 6,232,340 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION In the opinion of Management, the accompanying unaudited condensed consolidated financial statements are prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only of normal recurring accruals) which we considered as necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for future periods or the full year. Effective July 18, 2022, the Company changed its name to authID Inc. The condensed consolidated financial statements include the accounts of authID Inc. and its wholly-owned subsidiaries MultiPay S.A.S., IDGS S.A.S., ID Solutions, Inc., FIN Holdings Inc., Ipsidy Enterprises Limited, Cards Plus Pty Ltd. and authID Gaming Inc. (collectively the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. On May 4, 2022, the Board of Directors of authID Inc. approved a plan to exit from certain non-core activities comprising the MultiPay correspondent bank, payments services in Colombia and the Cards Plus cards manufacturing and printing business in South Africa (“Cards Plus business”). On August 29, 2022 the Company executed and completed the sale of the Cards Plus business. As of September 30, 2022 and December 31, 2021, Cards Plus Pty Ltd., MultiPay S.A.S., and IDGS S.A.S assets are presented as assets held for sale on the Company’s Condensed Consolidated Balance Sheets and their operations presented as discontinued operations in the Condensed Consolidated Statements of Operations as they met the criteria for discontinued operations under applicable accounting guidance. See Discontinued Operations Note 9 for details. Going Concern As of September 30, 2022, the Company had an accumulated deficit of approximately $134 million. For the three and nine months ended September 30, 2022 the Company earned revenue from continuing operations of approximately $0.03 million and $0.3 million respectively and incurred losses from operations of approximately $4.1 million and $11.4 million respectively, excluding the stock-based compensation expenses of $2.2 million and $6.7 million, respectively. 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. In March 2022, the Company secured additional financing which management believes will provide adequate funding for its operations as it continues to invest in its product, people, and technology. The Company may need additional capital in the future but currently believes it has sufficient funds to operate its business through December 31, 2023. See Notes 5, 6 and 8. Net Loss per Common Share The Company computes net loss per share in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible notes and stock warrants, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options, warrants and conversion of convertible notes. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the three and nine months ended September 30, 2022 and 2021 because their effect was antidilutive: Security 2022 2021 Convertible notes payable 2,590,547 117,529 Warrants 1,267,688 1,413,611 Stock options 9,895,187 9,322,153 13,753,422 10,853,293 Revenue Recognition Starting in the quarter ended June 30, 2022, the Company separately reports Verified software license revenue from Legacy authentication services revenue. Prior periods revenues are recast accordingly for comparison purposes. The Company recognizes revenue based on the identified performance obligations over the performance period for fixed consideration and/or for variable fees generated that are earned on a usage fee earned over time based on monthly transaction or user volumes and/or on a monthly flat fee rate. The Company had a contract liability of approximately $97,000 and $199,000 as of September 30, 2022 and December 31, 2021, respectively, for certain revenue that will be earned in future periods. Of the $97,000 of deferred revenue contract liability as of September 30, 2022, the majority will be earned during the balance of 2022. The majority of the deferred revenue contract liability as of December 31, 2021 related to legacy services and was recognized in the quarter ended March 31, 2022. All contracts are reviewed for their respective performance obligations and related revenue and expense recognition implications. Certain of the revenues are derived from Verified software licenses that could include multiple performance obligations. A performance obligation is defined as a promise to provide a “distinct” good or service to a customer. The Company has determined that one possible treatment under U.S. GAAP 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 should 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 the Company 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. The Company’s Legacy authentication services comprised annual software maintenance support services relating to previously licensed software on a stand ready basis. These fees were billed in advance and recognized ratably over the requisite service period as revenue. The contract terminated on April 1, 2022. Furthermore, the Company will capitalize the incremental costs of acquiring and fulfilling a contract with a customer if the Company expects to recover those costs. These incremental costs were immaterial in both three-month and nine-month periods and the Company recognizes these costs as incurred as they typically relate to a period of less than one year as allowed by the practical expedient and the amounts in the period were immaterial. Contract cost assets will be amortized using the straight-line method over the expected period of benefit beginning at the time revenue begins to be realized. The amortization of contract fulfillment cost assets associated with facilitating transactions will be recorded as cost of services in the Company’s Consolidated Statements of Operations. The amortization of contract acquisition cost assets associated with sales commissions that qualify for capitalization will be recorded as general and administrative expense in the Company’s Consolidated Statements of Operations. As of September 30, 2022 and December 31, 2021, the Company did not have any deferred contract costs or fees payable. |
Other Current Assets and Other
Other Current Assets and Other Assets | 9 Months Ended |
Sep. 30, 2022 | |
Other Current Assets and Other Assets [Abstract] | |
OTHER CURRENT ASSETS AND OTHER ASSETS | NOTE 2 – OTHER CURRENT ASSETS AND OTHER ASSETS Other current assets consisted of the following at September 30, 2022 (unaudited) and December 31, 2021: September 30, December 31, Prepaid Insurance $ 378,014 $ 126,042 Unamortized working capital facility fees 199,156 - Prepaid Third Party Services 281,587 215,326 Other 150,566 161,353 $ 1,009,323 $ 502,721 Other assets consisted of the following at September 30, 2022 (unaudited) and December 31, 2021: September 30, December 31, Unamortized working capital facility fees $ 298,734 $ - Other 1,438 2,501 $ 300,172 $ 2,501 |
Intangible Assets, Net (Other t
Intangible Assets, Net (Other than Goodwill) | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets, Net (Other than Goodwill) [Abstract] | |
INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) | NOTE 3 – INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) The Company’s intangible assets primarily consist of acquired and developed software that is being amortized over their estimated useful lives as indicated below. The following is a summary of activity related to intangible assets for the nine months ended September 30, 2022 (unaudited): Acquired and Patents Total Useful Lives 5 Years 10 years Carrying Value at December 31, 2021 $ 2,238,881 $ 140,570 $ 2,379,451 Additions - 6,311 6,311 Amortization (629,511 ) (12,108 ) (641,619 ) Carrying Value at September 30, 2022 $ 1,609,370 $ 134,773 $ 1,744,143 The following is a summary of intangible assets as of September 30, 2022 (unaudited): Acquired and Patents Total Cost $ 4,476,271 $ 164,614 $ 4,640,885 Accumulated amortization (2,866,901 ) (29,841 ) (2,896,742 ) Carrying Value at September 30, 2022 $ 1,609,370 $ 134,773 $ 1,744,143 Amortization expense totaled approximately $642,000 and $894,000 for the nine months ended September 30, 2022, and 2021, respectively. Future expected amortization of intangible assets is as follows: Fiscal Year Ending December 31, Remainder of 2022 $ 213,928 2023 804,722 2024 580,408 2025 63,792 2026 16,456 2027 16,456 Thereafter 48,381 $ 1,744,143 There is no impairment indicator identified for impairment of the Company’s intangible assets and goodwill as of September 30, 2022. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following as of September 30, 2022 (unaudited) and December 31, 2021: September 30, December 31, Trade payables $ 586,902 $ 548,087 Accrued interest 83,203 33,533 Accrued payroll and related obligations 627,881 783,144 Other accrued expenses 709,645 413,328 Total $ 2,007,631 $ 1,778,092 |
