Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 22, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Transition Report | false | ||
Entity File Number | 000-549995 | ||
Entity Registrant Name | I-ON DIGITAL CORP. | ||
Entity Central Index Key | 0001580490 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-3031328 | ||
Entity Address, Address Line One | 15, Teheran-ro 10-gil, Gangnam-gu | ||
Entity Address, City or Town | Seoul | ||
Entity Address, Country | KR | ||
Entity Address, Postal Zip Code | 06234 | ||
City Area Code | 82-2 | ||
Local Phone Number | 3430-1200 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | IONI | ||
Security Exchange Name | NONE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2.8 | ||
Entity Common Stock, Shares Outstanding | 35,030,339 | ||
Auditor Firm ID | 6651 | ||
Auditor Name | Paris, Kreit & Chiu CPA LLP /s/ | ||
Auditor Location | New York, NY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 3,705,945 | $ 4,521,328 |
Restricted cash | 1,602,699 | 1,746,324 |
Short-term financial instruments | 716,154 | 771,140 |
Short-term loan receivable | 126,529 | 137,868 |
Accounts receivables, net of allowance for doubtful accounts $645,335 and $619,336, respectively | 5,299,951 | 3,006,084 |
Deferred tax assets - current | 410,259 | 274,291 |
Prepaid expenses and other current assets | 579,173 | 1,099,493 |
Total current assets | 12,440,710 | 11,556,528 |
Non-current assets: | ||
Investments | 93,168 | 101,517 |
Property and equipment, net | 105,445 | 118,402 |
Intangible assets, net | 438,781 | 232,400 |
Deposits | 737,909 | 395,585 |
Deferred tax assets - non current | 590,433 | 755,795 |
Total non-current assets | 1,965,736 | 1,603,699 |
Total Assets | 14,406,446 | 13,160,227 |
Current liabilities: | ||
Accounts payable | 320,251 | 626,919 |
Accrued expenses and other | 2,546,062 | 1,835,463 |
Value added tax payable | 202,857 | 233,477 |
Income tax payable | 79,106 | 31,668 |
Short-term loan payable | 337,410 | 505,515 |
Current portion of long term debt | 0 | 206,765 |
Government grants outstanding | 30,431 | 424,439 |
Total current liabilities | 3,516,117 | 3,864,246 |
Long term debt, net of current portion | 0 | 0 |
Total liabilities | 3,516,117 | 3,864,246 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Common stock - $0.0001 par value; authorized 100,000,000 shares; 35,030,339 shares issued and outstanding at December 30, 2021 and December 31, 2020 | 3,503 | 3,503 |
Treasury stock | (709,478) | (709,478) |
Additional paid-in-capital | 3,713,370 | 3,713,370 |
Accumulated other comprehensive loss | (726,500) | 289,933 |
Retained earnings | 7,681,661 | 5,517,785 |
Total company stockholders' equity | 9,962,556 | 8,815,113 |
Preferred stock (I-ON Korea and eformworks) - $0.4380 par value; authorized 2,000,000 shares; 600,742 shares and 157,142 shares issued and outstanding at December 31, 2021 and December 31, 2020 | 1,093,569 | 475,036 |
Non-controlling interests | (165,796) | 5,832 |
Total stockholders' equity | 10,890,329 | 9,295,981 |
Total Liabilities and Stockholders' Equity | $ 14,406,446 | $ 13,160,227 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Accounts receivables, allowance for doubtful accounts | $ 645,335 | $ 619,336 |
Stockholders' Equity | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 35,030,339 | 35,030,339 |
Common stock, shares outstanding (in shares) | 35,030,339 | 35,030,339 |
Preferred stock, par value (in dollars per share) | $ 0.4380 | $ 0.4380 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, issued (in shares) | 600,742 | 157,142 |
Preferred stock, outstanding (in shares) | 600,742 | 157,142 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Income and Comprehensive Income [Abstract] | ||
Net sales | $ 16,199,710 | $ 10,471,502 |
Cost of goods sold | 10,834,719 | 6,078,030 |
Gross profit | 5,364,991 | 4,393,472 |
Operating expense: | ||
Research and development | 1,500,217 | 999,209 |
General and administrative | 2,058,481 | 1,697,377 |
Total operating expense | 3,558,698 | 2,696,586 |
Income from operations | 1,806,293 | 1,696,886 |
Other income (expense): | ||
Interest income | 45,521 | 45,405 |
Foreign currency transaction loss | (28,037) | (1,865) |
Government subsidized income | 13,961 | 15,487 |
Miscellaneous expense, net | (139,213) | (24,957) |
Interest expense | (13,057) | (23,507) |
Total other income (expense), net | (120,825) | 10,563 |
Income before provision for income taxes, and non-controlling interest | 1,685,468 | 1,707,449 |
Provision for (benefit from) income tax | (306,780) | 86,570 |
Net income before non-controlling interest | 1,992,248 | 1,620,879 |
Non-controlling interest income (loss) | (171,628) | 431 |
Net income | 2,163,876 | 1,620,448 |
Comprehensive income statement: | ||
Net income | 1,992,248 | 1,620,879 |
Foreign currency translation gain (loss) | (1,016,433) | 549,893 |
Total comprehensive income | $ 975,815 | $ 2,170,772 |
Earnings per Share, Basic [Abstract] | ||
Net income (loss) before non-controlling interest (in dollars per share) | $ 0.06 | $ 0.05 |
Non-controlling interest (in dollars per share) | 0 | 0 |
Earnings per share to stockholders (in dollars per share) | 0.06 | 0.05 |
Earnings per share - Diluted [Abstract] | ||
Net income (loss) before non-controlling interest (in dollars per share) | 0.06 | 0.05 |