Working Capital Faciltiy
Working Capital Faciltiy | 9 Months Ended |
Sep. 30, 2022 | |
Working Capital Faciltiy [Abstract] | |
WORKING CAPITAL FACILTIY | NOTE 5 – WORKING CAPITAL FACILTIY On March 21, 2022, the Company entered into a Facility Agreement with a current shareholder and noteholder of the Company, pursuant to which the shareholder agreed to provide to the Company a $10.0 million unsecured standby line of credit facility that will rank behind the Convertible Notes (see Note 6) and may be drawn down in several tranches, subject to certain conditions described in the Facility Agreement (the “Credit Facility”). Pursuant to the Credit Facility, the Company agreed to pay a facility commitment fee of 100,000 shares of our common stock upon the effective date of the Credit Facility. Outstanding borrowings under the Credit Facility will accrue interest at 15% per annum. Drawdowns of the Credit Facility will be in tranches of not less than $500,000 up to the maximum amount of the Credit Facility, subject to the satisfaction of customary certifications and a certification from the Company that it has no more than $5 million of cash available to it as of the date of the drawdown request. The Credit Facility contains customary representations and warranties and defined events of default. The Company will be permitted to prepay borrowings under the Credit Facility at any time, without penalty, in part or in full. Upon conversion or redemption of all amounts outstanding under the Convertible Notes and release of all security over the Company’s assets, the Company will provide a lien on the Company’s intellectual property assets to secure the Credit Facility. There were no borrowings under the Credit Facility as of September 30, 2022. The unamortized deferred debt expense is approximately $498,000 of which $199,000 is included in other current assets and the balance in other assets. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes Payable [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 6 – CONVERTIBLE NOTES PAYABLE On March 21, 2022, the Company entered into a Securities Purchase Agreement (“SPA”) with certain accredited investors, including certain directors of the Company or their affiliates (the “Note Investors”), and, pursuant to the SPA, sold to the Note Investors Senior Secured Convertible Notes (the “Convertible Notes”) with an aggregate initial principal amount of approximately $9.2 million and a conversion price of $3.70. The Convertible Notes were sold with an aggregate cash origination fee of approximately $200,000, and we issued a total of approximately 28,500 shares of our common stock to the Note Investors as an additional origination fee. The Convertible Notes will accrue interest at the rate of 9.75% per annum, which will be payable in cash or, for some or all of the first five interest payments, in shares of our common stock at the Company’s option, on the last day of each calendar quarter before the maturity date and on the maturity date. The maturity date of the Convertible Notes is March 31, 2025. During the quarter ended September 30, 2022, a holder of a Convertible Note converted the full principal amount of $50,000 and accrued interest of $406 into 13,649 shares of our common stock. In the three and nine months ended September 30, 2022, the Company issued 74,683 and 191,579 shares of common stock for approximately $223,000 and $474,000, respectively of interest related to the Convertible Notes. In connection with the issuance of the Convertible Notes, the Company issued 142,690 common stock warrants to the broker and its representatives with an estimated grant date fair value of approximately $449,000 which has been recorded as a reduction in the carrying value of the Convertible Notes. The Company also has a note outstanding to the Stern Trust in the amount of $662,000 that earns interest at 10% per annum, which at the election of the Stern Trust can be paid in shares of common stock at a conversion price of $6.00 (the “Stern Note”). Theodore Stern, the former Trustee of the Stern Trust was formerly a director of the Company. The maturity date of the Stern Note was previously February 29, 2022 and the Stern Trust and the Company have mutually agreed to extend the due date to December 31, 2022. The Stern Trust shall have the right at is sole option to extend the maturity date for a further six months after December 31, 2022, by service of written notice upon the Borrower at any time on or before December 31, 2022. The following is a summary of the convertible notes payable outstanding as of September 30, 2022 (unaudited): 10.0% convertible note due December 31, 2022 $ 662,000 9.75% convertible notes due March 31, 2025 9,126,224 less: Unamortized debt discount expense (226,337 ) Unamortized debt issuance expense (1,200,133 ) $ 8,361,754 Future maturities of convertible notes payable as of September 30, 2022: 2022 $ 662,000 2025 9,126,224 $ 9,788,224 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 7 – RELATED PARTY TRANSACTIONS Convertible Notes Payable During the nine months ended September 30, 2022, two Directors, an affiliate of one of such Directors and one Executive Officer invested in $1.2 million of the Convertible Notes issued. See Note 6. In connection with the payment of interest on the Convertible Notes, 20,761 shares were issued to two Directors and an affiliate of one of the Directors. Issuance of Common Stock Two Directors and one Executive Officer invested $0.2 million in the common stock offering in the nine months ended September 30, 2022. See Note 8. Executive Officers On April 25, 2022, Stuart Stoller indicated his intention to resign as Chief Financial Officer of the Company in connection with his planned retirement. The resignation and retirement had an effective date of June 17, 2022 at which time Annie Pham was appointed Chief Financial Officer in his place. In connection with his retirement, the Board of Director’s approved the vesting of approximately 122,222 stock options which were unvested as of June 17, 2022. Additionally, the Board of Directors approved a consulting arrangement for Mr. Stoller to provide transitional services. On April 25, 2022, Ms. Pham and the Company entered an Offer Letter pursuant to which Ms. Pham agreed to serve as Chief Financial Officer commencing June 20, 2022. Ms. Pham receives an annual salary of $275,000. The Company agreed to provide a bonus of 40% of the base salary (pro rated for 2022) based on achievement of performance milestones, calculated and payable in accordance with the corporate milestones approved by the Board for the year 2022. For subsequent fiscal years the bonus shall be subject to performance targets to be mutually agreed with the Compensation Committee of the Board. In addition, Ms. Pham received a signing bonus in the amount of $25,000, which is fully refundable to the Company if Ms. Pham leaves her employment voluntarily or is terminated for cause prior to the first anniversary of the commencement of employment. Upon commencing employment, Ms. Pham was granted an option to acquire 350,000 shares of common stock at an exercise price of $2.41 and an exercise period of ten years subject to certain performance vesting requirements |
Stockholder's Equity
Stockholder's Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholder's Equity [Abstract] | |
STOCKHOLDER’S EQUITY | NOTE 8 STOCKHOLDER’S EQUITY Common Stock During the nine months ended September 30, 2022, shares of common stock were issued as a result of the following transactions: ● On March 18 and March 21, 2022, the Company entered into Subscription Agreements (the “Subscription Agreements”) with an accredited investor and certain members of authID’s management team (the “PIPE Investors”), and, pursuant to the Subscription Agreements, sold to the PIPE Investors a total of 1,063,514 shares of our common stock at prices of $3.03 per share for an outside investor and $3.70 per share for the management investors (the “PIPE”). The aggregate gross proceeds from the PIPE are approximately $3.3 million. ● The Company issued total of 28,496 shares of our common stock to the Note Investors as an additional origination fee. Additionally, the Company issued 191,579 shares of common stock for approximately $474,000 of interest owed from the effective date of the Convertible Notes until September 30, 2022. On March 21, 2022, the Company entered into a Facility Agreement with a current shareholder and noteholder of the Company, pursuant to which the shareholder agreed to provide the Company a $10.0 million unsecured standby letter of credit facility. Pursuant to the Credit Facility, the Company paid a facility commitment fee of 100,000 shares of our common stock with a fair market value of $3.03 per share upon the effective date of the Credit Facility. ● Certain warrant, stock option and convertible note holders exercised their respective warrants and stock options and conversion right and were issued approximately 236,805 shares of our common stock. During the nine months ended September 30, 2021, shares of common stock were issued as a result of the following transactions: ● On August 26, 2021, the Company completed the Offering of 1,642,856 shares of its common stock at a public offering price of $7.00 per share, including 214,285 shares sold upon full exercise of the underwriter’s option to purchase additional shares, for gross proceeds of approximately $11.5 million, before deducting underwriting discounts and offering expenses. ● In the first quarter of 2021, convertible notes totaling $120,000 and a portion of their accrued interest at the option of the noteholders were converted into approximately 33,000 shares of common stock of the Company. ● Additionally, during the three and nine months ended September 30, 2021, the Company received conversion notices from (i) the Stern Trust converting the principal amount, repayment premium and interest in the amount of approximately $3.5 million payable under the Restated Stern Note into approximately 561,000 shares of common stock, (ii) the 8% Note Investors converting principal and interest in the amount of approximately $0.4 million into approximately 180,000 shares of common stock and (iii) the 2020 Note Investors converting principal, repayment premium and interest in the amount of approximately $2.5 million into approximately 398,000 shares of common stock. The Stern Trust is owed approximately $0.7 million in interest under the Restated Stern Note, which has not been converted and remains outstanding. As a result, a total of approximately $6.4 million of Company indebtedness was converted and the Company issued approximately 1,138,000 shares of common stock in the aggregate. ● Certain warrant and stock option holders exercised their respective warrants and stock options by means of the cashless exercise feature and were issued approximately 549,000 common shares of the Company. Warrants The following is a summary of the Company’s warrant activity for the nine months ended September 30, 2022: Number of Weighted Weighted Outstanding at December 31, 2021 1,403,610 $ 4.61 3.0 years Granted 142,690 $ 3.70 5.0 years Exercised/cancelled (278,612 ) $ 4.13 0.1 years Outstanding at September 30, 2022 1,267,688 $ 4.61 3.1 years Stock Options The Company determined the grant date fair value of options granted for the nine months ended September 30, 2022, using the Black Scholes Method and the following assumptions: Expected volatility 123-127 % Expected term 5 years Risk free rate 2.14-3.75 % Dividend rate 0.00 % Activity related to stock options for the nine months ended September 30, 2022, is summarized as follows: Number of Weighted Weighted Aggregate Outstanding as of December 31, 2021 8,910,994 $ 4.50 7.5 $ 67,488,214 Granted 1,351,337 $ 2.37 10.0 - Exercised (281,031 ) $ 3.28 8.8 - Forfeited/cancelled (86,113 ) $ 6.63 7.9 - Outstanding as of September 30, 2022 9,895,187 $ 6.07 6.5 $ 2,516,245 Exercisable as of September 30, 2022 5,274,760 $ 5.65 4.4 $ 2,250,119 The following table summarizes stock option information as of September 30, 2022: Exercise Price Outstanding Contractual Life Exercisable $.03 - $4.00 4,636,149 5.5 3,095,020 $4.01- $7.00 151,667 3.8 151,667 $7.01 - $10.00 3,416,135 8.6 808,907 $10.01 - $15.97 1,691,236 5.2 1,219,166 9,895,187 6.5 5,274,760 During the nine months ended September 30, 2022, the Company recognized approximately $6,727,000 of stock option based compensation expense of which approximately $2,214,000 relates to market condition-based awards of directors and officers. As of September 30, 2022, there was approximately $11,835,000 of unrecognized compensation costs related to stock options outstanding that will be expensed through 2026. |
Discontinued Operations and Ass
Discontinued Operations and Assets Held for Sale | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Assets Held for Sale [Abstract] | |
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | NOTE 9 – DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE The Board of Directors of authID considers it in the best interests of the Company to focus its business activities on providing biometric authentication products and services by means of our proprietary Verified platform. Accordingly, on May 4, 2022, the Board approved a plan to exit from certain non-core activities comprising the MultiPay correspondent bank, payments services in Colombia and the Cards Plus cards manufacturing and printing business in South Africa. Cards Plus business in South Africa The financial statements of Cards Plus are classified as a discontinued operation and an asset held for sale, as all required classification criteria under appropriate accounting standards were met as of June 30, 2022. On August 29, 2022, the Company completed the sale of Cards Plus for a price of $300,000 of which $150,000 was received and the remaining balance of $150,000 recorded in other current asset is expected to be received within one year, less $3,272 in costs to sell (net), and recognized a loss of $188,247 from the transaction. The following table summarizes the assets and liabilities of the Cards Plus sale and the consideration received (unaudited): Amount Carrying value of net assets sold: Cash $ 299,505 Accounts receivable 61,879 Inventory 231,955 Other current assets 1,490 Total current assets 594,829 Property and equipment 21,127 Total assets 615,956 Accounts payable 76,094 Accrued expenses 43,728 Deferred revenue 11,159 Total current liabilities 130,981 Net assets sold $ 484,975 Sale Consideration on disposition of net assets: Proceeds $ 300,000 Legal fee (5,511 ) Write off net payable with CP 2,239 Net Consideration 296,728 Net loss on sale of a discontinued operation $ (188,247 ) MultiPay business in Colombia The Company is exiting the MultiPay business in Colombia in an orderly fashion, honoring our obligations to employees, customers and under applicable laws and regulations. We maintain our customer support and operations team in Bogota, which performs essential functions to support the global operations of our Verified product. As of September 30, 2022, all impacted employees left the Company. The Company also paid to each employee their severance packages under MultiPay’s retention plan and obligations under the appropriate statutes. As of September 30, 2022, MultiPay is working with a major customer to implement a transition plan to provide an essential service for certain bill pay services which will likely result in the sale of the Company’s proprietary software as well as the assumptions of certain expenses. The Company expects to incur costs associated with the proposed exit of the MultiPay business which include approximately $203,000 for payment to employees and consultants including statutory obligations and certain contingent retention bonuses of which $113,000 was already paid during the quarter ended September 30, 2022 and the remaining balance of $90,000 is in accrual; and approximately $41,000 for accelerated amortization (non-cash) for certain technology licenses. MultiPay has accelerated the depreciation of certain assets with the effective date of the announcement to reflect the estimated remaining useful life. The operations of Cards Plus and MultiPay for the three and nine months ended September 30, 2022 and September 30, 2021 on a consolidated basis are below (unaudited): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Discontinued Operations