Non-controlling interest (in dollars per share) | 0 | 0 |
Earnings per share to stockholders (in dollars per share) | $ 0.06 | $ 0.05 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 35,030,339 | 35,030,339 |
Diluted (in shares) | 35,030,339 | 35,030,339 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Company Stockholders' Equity [Member] | Non-Controlling Interest [Member] | Preferred Stock [Member] | Total |
Balance at Dec. 31, 2019 | $ 3,603 | $ 3,646,740 | $ 3,897,337 | $ (709,478) | $ (259,960) | $ 6,578,242 | $ 5,401 | $ 475,036 | $ 7,058,679 |
Balance (in shares) at Dec. 31, 2019 | 35,030,339 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Reclassification of issuance of common stock in connection with equity purchase agreement | $ (100) | 100 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Reclassification of issuance of common stock in connection with equity purchase agreement (in shares) | 0 | ||||||||
Foreign currency translation | $ 0 | 0 | 0 | 0 | 549,893 | 549,893 | 0 | 0 | 549,893 |
Stock compensation expense | 0 | 66,530 | 0 | 0 | 0 | 66,530 | 0 | 0 | 66,530 |
Net income | 0 | 0 | 1,620,448 | 0 | 0 | 1,620,448 | 431 | 0 | 1,620,879 |
Balance at Dec. 31, 2020 | $ 3,503 | 3,713,370 | 5,517,785 | (709,478) | 289,933 | 8,815,113 | 5,832 | 475,036 | 9,295,981 |
Balance (in shares) at Dec. 31, 2020 | 35,030,339 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Foreign currency translation | $ 0 | 0 | 0 | 0 | (1,016,433) | (1,016,433) | 0 | 0 | (1,016,433) |
Issuance of preferred stock | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 618,533 | 618,533 |
Net income | 0 | 0 | 2,163,876 | 0 | 0 | 2,163,876 | (171,628) | 0 | 1,992,248 |
Balance at Dec. 31, 2021 | $ 3,503 | $ 3,713,370 | $ 7,681,661 | $ (709,478) | $ (726,500) | $ 9,962,556 | $ (165,796) | $ 1,093,569 | $ 10,890,329 |
Balance (in shares) at Dec. 31, 2021 | 35,030,339 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 2,163,876 | $ 1,620,448 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Non-controlling interest | (171,628) | 431 |
Depreciation - fixed assets | 70,056 | 111,806 |
Amortization of intangible assets | 38,444 | 29,179 |
Stock options expense | 0 | 66,530 |
Changes in operating assets and liabilities: | ||
Account receivable, net | (2,493,442) | 148,057 |
Prepaid expenses and other current assets | 445,325 | 21,924 |
Deposit | (388,315) | (17,108) |
Deferred taxes | (57,310) | 38,351 |
Account payable | (403,136) | 431,649 |
Accrued expenses and other | 892,480 | 18,960 |
Value added tax payable | (11,828) | 109,578 |
Income tax payable | 51,839 | 21,173 |
Net cash provided by operating activities | 136,361 | 2,600,978 |
Cash flows from investing activities: | ||
Purchases of investments | (8,738) | (49,998) |
Purchases of property and equipment | (66,721) | (21,060) |
Purchases of intangible assets | (272,033) | (54,219) |
Payments received from short-term loan receivable | 0 | 136,117 |
Loans provided under short-term loans | 0 | (17,842) |
Net cash used in investing activities | (347,492) | (7,002) |
Cash flows from financing activities: | ||
Principal payments on long-term debt | (196,571) | (190,636) |
Payments on short-term borrowings | (131,071) | 0 |
Net receipt (payment) of government grants | (371,990) | 391,330 |
Proceeds from issuance of preferred stock | 618,533 | 0 |
Net cash provided by (used in) financing activities | (81,099) | 200,694 |
Effect of foreign currency translation on cash and cash equivalents | (666,778) | 494,198 |
Net increase (decrease) in cash and cash equivalents | (959,008) | 3,288,868 |
Cash and cash equivalents including restricted cash, beginning of year | 6,267,652 | 2,978,784 |
Cash and cash equivalents including restricted cash, end of year | 5,308,644 | 6,267,652 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 12,891 | 23,507 |
Taxes paid | $ 39,418 | $ 26,689 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Operations [Abstract] | |
Organization and Operations | Note 1. Organization and Operations I-ON Digital Corp. (“the Company”) was incorporated on July 5, 1999, and is engaged in developing and supplying computerized system. The corporate headquarter is located at 15 Teheran-ro 10-gil Gangnam-gu Seoul, South Korea. The Company provides enterprise content management services to customers primarily in Korea, Japan and Indonesia, by developing industry-leading products such as ICS (web content management system), iDrive (e-document management system), LAMS (load aggregator’s management system), e.Form (mobile contract system), IDAS (digital asset management system) and ICE (content delivery system). I-ON, Ltd is the Japanese subsidiary of the Company incorporated in 2002. The total assets of I-ON, Ltd is approximately $603,438. The Company has 99.5% ownership of I-ON, Ltd. On or about August 1, 2021, the Company’s wholly-owned subsidiary I-On Communications, Ltd. (“Communication”) formed a new subsidiary named eformworks Co., Ltd. (“e.Form”) into which Communications moved its electronic signature operations. Communications contributed KRW 300,000,000 to e.Form to subscribe for its founders shares and own 57.5% of the outstanding capital stock of e.Form |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s Principles of Consolidation and Presentation