Total Revenues, net $ 446,643 $ 359,000 $ 1,468,199 $ 1,230,949 Operating Expenses: Cost of sales 145,205 121,184 665,269 492,412 General and administrative 276,866 472,336 1,003,003 1,107,961 Impairment loss - - 143,698 - Depreciation and amortization (6,749 ) 30,286 33,025 75,270 Total operating expenses 415,322 623,806 1,844,995 1,675,643 Income (Loss) from operations 31,321 (264,806 ) (376,796 ) (444,694 ) Other Income (Expense): Other income 12,792 1,851 20,821 15,113 Interest expense, net - (1,144 ) (364 ) (3,781 ) Other income, net 12,792 707 20,457 11,332 Income (Loss) before income taxes 44,113 (264,099 ) (356,339 ) (433,362 ) Income tax expense (468 ) (1,119 ) (7,046 ) (3,714 ) Income (Loss) from discontinued operations 43,645 (265,218 ) (363,385 ) (437,076 ) Loss from sale of discontinued operations (188,247 ) - (188,247 ) - Total loss from discontinued operations $ (144,602 ) $ (265,218 ) $ (551,632 ) $ (437,076 ) Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cards Plus Total Revenues, net $ 380,372 $ 276,335 $ 1,263,672 $ 955,770 Operating Expenses: Cost of sales 145,205 121,184 665,269 492,412 General and administrative 21,539 156,341 412,243 443,318 Impairment loss - - 143,698 - Depreciation and amortization (1,482 ) 23,160 24,415 58,393 Total operating expenses 165,262 300,685 1,245,625 994,123 Income (loss) from operations 215,110 (24,350 ) 18,047 (38,353 ) Other Income (Expense): Other income 2,103 1,848 8,919 5,299 Interest expense, net - (1,144 ) (364 ) (3,781 ) Other income, net 2,103 704 8,555 1,518 Income (Loss) before income taxes 217,213 (23,646 ) 26,602 (36,835 ) Income tax expense - - (4,681 ) - Income (Loss) from discontinued operations 217,213 (23,646 ) 21,921 (36,835 ) Loss from sale of discontinued operations (188,247 ) - (188,247 ) - Total income (loss) from discontinued operations $ 28,966 $ (23,646 ) $ (166,326 ) $ (36,835 ) Three Months Ended Nine Months Ended 2022 2021 2022 2021 MultiPay Total Revenues, net $ 66,271 $ 82,665 $ 204,527 $ 275,179 Operating Expenses: General and administrative 255,327 315,995 590,760 664,643 Depreciation and amortization (5,267 ) 7,126 8,610 16,877 Total operating expenses 250,060 323,121 599,370 681,520 Loss from operations (183,789 ) (240,456 ) (394,843 ) (406,341 ) Other Income: Other income 10,689 3 11,902 9,814 Other income 10,689 3 11,902 9,814 Loss before income taxes (173,100 ) (240,453 ) (382,941 ) (396,527 ) Income tax expense (468 ) (1,119 ) (2,365 ) (3,714 ) Loss from discontinued operations $ (173,568 ) $ (241,572 ) $ (385,306 ) $ (400,241 ) As a result of meeting the discontinued operations/assets held for sale criteria for Cards Plus and the MultiPay operations, the assets and liabilities have been reclassified as assets held for sale as of the respective balance sheet date as follows: September 30, December 31, (unaudited) Discontinued Operations Current Assets: Cash $ 11,342 $ 270,707 Accounts receivable, net 70,070 110,977 Inventory - 153,149 Other current assets - 94,919 Current assets held for sale 81,412 629,752 Noncurrent Assets: Property and equipment, net 28,857 93,132 Intangible assets - 153,004 Other assets - 66,695 Noncurrent assets held for sale 28,857 312,831 Total assets held for sale $ 110,269 $ 942,583 Current Liabilities: Accounts payable and accrued expenses $ 100,368 $ 235,348 Deferred revenue - 47,823 Notes payable obligation, current portion - 1,579 Capital lease obligation, current portion - 10,582 Total liabilities held for sale $ 100,368 $ 295,332 September 30, December 31, (unaudited) Cards Plus Current Assets: Cash $ - $ 182,518 Accounts receivable, net - 88,235 Inventory - 153,149 Other current assets - 52,678 Current assets held for sale - 476,580 Noncurrent Assets: Property and equipment, net - 24,619 Intangible assets - 153,004 Noncurrent assets held for sale - 177,623 Total assets held for sale $ - $ 654,203 Current Liabilities: Accounts payable and accrued expenses $ - $ 122,725 Deferred revenue - 47,823 Notes payable obligation, current portion - 1,579 Capital lease obligation, current portion - 10,582 Total liabilities held for sale $ - $ 182,709 September 30, December 31 (unaudited) MultiPay Current Assets: Cash $ 11,342 $ 88,189 Accounts receivable, net 70,070 22,742 Other current assets - 42,241 Current assets held for sale 81,412 153,172 Noncurrent Assets: Property and equipment, net 28,857 68,513 Other assets - 66,695 Noncurrent assets held for sale 28,857 135,208 Total assets held for sale $ 110,269 $ 288,380 Current Liabilities: Accounts payable and accrued expenses 100,368 112,623 Total liabilities held for sale $ 100,368 $ 112,623 As a result of meeting the discontinued operations/assets held for sale criteria for Cards Plus and the MultiPay operations, the cash flow activity related to discontinued operations is presented separately on the statement of cash flows as summarized below (unaudited): Nine Months Ended 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (363,385 ) $ (437,076 ) Adjustments to reconcile net loss with cash flows from operations: Depreciation and amortization expense 42,364 83,122 Impairment of intangible assets 143,701 - Changes in operating assets and liabilities: Accounts receivable (14,288 ) 427,034 Net investment in direct financing lease - (7,257 ) Other current assets 186,370 81,418 Inventory (78,806 ) 47,480 Accounts payable and accrued expenses (16,092 ) (228,912 ) Deferred revenue (36,663 ) (47,494 ) Adjustments relating to discontinued operations 226,586 355,391 Net Cash flows from discontinued operations $ (136,799 ) $ (81,685 ) Notes to Financial Statements – Discontinued Operations Inventories Inventory of plastic/ID cards, digital printing material, which are held by Cards Plus Pty Ltd., are at the lower of cost (using the average method) or market. The Plastic/ID cards and digital printing material are used to provide plastic loyalty ID and other types of cards. Inventories as of December 31, 2021, consist of cards inventory. As of December 31, 2021, the Company recorded an inventory valuation allowance of approximately $20,000 to reflect net realizable value of the cards inventory. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period. Inventories decreased to zero as the Company completed the sale of Cards Plus business on August 29, 2022. Revenue Recognition Cards Plus – The Company recognizes revenue for the design and production of cards at the point in time when products are shipped, or services have been performed due to the short-term nature of the contracts. Additionally, the cards produced by the Company have no alternative use and the Company has an enforceable right to payment for work performed should the contract be cancelled. As of December 31, 2021, Cards Plus had approximately $48,000 of contract liability from payments received in advance that will be earned in future periods. Contract liability decreased to zero as the Company completed the sale of Cards Plus business on August 29, 2022. MultiPay recognizes revenue for variable fees generated for payment processing solutions that are earned on a usage fee over time based on monthly transaction volumes or on a monthly flat fee rate. Additionally, MultiPay also sells certain equipment from time to time for which revenue is recognized upon delivery to the customer. Revenue related to direct financing leases is outside the scope of Topic 606 and is recognized over the term of the lease using the effective interest method. Lease Obligation Cards Plus 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 was amortized on a straight-line basis over its lease term including the last payment (61 payments) and ownership transferred to the Company. The lease was fully paid off. Impairment loss During the three and nine months ended September 30, 2022, Cards Plus recorded an impairment loss of zero and approximately $143,000, respectively associated with its intangible assets. Leases In October 2021, MultiPay entered into a one-year lease for approximately $2,900 per month in Bogota, Colombia. MultiPay terminated the lease as of September 30, 2022. Cards Plus leased space for its operations in South Africa. The facility was rented on a month-to-month basis with monthly rent of approximately $8,000 through August 29, 2022 as the Company completed the sale of Cards Plus business. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – 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 The Company rented office space in Long Beach, New York at a monthly cost of $2,500. The agreement was month to month and was terminated on July 31, 2022. The agreement was between the Company and Bridgeworks LLC, an entity principally owned by Mr. Beck, a former CEO and Board Member along with his family. In July 2022, the Company signed a new lease agreement for one year and moved its headquarters to Denver, Colorado. The office monthly lease cost approximates $1,500 per month. For the nine months ended September 30, 2022, lease expense was approximately $55,000 inclusive of short-term leases of which $25,000 was for continuing operations and $30,000 was for discontinued operations. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of calculation of diluted loss per share | Security 2022 2021 Convertible notes payable 2,590,547 117,529 Warrants 1,267,688 1,413,611 Stock options 9,895,187 9,322,153 13,753,422 10,853,293 |
Other Current Assets and Othe_2
Other Current Assets and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Current Assets and Other Assets [Abstract] | |
Schedule of other current assets | September 30, December 31, Prepaid Insurance $ 378,014 $ 126,042 Unamortized working capital facility fees 199,156 - Prepaid Third Party Services 281,587 215,326 Other 150,566 161,353 $ 1,009,323 $ 502,721 |
Schedule of other assets | September 30, December 31, Unamortized working capital facility fees $ 298,734 $ - Other 1,438 2,501 $ 300,172 $ 2,501 |
Intangible Assets, Net (Other_2
Intangible Assets, Net (Other than Goodwill) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets, Net (Other than Goodwill) [Abstract] | |
Schedule of intangible assets, net | Acquired and Patents Total Useful Lives 5 Years 10 years Carrying Value at December 31, 2021 $ 2,238,881 $ 140,570 $ 2,379,451 Additions - 6,311 6,311 Amortization (629,511 ) (12,108 ) (641,619 ) Carrying Value at September 30, 2022 $ 1,609,370 $ 134,773 $ 1,744,143 Acquired and Patents Total Cost $ 4,476,271 $ 164,614 $ 4,640,885 Accumulated amortization (2,866,901 ) (29,841 ) (2,896,742 ) Carrying Value at September 30, 2022 $ 1,609,370 $ 134,773 $ 1,744,143 |
Schedule of future expected amortization of intangible assets | Fiscal Year Ending December 31, Remainder of 2022 $ 213,928 2023 804,722 2024 580,408 2025 63,792 2026 16,456 2027 16,456 Thereafter 48,381 $ 1,744,143 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | September 30, December 31, Trade payables $ 586,902 $ 548,087 Accrued interest 83,203 33,533 Accrued payroll and related obligations 627,881 783,144 Other accrued expenses 709,645 413,328 Total $ 2,007,631 $ 1,778,092 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes Payable [Abstract] | |
Schedule of the convertible notes payable outstanding | 10.0% convertible note due December 31, 2022 $ 662,000 9.75% convertible notes due March 31, 2025 9,126,224 less: Unamortized debt discount expense (226,337 ) Unamortized debt issuance expense (1,200,133 ) $ 8,361,754 |
Schedule of future maturities of convertible notes payable | 2022 $ 662,000 2025 9,126,224 $ 9,788,224 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of warrant activity | Number of Weighted Weighted Outstanding at December 31, 2021 1,403,610 $ 4.61 3.0 years Granted 142,690 $ 3.70 5.0 years Exercised/cancelled (278,612 ) $ 4.13 0.1 years Outstanding at September 30, 2022 1,267,688 $ 4.61 3.1 years |
Schedule of grant date fair value of options granted | Expected volatility 123-127 % Expected term 5 years Risk free rate 2.14-3.75 % Dividend rate 0.00 % |
Schedule of related to stock options | Number of Weighted Weighted Aggregate Outstanding as of December 31, 2021 8,910,994 $ 4.50 7.5 $ 67,488,214 Granted 1,351,337 $ 2.37 10.0 - Exercised (281,031 ) $ 3.28 8.8 - Forfeited/cancelled (86,113 ) $ 6.63 7.9 - Outstanding as of September 30, 2022 9,895,187 $ 6.07 6.5 $ 2,516,245 Exercisable as of September 30, 2022 5,274,760 $ 5.65 4.4 $ 2,250,119 |
Schedule of stock option | Exercise Price Outstanding Contractual Life Exercisable $.03 - $4.00 4,636,149 5.5 3,095,020 $4.01- $7.00 151,667 3.8 151,667 $7.01 - $10.00 3,416,135 8.6 808,907 $10.01 - $15.97 1,691,236 5.2 1,219,166 9,895,187 6.5 5,274,760 |
Discontinued Operations and A_2
Discontinued Operations and Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Assets Held for Sale [Abstract] | |
Schedule of assets and liabilities of card plus sale and consideration received | Amount Carrying value of net assets sold: Cash $ 299,505 Accounts receivable 61,879 Inventory 231,955 Other current assets 1,490 Total current assets 594,829 Property and equipment 21,127 Total assets 615,956 Accounts payable 76,094 Accrued expenses 43,728 Deferred revenue 11,159 Total current liabilities 130,981 Net assets sold $ 484,975 Sale Consideration on disposition of net assets: Proceeds $ 300,000 Legal fee (5,511 ) Write off net payable with CP 2,239 Net Consideration 296,728 Net loss on sale of a discontinued operation $ (188,247 ) |
Schedule of operations of cards plus and multipay | Three Months Ended Nine Months Ended 2022 2021 2022 2021 Discontinued Operations Total Revenues, net $ 446,643 $ 359,000 $ 1,468,199 $ 1,230,949 Operating Expenses: Cost of sales 145,205 121,184 665,269 492,412 General and administrative 276,866 472,336 1,003,003 1,107,961 Impairment loss - - 143,698 - Depreciation and amortization (6,749 ) 30,286 33,025 75,270 Total operating expenses 415,322 623,806 1,844,995 1,675,643 Income (Loss) from operations 31,321 (264,806 ) (376,796 ) (444,694 ) Other Income (Expense): Other income 12,792 1,851 20,821 15,113 Interest expense, net - (1,144 ) (364 ) (3,781 ) Other income, net 12,792 707 20,457 11,332 Income (Loss) before income taxes 44,113 (264,099 ) (356,339 ) (433,362 ) Income tax expense (468 ) (1,119 ) (7,046 ) (3,714 ) Income (Loss) from discontinued operations 43,645 (265,218 ) (363,385 ) (437,076 ) Loss from sale of discontinued operations (188,247 ) - (188,247 ) - Total loss from discontinued operations $ (144,602 ) $ (265,218 ) $ (551,632 ) $ (437,076 ) Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cards Plus Total Revenues, net $ 380,372 $ 276,335 $ 1,263,672 $ 955,770 Operating Expenses: Cost of sales 145,205 121,184 665,269 492,412 General and administrative 21,539 156,341 412,243 443,318 Impairment loss - - 143,698 - Depreciation and amortization (1,482 ) 23,160 24,415 58,393 Total operating expenses 165,262 300,685 1,245,625 994,123 Income (loss) from operations 215,110 (24,350 ) 18,047 (38,353 ) Other Income (Expense): Other income 2,103 1,848 8,919 5,299 Interest expense, net - (1,144 ) (364 ) (3,781 ) Other income, net 2,103 704 8,555 1,518 Income (Loss) before income taxes 217,213 (23,646 ) 26,602 (36,835 ) Income tax expense - - (4,681 ) - Income (Loss) from discontinued operations 217,213 (23,646 ) 21,921 (36,835 ) Loss from sale of discontinued operations (188,247 ) - (188,247 ) - Total income (loss) from discontinued operations $ 28,966 $ (23,646 ) $ (166,326 ) $ (36,835 ) Three Months Ended Nine Months Ended 2022 2021 2022 2021 MultiPay Total Revenues, net $ 66,271 $ 82,665 $ 204,527 $ 275,179 Operating Expenses: General and administrative 255,327 315,995 590,760 664,643 Depreciation and amortization (5,267 ) 7,126 8,610 16,877 Total operating expenses 250,060 323,121 599,370 681,520 Loss from operations (183,789 ) (240,456 ) (394,843 ) (406,341 ) Other Income: Other income 10,689 3 11,902 9,814 Other income 10,689 3 11,902 9,814 Loss before income taxes (173,100 ) (240,453 ) (382,941 ) (396,527 ) Income tax expense (468 ) (1,119 ) (2,365 ) (3,714 ) Loss from discontinued operations $ (173,568 ) $ (241,572 ) $ (385,306 ) $ (400,241 ) |