The consolidated financial statements include the accounts of I-ON Digital Corp. and its 99.5% owned subsidiary, I-ON, Ltd and its 57.5% owned subsidiary, eformworks. All intercompany accounts, transactions, and profits have been eliminated upon consolidation. The accompanying consolidated financial statements and the notes hereto are reported in US Dollars. The consolidated financial statements were prepared and presented in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. Non-controlling interests represent the portion of earnings that is not within the parent Company’s control. These amounts are required to be reported as equity instead of as a liability on the consolidated balance sheet. ASC requires net income or loss from non-controlling interests to be shown separately on the consolidated statements of operations. The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. The Company is also required to consolidate any variable interest entities (VIEs), of which it is the primary beneficiary, as defined. Based on the Company’s analysis pursuant to ASC 810-10-25, Consolidations, the Company does not have any VIEs that need to be consolidated at this time. When the Company does not have a controlling interest in an entity, but exerts a significant influence over the entity, the Company would apply the equity method of accounting. Use of Estimates in the Preparation of Financial Statements The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the consolidated financial statements. The more significant estimates and assumptions by management include the recoverability of intangibles. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Foreign Currency Transaction and Translation The Company’s principal country of operations is Korea. The financial position and results of operations of the Company are determined using the local currency, Korean Won (“KRW”), as the functional currency. ● I-ON, Ltd (Japanese subsidiary) – The financial position and results of operations of I-ON, Ltd, the Japanese subsidiary of the Company, are initially recorded using its local currency, Japanese Yen (“JPY”). Assets and liabilities denominated in foreign currency are translated to the functional currency at the functional currency rate of exchange at the balance sheet date. The results of operations denominated in foreign currency are translated at the average rate of exchange during the reporting period. All differences are reflected in accumulated other comprehensive income. December 31, December 31, Average Year Ended December 31, Currency 2021 2020 2021 2020 Japanese Yen to Korean Won JPY10.30 JPY 10.54 JPY10.41 JPY11.05 Korean Won to US Dollar ($) KRW1,185.50 KRW 1,088.00 KRW1,144.42 KRW 1,180.05 Source (Seoul Money Brokerage Services) ● Consolidation – Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rated prevailing at the balance sheet date. The results of operations are translated from KRW to US Dollar at the weighted average rate of exchange during the reporting period. The registered equity capital denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. All translation adjustments resulting from the translation of the financial statements into the reporting currency, US Dollar, are dealt with as a component of accumulated other comprehensive income. Translation adjustments were a net loss of $1,016,433 and net gain of $549,893 for the years ended December 31, 2021 and 2020, respectively. Segment Reporting FASB ASC 280, Segment Reporting The Company generates revenues from two geographic areas, consisting of Korea and Japan. The following enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated financial statements: 2021 2020 Korea: Current assets $ 11,837,539 $ 10,998,742 Non-current assets 1,965,469 1,603,402 Current liabilities 3,130,606 3,535,680 Non-current liabilities - - Net Sales 14,638,896 8,872,013 Japan: Current assets $ 603,171 $ 557,786 Non-current assets 267 297 Current liabilities 385,511 328,566 Non-current liabilities - - Net Sales 1,560,814 1,599,489 Revenue Recognition Revenues are recognized when control of the promised services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company’s revenue consists of services provided, royalties and commissions. These revenue sources are as follows: ● Royalty – the Company receives a fixed amount of royalties from a company in Japan for providing rights to sell the Company’s products in Japanese market. Revenue is recognized over the contract and service period and when collectability is reasonably assured. ● License Solution & Services – the Company recognizes revenue on installation of the web-content management software, services provided for installation, and customization. ● Customizing Services – the Company recognizes revenue from processing transactions between businesses and their customers. Revenue is recognized over the contract and service period and when service for the contract is completed. ● Maintenance – the Company recognizes revenue over the contract term based on percentage-of-completion method. Investments The Company classifies its investment securities as available-for-sale securities in accordance with FASB ASC 320, Investments The Company’s investment securities include privately-held companies where quoted market prices are not available and the cost method, combined with other intrinsic information, is used to assess the fair value of the investment. If the carrying value is below the fair value of an investment at the end of any period, the investment is considered for impairment. Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded, and a new cost basis in the investment is established. Cash and Cash Equivalents The Company considers all money market funds and highly liquid financial instruments with maturities of three months or less when acquired to be cash equivalents. Restricted Cash Restricted cash represents cash deposits which are restricted by the financial institutions for the loans the financial institutions have with the Company’s chief executive officer. The loans with the financial institutions amounted to approximately $1,433,000 and $1,572,000 at December 31, 2021 and 2020, respectively, and expires on various days during 2021 and 2022, unless extended. The loans, bearing various interest rates, are guaranteed by the Company and the restricted cash deposits of the Company are provided to the financial institutions as collateral. The Company’s chief executive officer pays interest from the loans without any default at December 31, 2021 and 2020. The amount of restricted cash as of December 31, 2021 and 2020 was $1,602,699 and $1,746,324, respectively. This arrangement could be considered as a violation of Section 402 of the Sarbanes-Oxley Act of 2002 amended the Securities Exchange Act of 1934 to prohibit U.S. and foreign companies with securities traded in the United States from making, or arranging for third parties to make, nearly any type of personal loan to their directors and executive officers. Violations of the Sarbanes-Oxley loan prohibition are subject to the civil and criminal penalties applicable to violations of the Exchange Act. Short-Term Financial Instruments Short-term financial instruments represent interest-bearing certificates of deposits with original maturities between three months to year. Accounts Receivable Accounts receivables are recorded at the invoiced amount and do not bear interest. Amounts collected on accounts receivables are included in net cash provided by operating activities in the consolidated cash flow statements. The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the trade accounts receivable. Management primarily determines the allowance based on the aging of accounts receivable balances, historical write-off experience, customer concentrations, customer credit worthiness and current industry and economic trends. The Company’s provision for uncollectible receivables are included in selling, marketing, general and administrative expense in the consolidated statements of income and comprehensive income. At December 31, 2021 and 2020, allowance for doubtful accounts was approximately $645,000 and $620,000, respectively. The Company does not have any off-balance sheet exposure related to its customers. Property and Equipment Property and equipment are recorded at cost. Depreciation of property and equipment is computed using the double balance method, based on the estimated useful lives as follows: Facility equipment 4 years Automobile 4 years Office equipment 4 years Repairs and maintenance are expensed as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts, and any gain or loss is included in operations. The Company is working on a government research project and many other technical innovation projects. The Company receives government grants that it uses to offset the amount of assets acquired or expenses incurred. Research and Development Research and development costs are expensed as incurred. Research and development costs include travel, payroll, and other general expenses specific to research and development activities. Research and development cost for the years ended December 31, 2021 and 2020 were approximately $1,500,217 and $999,209, respectively. Intangible Assets When the Company acquires an intangible asset, it is recorded at acquisition cost (the purchase price of the intangible asset and the costs directly related to the preparation of the asset for its intended purpose). The cost of an intangible asset acquired in a business combination is measured at the fair value at the acquisition date according to the accounting standards for business combinations. Intangible assets with a finite life are amortized using the straight-line method over their estimated useful lives. The estimated useful lives of the respective asset categories are as follows: Development costs 3 years Intangible assets excluding development costs 10 years Other Intangible assets 3 to 5 years Severance and Retirement Benefits In accordance with the Korean Labor Standard Law, employees and directors with at least one year of service are entitled to receive a lump-sum payment upon termination of their employment, based on their length of service and rate of pay at the time of termination. Accrued severance benefits represent an amount which would be payable assuming all eligible employees and directors were to terminate their employment as of the balance sheet date. The annual severance benefits expense charged to operations is calculated based upon the net change in the accrued severance benefits payable at the balance sheet date