Schedule of operations assets and liabilities have been reclassified | September 30, December 31, (unaudited) Discontinued Operations Current Assets: Cash $ 11,342 $ 270,707 Accounts receivable, net 70,070 110,977 Inventory - 153,149 Other current assets - 94,919 Current assets held for sale 81,412 629,752 Noncurrent Assets: Property and equipment, net 28,857 93,132 Intangible assets - 153,004 Other assets - 66,695 Noncurrent assets held for sale 28,857 312,831 Total assets held for sale $ 110,269 $ 942,583 Current Liabilities: Accounts payable and accrued expenses $ 100,368 $ 235,348 Deferred revenue - 47,823 Notes payable obligation, current portion - 1,579 Capital lease obligation, current portion - 10,582 Total liabilities held for sale $ 100,368 $ 295,332 September 30, December 31, (unaudited) Cards Plus Current Assets: Cash $ - $ 182,518 Accounts receivable, net - 88,235 Inventory - 153,149 Other current assets - 52,678 Current assets held for sale - 476,580 Noncurrent Assets: Property and equipment, net - 24,619 Intangible assets - 153,004 Noncurrent assets held for sale - 177,623 Total assets held for sale $ - $ 654,203 Current Liabilities: Accounts payable and accrued expenses $ - $ 122,725 Deferred revenue - 47,823 Notes payable obligation, current portion - 1,579 Capital lease obligation, current portion - 10,582 Total liabilities held for sale $ - $ 182,709 September 30, December 31 (unaudited) MultiPay Current Assets: Cash $ 11,342 $ 88,189 Accounts receivable, net 70,070 22,742 Other current assets - 42,241 Current assets held for sale 81,412 153,172 Noncurrent Assets: Property and equipment, net 28,857 68,513 Other assets - 66,695 Noncurrent assets held for sale 28,857 135,208 Total assets held for sale $ 110,269 $ 288,380 Current Liabilities: Accounts payable and accrued expenses 100,368 112,623 Total liabilities held for sale $ 100,368 $ 112,623 |
Schedule of cash flow from operating activities related to discontinued operations | Nine Months Ended 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (363,385 ) $ (437,076 ) Adjustments to reconcile net loss with cash flows from operations: Depreciation and amortization expense 42,364 83,122 Impairment of intangible assets 143,701 - Changes in operating assets and liabilities: Accounts receivable (14,288 ) 427,034 Net investment in direct financing lease - (7,257 ) Other current assets 186,370 81,418 Inventory (78,806 ) 47,480 Accounts payable and accrued expenses (16,092 ) (228,912 ) Deferred revenue (36,663 ) (47,494 ) Adjustments relating to discontinued operations 226,586 355,391 Net Cash flows from discontinued operations $ (136,799 ) $ (81,685 ) |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Accumulated deficit | $ 134,000,000 | $ 134,000,000 | |
Earned revenue from continuing operations | 30,000 | 300,000 | |
Loss from continuing operations | 4,100,000 | 11,400,000 | |
Stock based compensation expenses | 2,200,000 | 6,700,000 | |
Contract liability | 97,000 | 97,000 | $ 199,000 |
Deferred revenue contract liability | $ 97,000 | $ 97,000 |
Basis of Presentation (Detail_2
Basis of Presentation (Details) - Schedule of calculation of diluted loss per share - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares | 13,753,422 | 10,853,293 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares | 1,267,688 | 1,413,611 |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares | 9,895,187 | 9,322,153 |
Convertible notes payable [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares | 2,590,547 | 117,529 |
Other Current Assets and Othe_3
Other Current Assets and Other Assets (Details) - Schedule of other current assets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Other Current Assets [Abstract] | ||
Prepaid Insurance | $ 378,014 | $ 126,042 |
Unamortized working capital facility fees | 199,156 | |
Prepaid Third Party Services | 281,587 | 215,326 |
Other | 150,566 | 161,353 |
Total other current assets | $ 1,009,323 | $ 502,721 |
Other Current Assets and Othe_4
Other Current Assets and Other Assets (Details) - Schedule of other assets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Other Assets [Abstract] | ||
Unamortized working capital facility fees | $ 298,734 | |
Other | 1,438 | 2,501 |
Other assets | $ 300,172 | $ 2,501 |
Intangible Assets, Net (Other_3
Intangible Assets, Net (Other than Goodwill) (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Intangible Assets, Net (Other than Goodwill) [Abstract] | ||
Amortization expense | $ 642,000 | $ 894,000 |
Intangible Assets, Net (Other_4
Intangible Assets, Net (Other than Goodwill) (Details) - Schedule of intangible assets, net | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | |
Carrying Value at December 31, 2021 | $ 2,379,451 |
Additions | 6,311 |
Amortization | (641,619) |
Carrying Value at September 30, 2022 | 1,744,143 |
Cost | 4,640,885 |
Accumulated amortization | (2,896,742) |
Carrying Value at September 30, 2022 | $ 1,744,143 |
Acquired and Developed Software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | 5 years |
Carrying Value at December 31, 2021 | $ 2,238,881 |
Additions | |
Amortization | (629,511) |
Carrying Value at September 30, 2022 | 1,609,370 |
Cost | 4,476,271 |
Accumulated amortization | (2,866,901) |
Carrying Value at September 30, 2022 | $ 1,609,370 |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | 10 years |
Carrying Value at December 31, 2021 | $ 140,570 |
Additions | 6,311 |
Amortization | (12,108) |
Carrying Value at September 30, 2022 | 134,773 |
Cost | 164,614 |
Accumulated amortization | (29,841) |
Carrying Value at September 30, 2022 | $ 134,773 |
Intangible Assets, Net (Other_5
Intangible Assets, Net (Other than Goodwill) (Details) - Schedule of future expected amortization of intangible assets | Sep. 30, 2022 USD ($) |
Schedule Of Future Expected Amortization Of Intangible Assets [Abstract] | |
Remainder of 2022 | $ 213,928 |
2023 | 804,722 |
2024 | 580,408 |
2025 | 63,792 |
2026 | 16,456 |
2027 | 16,456 |
Thereafter | 48,381 |
Total | $ 1,744,143 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Accounts Payable and Accrued Expenses [Abstract] | ||
Trade payables | $ 586,902 | $ 548,087 |
Accrued interest | 83,203 | 33,533 |
Accrued payroll and related obligations | 627,881 | 783,144 |
Other | 709,645 | 413,328 |
Total | $ 2,007,631 | $ 1,778,092 |
Working Capital Faciltiy (Detai
Working Capital Faciltiy (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
Mar. 21, 2022 | Sep. 30, 2022 | |
Working Capital Faciltiy [Abstract] | ||
Unsecured line of credit facility | $ 10,000,000 | |
Shares of our common stock (in Shares) | 100,000 | |
Outstanding borrowings interest rate | 15% | |
Credit facility of maximum amount | $ 500,000 | |
Drawdown cash | 5,000,000 | |
Unamortized deferred debt expense | 498,000 | |
Other current assets | $ 199,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Mar. 21, 2022 | Mar. 31, 2021 | Sep. 30, 2022 | Aug. 26, 2021 | |
Convertible Notes Payable [Abstract] | |||||
Aggregate initial principal amount | $ 50,000 | $ 9,200,000 | $ 50,000 | ||
Conversion price per share (in Dollars per share) | $ 3.7 | ||||
Aggregate cash origination fee | $ 200,000 | ||||
Shares of our common stock (in Shares) | 28,500 | 214,285 | |||
Convertible notes interest rate | 9.75% | ||||
Convertible notes maturity date | Mar. 31, 2025 | ||||
Accrued interest | $ 406 | $ 406 | |||
Shares of common stock (in Shares) | 13,649 | 13,649 | |||
Shares of common stock (in Shares) | 74,683 | 33,000 | 191,579 | ||
Interest related to convertible notes | $ 223,000 | $ 474,000 | |||
Common stock warrants (in Shares) | 142,690 | 142,690 | |||
Fair value | $ 449,000 | $ 449,000 | |||
Outstanding amount | $ 662,000 | ||||
Interest rate | 10% | ||||
Conversion price (in Dollars per share) | $ 6 | $ 6 | |||
Maturity date, description | The maturity date of the Stern Note was previously February 29, 2022 and the Stern Trust and the Company have mutually agreed to extend the due date to December 31, 2022. |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details) - Schedule of the convertible notes payable outstanding | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
less: | |
Unamortized debt discount expense | $ (226,337) |
Unamortized debt issuance expense | (1,200,133) |
Total | 8,361,754 |
10.0% convertible note due December 31, 2022 [Member] | |
Debt Instrument [Line Items] | |
Convertible notes payable | 662,000 |
9.75% convertible notes due March 31, 2025 [Member] | |
Debt Instrument [Line Items] | |
Convertible notes payable | $ 9,126,224 |
Convertible Notes Payable (De_3
Convertible Notes Payable (Details) - Schedule of future maturities of convertible notes payable | Sep. 30, 2022 USD ($) |
Schedule Of Future Maturities Of Convertible Notes Payable [Abstract] | |
2022 | $ 662,000 |
2025 | 9,126,224 |
Total | $ 9,788,224 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Jun. 17, 2022 | |
Related Party Transactions (Details) [Line Items] | ||
Shares issued of convertible notes (in Shares) | 236,805 | |
Annual salary receive | $ 275,000 | |
Provide bonus | 40% | |
Bonus amount | $ 25,000 | |
Board of Director [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Stock option of vesting | $ 122,222 | |
Executive Retention Agreement [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Received amount | $ 350,000 | |
Mr Szoke [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Exercise price per share (in Dollars per share) | $ 2.41 | |
Exercise period of vesting | 10 years | |
Two Directors [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Cash invested | $ 1,200,000 | |
Common stock offering | $ 200,000 | |
Convertible Notes Payable Issued [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Shares issued of convertible notes (in Shares) | 20,761 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Mar. 21, 2022 | Mar. 18, 2022 | Aug. 26, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Stockholder's Equity (Details) [Line Items] | |||||||||
Common stock of shares issued (in Shares) | 1,063,514 | 1,063,514 | 24,914,418 | 24,914,418 | 23,294,024 | ||||
Common stock price per share (in Dollars per share) | $ 3.7 | $ 3.03 | |||||||
Gross proceeds | $ 3,300,000 | $ 3,300,000 | |||||||
Common stock, interest owned | $ 474,000 | ||||||||
Credit facility amount | $ 10,000,000 | ||||||||
Conversion of common shares issued (in Shares) | 236,805 | ||||||||
Convertible notes totaling | $ 1,642,856 | $ 6,400,000 | $ 6,400,000 | ||||||
Converted common stock shares (in Shares) | 7 | 1,138,000 | 1,138,000 | ||||||
Exercise shares (in Shares) | 28,500 | 214,285 | |||||||
Gross proceeds | $ 11,500,000 | ||||||||
Convertible Notes Payable, Current | $ 120,000 | ||||||||
Shares of common stock (in Shares) | 74,683 | 33,000 | 191,579 | ||||||
Received conversion notices description | the Company received conversion notices from (i) the Stern Trust converting the principal amount, repayment premium and interest in the amount of approximately $3.5 million payable under the Restated Stern Note into approximately 561,000 shares of common stock, (ii) the 8% Note Investors converting principal and interest in the amount of approximately $0.4 million into approximately 180,000 shares of common stock and (iii) the 2020 Note Investors converting principal, repayment premium and interest in the amount of approximately $2.5 million into approximately 398,000 shares of common stock. | the Company received conversion notices from (i) the Stern Trust converting the principal amount, repayment premium and interest in the amount of approximately $3.5 million payable under the Restated Stern Note into approximately 561,000 shares of common stock, (ii) the 8% Note Investors converting principal and interest in the amount of approximately $0.4 million into approximately 180,000 shares of common stock and (iii) the 2020 Note Investors converting principal, repayment premium and interest in the amount of approximately $2.5 million into approximately 398,000 shares of common stock. | |||||||
Exercise feature issued common shares | $ 549,000 | ||||||||
Stock option based compensation expense | 6,727,000 | ||||||||
Performance-based awards of directors and officers | $ 2,214,000 | 2,214,000 | |||||||
Unrecognized compensation costs | $ 11,835,000 | $ 11,835,000 | |||||||
Common Stock [Member] | |||||||||
Stockholder's Equity (Details) [Line Items] | |||||||||
Common stock of shares issued (in Shares) | 191,579 | 191,579 | |||||||
Common stock of fair market value (in Dollars per share) | $ 3.03 | ||||||||
Note Investors [Member] | |||||||||
Stockholder's Equity (Details) [Line Items] | |||||||||
Common stock of shares issued (in Shares) | 28,496 | 28,496 | |||||||
Restated Stern Note [Member] | |||||||||
Stockholder's Equity (Details) [Line Items] | |||||||||
Interest receivable | $ 700,000 | $ 700,000 | |||||||
Credit Facility [Member] | |||||||||
Stockholder's Equity (Details) [Line Items] | |||||||||
Common stock of shares issued (in Shares) | 100,000 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - Schedule of warrant activity | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Schedule Of Warrant Activity Abstract | |
Number of Shares, Outstanding, balance at beginning | shares | 1,403,610 |
Weighted Average Exercise Price, Outstanding, balance at beginning | $ / shares | $ 4.61 |
Weighted Average Remaining Life, Outstanding, balance at beginning | 3 years |
Number of Shares, Granted | shares | 142,690 |
Weighted Average Exercise Price, Granted | $ / shares | $ 3.7 |
Weighted Average Remaining Life, Granted | 5 years |
Number of Shares, Exercised/cancelled | shares | (278,612) |
Weighted Average Exercise Price, Exercised/cancelled | $ / shares | $ 4.13 |
Weighted Average Remaining Life, Exercised/cancelled | 1 month 6 days |
Number of Shares, Outstanding, balance at ending | shares | 1,267,688 |
Weighted Average Exercise Price, Outstanding, balance at ending | $ / shares | $ 4.61 |
Weighted Average Remaining Life, Outstanding, balance at ending | 3 years 1 month 6 days |
Stockholder's Equity (Details_2
Stockholder's Equity (Details) - Schedule of grant date fair value of options granted | 9 Months Ended |
Sep. 30, 2022 | |
Stockholder's Equity (Details) - Schedule of grant date fair value of options granted [Line Items] | |
Expected term | 5 years |
Dividend rate | 0% |
Minimum [Member] | |
Stockholder's Equity (Details) - Schedule of grant date fair value of options granted [Line Items] | |
Expected volatility | 123% |
Risk free rate | 2.14% |
Maximum [Member] | |
Stockholder's Equity (Details) - Schedule of grant date fair value of options granted [Line Items] | |
Expected volatility | 127% |
Risk free rate | 3.75% |
Stockholder's Equity (Details_3
Stockholder's Equity (Details) - Schedule of related to stock options | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Schedule Of Related To Stock Options Abstract | |
Number of Shares, Outstanding at beginning | shares | 8,910,994 |
Weighted Average Exercise Price, Outstanding at beginning | $ / shares | $ 4.5 |
Weighted Average Contractual Term (Yrs.), Outstanding at beginning | 7 years 6 months |
Aggregate Intrinsic Value, Outstanding at beginning | $ | $ 67,488,214 |
Number of Shares, Granted | shares | 1,351,337 |
Weighted Average Exercise Price, Granted | $ / shares | $ 2.37 |
Weighted Average Contractual Term (Yrs.), Granted | 10 years |
Number of Shares Exercised | shares | (281,031) |
Weighted Average Exercise Price Exercised | $ / shares | $ 3.28 |
Weighted Average Contractual Term (Yrs.) Exercised | 8 years 9 months 18 days |
Number of Shares Forfeited/cancelled | shares | (86,113) |
Weighted Average Exercise Price Forfeited/cancelled | $ / shares | $ 6.63 |
Weighted Average Contractual Term (Yrs.) Forfeited/cancelled | 7 years 10 months 24 days |
Number of Shares, Outstanding at ending | shares | 9,895,187 |
Weighted Average Exercise Price, Outstanding at ending | $ / shares | $ 6.07 |
Weighted Average Contractual Term (Yrs.), Outstanding at ending | 6 years 6 months |
Aggregate Intrinsic Value, Outstanding at ending | $ | $ 2,516,245 |
Number of Shares, Exercisable at ending | shares | 5,274,760 |
Weighted Average Exercise Price, Exercisable at ending | $ / shares | $ 5.65 |
Weighted Average Contractual Term (Yrs.), Exercisable at ending | 4 years 4 months 24 days |
Aggregate Intrinsic Value, Exercisable at ending | $ | $ 2,250,119 |
Stockholder's Equity (Details_4
Stockholder's Equity (Details) - Schedule of stock option | 9 Months Ended |
Sep. 30, 2022 shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 9,895,187 |
Contractual Life (Yrs.) | 6 years 6 months |
Exercisable | 5,274,760 |
Exercise Price $.03 - $4.00 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 4,636,149 |
Contractual Life (Yrs.) | 5 years 6 months |
Exercisable | 3,095,020 |
Exercise Price $4.01 - $7.00 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 151,667 |
Contractual Life (Yrs.) | 3 years 9 months 18 days |
Exercisable | 151,667 |
Exercise Price $7.01 - $10.00 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 3,416,135 |
Contractual Life (Yrs.) | 8 years 7 months 6 days |
Exercisable | 808,907 |
Exercise Price $10.01 - $15.93 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 1,691,236 |
Contractual Life (Yrs.) | 5 years 2 months 12 days |
Exercisable | 1,219,166 |
Discontinued Operations and A_3
Discontinued Operations and Assets Held for Sale (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 29, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Oct. 30, 2021 | |
Discontinued Operations and Assets Held for Sale [Abstract] | |||||