based on the guidance of FASB ASC 960, Accounting – Defined Benefit Pension Plans The Company’s retirement pension plan is a defined contribution plan, and the Company pays the defined contribution regardless of the result of the operations of the Company. The Company recognizes the contributions to be paid in the current accounting period as retirement benefits expense. The amounts recognized as costs related to defined contribution plans were $ and $390,234 for the years ended December 31, 2021 and 2020, respectively. Compensated Absences Employees of the Company are entitled to be compensated for absences depending on job classification, length of service, and other factors. At December 31, 2021 and 2020, the amounts were deemed to be immaterial. Impairment analysis for long-lived assets and intangible assets The Company’s long-lived assets and intangible assets (consisting of property and equipment and purchased intangible assets) are reviewed for impairment in accordance with the guidance of the FASB ASC 360, Property, Plant, and Equipment Earnings Per Share FASB ASC Topic 260, Earnings Per Share Fair Value Measurements The Company follows FASB ASC Topic 820, Fair Value Measurements ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for financial instruments measured at fair value on a recurring basis. The three levels of inputs are as follows: Level 1 Quoted prices in active markets for identical assets or liabilities that the Company has an ability to access as of the measurement date. Level 2 Inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the same term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments include cash and cash equivalents, restricted cash, short-term financial instruments, short-term loans, accounts receivable, investments, accounts payables and debt. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us. The Company has financial instruments classified within the fair value hierarchy, which consists of the following: ● Investments in privately-held companies, where quoted market prices are not available, accounted for as available-for-sale securities, classified as Level 3 within the fair value hierarchy, and are recorded as an asset on the consolidated balance sheet The following table summarize the Company’s fair value measurements by level at December 31, 2021 for the assets measured at fair value on a recurring basis: December 31, 2021 Level 1 Level 2 Level 3 Available-for-sale securities $ - $ - $ 93,168 Long-term Cash - - - Equity purchase put option - - - Fair value, at December 31, 2021 $ - $ - $ 93,168 The following table summarize the Company’s fair value measurements by level at December 31, 2020 for the assets measured at fair value on a recurring basis: December 31, 2020 Level 1 Level 2 Level 3 Available-for-sale securities $ - $ - $ 101,517 Long-term Cash - - - Equity purchase put option - - - Fair value, at December 31, 2020 $ - $ - $ 101,517 Income Taxes Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes. The Company follows FASB ASC 740, Income Taxes FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25 for the years ended December 31, 2021 and 2020. Contingencies Accounting guidance requires that the Company record an estimated loss from a loss contingency when information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the consolidated financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires significant judgment. Many of these legal matters can take years to resolve. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are cash and trade receivable arising from its normal business activities. The Company deposits its cash in high credit quality institutions. The Company performs ongoing credit evaluations to its customers and establishes allowances when appropriate. Cash and cash equivalents are maintained at various financial institutions located in Korea and Japan. The Company has never experienced any losses related to these balances. A dvertising Costs associated with advertising and promotions are expensed as incurred. Advertising expense amounted to $90,094 and $84,216 for the years ended December 31, 2021 and 2020, respectively. Employee Stock Based Compensation The Company accounts for its share-based compensation plan in accordance with FASB ASC 718, Stock Compensation Stock-based compensation issued to employees and members of our board of directors is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis. For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted any fluctuations in these calculations could have a material effect on the results presented in our consolidated statements of operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our consolidated financial statements. Non-controlling Interests Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Government Grants Government grants are not recognized unless there is reasonable assurance that the Company will comply with the grants’ conditions and that the grants will be received. Government borrowings, which are lower than the market interest rate, are regarded as government grants. The grant is measured from the difference between the fair values of the government borrowings computed using the market interest rate and the acquisition cost of the grant. Government grants whose primary