Description on sale of card plus | On August 29, 2022, the Company completed the sale of Cards Plus for a price of $300,000 of which $150,000 was received and the remaining balance of $150,000 recorded in other current asset is expected to be received within one year, less $3,272 in costs to sell (net), and recognized a loss of $188,247 from the transaction. | ||||
Description of employee and consultants payment | The Company expects to incur costs associated with the proposed exit of the MultiPay business which include approximately $203,000 for payment to employees and consultants including statutory obligations and certain contingent retention bonuses of which $113,000 was already paid during the quarter ended September 30, 2022 and the remaining balance of $90,000 is in accrual; and approximately $41,000 for accelerated amortization (non-cash) for certain technology licenses. | ||||
Reflect net realizable value | $ 20,000 | ||||
Contract liability | $ 48,000 | ||||
Impairment loss | $ 0 | $ 143,000 | |||
One-year lease amount | $ 2,900 | ||||
Monthly rent | $ 8,000 |
Discontinued Operations and A_4
Discontinued Operations and Assets Held for Sale (Details) - Schedule of assets and liabilities of card plus sale and consideration received - Cards Plus [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Carrying value of net assets sold: | |
Cash | $ 299,505 |
Accounts receivable | 61,879 |
Inventory | 231,955 |
Other current assets | 1,490 |
Total current assets | 594,829 |
Property and equipment | 21,127 |
Total assets | 615,956 |
Accounts payable | 76,094 |
Accrued expenses | 43,728 |
Deferred revenue | 11,159 |
Total current liabilities | 130,981 |
Net assets sold | 484,975 |
Proceeds | 300,000 |
Legal fee | (5,511) |
Write off net payable with CP | 2,239 |
Net Consideration | 296,728 |
Net loss on sale of a discontinued operation | $ (188,247) |
Discontinued Operations and A_5
Discontinued Operations and Assets Held for Sale (Details) - Schedule of operations of cards plus and multipay - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Discontinued Operations [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Discontinued Operations Total Revenues, net | $ 446,643 | $ 359,000 | $ 1,468,199 | $ 1,230,949 |
Operating Expenses: | ||||
Cost of sales | 145,205 | 121,184 | 665,269 | 492,412 |
General and administrative | 276,866 | 472,336 | 1,003,003 | 1,107,961 |
Impairment loss | 143,698 | |||
Depreciation and amortization | (6,749) | 30,286 | 33,025 | 75,270 |
Total operating expenses | 415,322 | 623,806 | 1,844,995 | 1,675,643 |
Income (Loss) from operations | 31,321 | (264,806) | (376,796) | (444,694) |
Other Income (Expense): | ||||
Other income | 12,792 | 1,851 | 20,821 | 15,113 |
Interest expense, net | (1,144) | (364) | (3,781) | |
Other income, net | 12,792 | 707 | 20,457 | 11,332 |
Income (Loss) before income taxes | 44,113 | (264,099) | (356,339) | (433,362) |
Income tax expense | (468) | (1,119) | (7,046) | (3,714) |
Income (Loss) from discontinued operations | 43,645 | (265,218) | (363,385) | (437,076) |
Loss from sale of discontinued operations | (188,247) | (188,247) | ||
Total loss from discontinued operations | (144,602) | (265,218) | (551,632) | (437,076) |
Cards Plus [Member] | ||||
Operating Expenses: | ||||
Cost of sales | 145,205 | 121,184 | 665,269 | 492,412 |
General and administrative | 21,539 | 156,341 | 412,243 | 443,318 |
Impairment loss | 143,698 | |||
Depreciation and amortization | (1,482) | 23,160 | 24,415 | 58,393 |
Total operating expenses | 165,262 | 300,685 | 1,245,625 | 994,123 |
Income (Loss) from operations | 215,110 | (24,350) | 18,047 | (38,353) |
Other Income (Expense): | ||||
Other income | 2,103 | 1,848 | 8,919 | 5,299 |
Interest expense, net | (1,144) | (364) | (3,781) | |
Other income, net | 2,103 | 704 | 8,555 | 1,518 |
Income (Loss) before income taxes | 217,213 | (23,646) | 26,602 | (36,835) |
Income tax expense | (4,681) | |||
Income (Loss) from discontinued operations | 217,213 | (23,646) | 21,921 | (36,835) |
Loss from sale of discontinued operations | (188,247) | (188,247) | ||
Total income (loss) from discontinued operations | 28,966 | (23,646) | (166,326) | (36,835) |
Total Revenues, net | 380,372 | 276,335 | 1,263,672 | 955,770 |
MultiPay [Member] | ||||
Operating Expenses: | ||||
General and administrative | 255,327 | 315,995 | 590,760 | 664,643 |
Depreciation and amortization | (5,267) | 7,126 | 8,610 | 16,877 |
Total operating expenses | 250,060 | 323,121 | 599,370 | 681,520 |
Income (Loss) from operations | (183,789) | (240,456) | (394,843) | (406,341) |
Other Income (Expense): | ||||
Other income | 10,689 | 3 | 11,902 | 9,814 |
Other income | 10,689 | 3 | 11,902 | 9,814 |
Income (Loss) before income taxes | (173,100) | (240,453) | (382,941) | (396,527) |
Income tax expense | (468) | (1,119) | (2,365) | (3,714) |
Income (Loss) from discontinued operations | (173,568) | (241,572) | (385,306) | (400,241) |
Total Revenues, net | $ 66,271 | $ 82,665 | $ 204,527 | $ 275,179 |
Discontinued Operations and A_6
Discontinued Operations and Assets Held for Sale (Details) - Schedule of operations assets and liabilities have been reclassified - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Discontinued Operations [Member] | ||
Discontinued Operations Current Assets: | ||
Cash | $ 11,342 | $ 270,707 |
Accounts receivable, net | 70,070 | 110,977 |
Inventory | 153,149 | |
Other current assets | 94,919 | |
Current assets held for sale | 81,412 | 629,752 |
Noncurrent Assets: | ||
Property and equipment, net | 28,857 | 93,132 |
Intangible assets | 153,004 | |
Other assets | 66,695 | |
Noncurrent assets held for sale | 28,857 | 312,831 |
Total assets held for sale | 110,269 | 942,583 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 100,368 | 235,348 |
Deferred revenue | 47,823 | |
Notes payable obligation, current portion | 1,579 | |
Capital lease obligation, current portion | 10,582 | |
Total liabilities held for sale | 100,368 | 295,332 |
Cards Plus [Member] | ||
Discontinued Operations Current Assets: | ||
Cash | 182,518 | |
Accounts receivable, net | 88,235 | |
Inventory | 153,149 | |
Other current assets | 52,678 | |
Current assets held for sale | 476,580 | |
Noncurrent Assets: | ||
Property and equipment, net | 24,619 | |
Intangible assets | 153,004 | |
Noncurrent assets held for sale | 177,623 | |
Total assets held for sale | 654,203 | |
Current Liabilities: | ||
Accounts payable and accrued expenses | 122,725 | |
Deferred revenue | 47,823 | |
Notes payable obligation, current portion | 1,579 | |
Capital lease obligation, current portion | 10,582 | |
Total liabilities held for sale | 182,709 | |
MultiPay [Member] | ||
Discontinued Operations Current Assets: | ||
Cash | 11,342 | 88,189 |
Accounts receivable, net | 70,070 | 22,742 |
Other current assets | 42,241 | |
Current assets held for sale | 81,412 | 153,172 |
Noncurrent Assets: | ||
Property and equipment, net | 28,857 | 68,513 |
Other assets | 66,695 | |
Noncurrent assets held for sale | 28,857 | 135,208 |
Total assets held for sale | 110,269 | 288,380 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 100,368 | 112,623 |
Total liabilities held for sale | $ 100,368 | $ 112,623 |
Discontinued Operations and A_7
Discontinued Operations and Assets Held for Sale (Details) - Schedule of cash flow from operating activities related to discontinued operations - Discontinued Operations [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (363,385) | $ (437,076) |
Adjustments to reconcile net loss with cash flows from operations: | ||
Depreciation and amortization expense | 42,364 | 83,122 |
Impairment of intangible assets | 143,701 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (14,288) | 427,034 |
Net investment in direct financing lease | (7,257) | |
Other current assets | 186,370 | 81,418 |
Inventory | (78,806) | 47,480 |
Accounts payable and accrued expenses | (16,092) | (228,912) |
Deferred revenue | (36,663) | (47,494) |
Adjustments relating to discontinued operations | 226,586 | 355,391 |
Net Cash flows from discontinued operations | $ (136,799) | $ (81,685) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Commitments and Contingencies (Details) [Line Items] | |
Monthly rental payments | $ 1,500 |
Lease expenses | 55,000 |
Short term lease expense | 25,000 |
Amount of discontinued operations | 30,000 |
Long Beach, New York [Member] | |
Commitments and Contingencies (Details) [Line Items] | |
Monthly rental payments | $ 2,500 |