condition is that the Company purchase, construct or otherwise acquire long-term assets are deducted in calculating the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense. Government grants which are intended to compensate the Company for expenses incurred are recognized as other income in profit or loss over the periods in which the Company recognizes the related costs as expenses. There are government grants outstanding of $30,431 and $424,439 as of December 31, 2021 and 2020, respectively. Value Added Tax National Tax Service in Korea administered Value Added Tax under the Tax Reform Act of 1976 promulgated by the National Assembly. Value added tax is imposed on goods sold in or imported into Korea and on services provided within Korea. Value added tax in Korea is charged on an aggregated basis at a rate of 10% on the full price collected for the goods sold or for the taxable services provided. Value added tax paid were $538,944 and $538,533 for the years ended December 31, 2021 and 2020, respectively. Recent Accounting Pronouncement ● Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting Other recently issued accounting updates are not expected to have a material impact on the Company’s Interim Financial Statements. ● Fair Value Measurements In August 2018, the FASB amended "Fair Value Measurements" to modify the disclosure requirements related to fair value. The amendment removes requirements to disclose (1) the amount of and reasons for transfers between levels 1 and 2 of the fair value hierarchy, (2) our policy related to the timing of transfers between levels, and (3) the valuation processes used in level 3 measurements. It clarifies that, for investments measured at net asset value, disclosure of liquidation timing is only required if the investee has communicated the timing either to us or publicly. It also clarifies that the narrative disclosure of the effect of changes in level 3 inputs should be based on changes that could occur at the reporting date. The amendment adds a requirement to disclose the range and weighted average of significant unobservable inputs used in level 3 measurements. The guidance is effective for the Company with the Company’s quarterly filing for the period ended March 31, 2020 and the Company made the required disclosure changes in that filing and going forward. Adoption did not have an impact on the Company’s consolidated results of operations, consolidated financial position, and cash flows. ● Leases (ASU 2019-01) In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements, which removed the requirement for an entity to disclose in the interim periods after adoption, the effect of the change on income from continuing operations, net income, any other affected financial statement line item, and any affected per share amount. For lessors, the new leasing standard requires leases to be classified as a sales-type, direct financing or operating leases. These criteria focus on the transfer of control of the underlying lease asset. This standard and related update was effective for fiscal years beginning after December 15, 2018 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 3. Property and Equipment Property and equipment consist of the following: December 31, 2021 2020 Facilities $ 181,193 $ 197,430 Vehicles 39,055 42,555 Equipment 1,694,969 1,769,330 Government grants (39,752 ) (355,582 ) Total property and equipment 1,875,465 1,653,733 Less: accumulated depreciation (1,770,020 ) (1,535,331 ) Property and equipment, net $ 105,445 $ 118,402 Depreciation expense for December 31, 2021 and 2020 were $70,056 and As noted in Note 2, the government grants received is against the values of assets acquired or the expenses incurred. |
Investment
Investment | 12 Months Ended |
Dec. 31, 2021 | |
Investment [Abstract] | |
Investment | Note 4. Investment Available-for-sale securities The Company’s investments also include privately-held companies, where quoted market prices are not available, and the cost method, combined with other intrinsic information, is used to assess the fair value of the investment. The following table summarize the Company’s investment securities: Investment Percentage of Ownership December 31, 2021 December 31, 2020 Available-for-sale securities 4Grit Available-for-sale 2.50 % $ 42,180 $ 45,960 E-channel Available-for-sale 0.07 % $ 39,895 $ 43,470 KSFC Available-for-sale 0.11 % $ 11,093 $ 12,087 Total investment securities $ 93,168 $ 101,517 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 5. Intangible Assets Intangible assets consist of the following: 2021 2020 Patents $ 338,361 $ 325,842 Trademark 26,555 17,639 Start-Up Cost 1,291 1,406 Software 734,961 568,822 Government grants (168 ) (50,364 ) Total intangible assets 1,101,000 863,345 Less: Accumulated amortization $ (662,219 ) (630,945 ) Intangible assets, net $ 438,781 $ 232,400 Amortization expense for December 31, 2021 and 2020 were $38,444 and $29,179, respectively. Future amortization expense of the Company’s intangible assets at December 31, 2021 is expected to be as follows: Years ending December 31, 2022 $ 110,064 2023 78,500 2024 77,734 2025 76,580 2026 67,380 Thereafter 28,523 Total $ 438,781 As noted in Note 2, the government grants received is against the values of assets acquired or the expenses incurred. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2021 | |
Long-term Debt [Abstract] | |
Long-term Debt | Note 6. Long-term Debt Total long-term debt consisted of the following: 2021 2020 A note payable to a financial institution bearing interest at 2.81 2.54 - 206,765 Long-term debt $ - $ 206,765 Less: current portion - (206,765 ) Long-term debt, net of current portion $ - $ - |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies Royalty On February 15, 2006, the Company agreed to provide the rights to Ashisuto to sell the products in the Japanese market. Per the agreement, the contract period is automatically extended by 5 years up to 20 years. Total royalty amounts received for the years ended December 31, 2021 and 2020 were approximately $130,000 and $187,000, respectively, and it is included in revenues on the Consolidated Statements of Income and Comprehensive Income. Operating Leases The Company leases its office under non-cancelable operating leases that expire on dates through December 2022. The lease is automatically extended upon agreement of both parties. Future minimum rental payments under the non-cancelable operating leases as of December 31, 2022 are as follows: December 31, Amount 2022 146,799 Total $ 146,799 Rent expense for all operating leases were $146,799 and $131,689 for the years ended December 31, 2021 and 2020, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 8. Related Party Transactions The Company receives loan guarantees from the chief executive officer with regards to its long-term borrowing, and the Company’s restricted cash is provided as collateral to the Company’s chief executive officer’s loans. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 9. Earnings Per Share The Company calculates earnings per share in accordance with FASB ASC 260, Earnings Per Share The following table sets forth the computation of basic and diluted net income per common share: Years Ended December 31, 2021 2020 Net income before non-controlling interest $ 1,992,248 $ 1,620,879 Non-controlling interest (171,628 ) 431 Net income 2,163,876 1,620,448 Weighted-average shares of common stock outstanding: Basic 35,030,339 35,030,339 Dilutive effect of common stock equivalents arising from share option, excluding antidilutive effect from loss - - Dilutive shares 35,030,339 35,030,339 Earnings per share – Basic and diluted Net income before non-controlling interest $ 0.06 $ 0.05 Non-controlling interest $ 0.00 $ 0.00 Earnings per share to stockholders $ 0.06 $ 0.05 No non-vested share awards or non-vested share unit awards were antidilutive for the years ended December 31, 2021 and 2020. |
Stock Compensation
Stock Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Stock Compensation [Abstract] | |
Stock Compensation | Note 11. Stock Compensation The Company has a Stock Option Plan (“Plan”) that allows grants to officers and key employees shares of common stock. The options have vesting schedules of three years from the date of grant, and are exercisable within seven years from the end of the vesting period. Stock options granted and outstanding as of December 31, 2021 and 2020 may be exercised after one year from the date of the Company’s public listing. If the Company’s not publicly listed, these options will be cancelled. The Company recognized approximately $0 and $66,530 of stock-based compensation related to options granted to employees for the years ended December 31, 2021 and 2020, respectively. The fair value of each award to employees in 2021 is estimated on the date of grant using the Binomial option pricing model with the following weighted-average assumptions: expected life of approximately 6.25 years, risk-free interest rate of approximately 2.85%, expected volatility of 16.38% and no dividends during the expected life. Expected volatility is based on historical volatilities of public companies operating in the Company’s industry. The expected life of the options represents the period of time options are expected to be outstanding and is estimated considering vesting terms and employees’ historical exercise and post-vesting employment termination behavior. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company did not provide any new stock option grants in 2021. A summary of the status of the Company’s stock option plan is presented as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Live (In Years) Aggregate Intrinsic Value Outstanding, December 31, 2018 160,116 $ 1.63 9.18 $ 64,046 Granted - - Exercised - - Cancelled - - Outstanding, December 31, 2019 160,116 $ 1.63 8.18 $ 64,046 Granted - - Exercised - - Cancelled - - Outstanding, December 31, 2020 160,116 $ 1.63 7.18 $ - Granted - - Exercised - - Cancelled - - Outstanding, December 31, 2021 160,116 $ 1.63 6.18 $ - Options exercisable at December 31, 2021 91,044 $ - - $ - Vested and expected to vest at December 31, 2021 91,044 $ - - $ - As of December 31, 2021 and 2020, there was $0 of total unrecognized compensation expense related to nonvested share option awards granted. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes [Abstract] | |
Income Taxes | Note 10. Income Taxes Income taxes consist of the following: Current Deferred Total Year ended December 31, 2021 Federal $ - $ - $ - State - - - Foreign (390,654 ) 83,874 (306,780 ) Total income tax provision (benefit) $ (390,654 ) $ 83,874 $ (306,780 ) Year ended December 31, 2020 Federal $ - $ - $ - State - - - Foreign 48,847 37,723 86,570 Total income tax provision (benefit) $ 48,847 $ 37,723 $ 86,570 Current income tax expense is based on taxable income for foreign, federal and state tax reporting purposes. Deferred income tax expense is provided for certain income and expenses which are recognized in different periods for tax and financial reporting purposes. Deferred income tax assets and liabilities are computed annually for differences between the consolidated financial statements and tax basis of assets and liabilities that will result in taxable or deductible amount in the future based on enacted tax laws and rates applicable to the period in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized. The significant components of deferred income tax assets and liabilities are as follows: As of December 31, 2021 2020 Deferred income tax assets: Allowance for bad debt $ 169,754 $ 182,709 Government grants 97,885 18,687 Available-for-sale securities 7,625 8,308 Research and development tax credit 678,414 1,178,952 Net operating income (loss) 339,541 (426,081 ) Retirement benefits 73,056 78,993 Total deferred income tax assets 1,366,275 1,041,568 Less - valuation allowance (361,053) (11,482 ) Deferred tax assets, net of valuation allowance 1,005,222 1,030,086 Deferred income tax liabilities: Accounts receivable (3,872 ) - Available-for-sale securities (658 ) - Total deferred income tax liabilities (4,530 ) - Net deferred tax assets $ 1,000,692 $ 1,030,086 Current deferred tax assets: $ 410,259 $ 274,291 Non-current deferred tax assets $ 590,433 $ 755,795 The difference between the change in net deferred tax assets and the deferred income tax expenses is mainly due to remeasurement of deferred tax assets and liabilities reflecting currency exchange rates at the balance sheet dates. The related tax impact was recorded through other comprehensive income. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. In assessing the realization of gross deferred income tax assets, management considers whether it is more likely than not that some portion or all its deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The effective tax rates for the reporting periods are as follows: Years Ended December 31, 2021 2020 Tax expense (benefit) at statutory rate - 22 $ 370,803 $ 398,431 Allowance for bad debt 12,955 (17,331 ) Government grants (79,198) 13,698 Available-for-sale securities 683 36,006 Research and development tax credit 500,538 53,925 Net operating income (loss) (765,622 ) 516,631 Retirement benefits 5,937 (4,761 ) Accounts receivables (3,872 ) - Capital (658 ) - Tax credits (709,399 ) (921,511 ) Valuation allowance 361,053 11,482 Total income tax provision (benefit) $ (306,780 ) $ 86,570 Effective tax rate -18.20 % 5.07 % The Company adopted the guidance in ASC 740 for uncertain tax positions, which requires that realization of an uncertain income tax position must be more likely than not before it can be recognized in the financial statements. This guidance in ASC 740 further prescribes the benefits or liabilities to be recorded in the financial statements as the amounts are cumulatively more likely than not to be realized assuming a review by tax authorities having all relevant information and applying current conventions. The guidance also clarifies the financial statement classification of tax-related penalties and interest and sets forth new disclosure regarding unrecognized tax benefits or liabilities. Differences between the amounts recognized in the consolidated financial statements prior to the adoption of the guidance in ASC 740 for unrecognized tax benefits and the amounts reported after adoption would be accounted for as a cumulative-effect adjustment to the beginning balance of retained earnings. As of December 31, 2021 and 2020, the Company identified no material unrecognized tax benefits and does not expect material change within the next twelve-months. The Company’s policy is to recognize tax penalties and interest in tax expense, if any. The Company recorded tax deferred assets for its research & development tax credits in the amount of $678,414 and $1,178,952 as of December 31, 2021 and 2020, respectively. The tax credits are carried forward for five years. Tax years 2012 and forward are open to examination by the Korean National Tax Service (NTS). NTS conducted tax examination in 2012 and no penalties were charged to the Company. |
Non-Controlling Interest-Issued
Non-Controlling Interest-Issued of Preferred Stock by Subsidiaries | 12 Months Ended |
Dec. 31, 2021 | |
Non-Controlling Interest-Issued of Preferred Stock by Subsidiaries [Abstract] | |
Non-Controlling Interest-Issued of Preferred Stock by Subsidiaries | Note 12. Non-Controlling Interest-Issued of Preferred Stock by Subsidiaries On April 9, 2019, The Company’s subsidiary, I-ON Co., Ltd. (Korea) issued redeemable convertible preferred stock with proceeds of KRW 549,997,000 and issued 157,142 shares of preferred stock at a price of KRW 3,500 per share. The convertible preferred stock agreement contain provisions as follows: ● Voting rights – The preferred shareholder may have same voting rights as common stock shareholder (1:1) ● 2% annual dividend ● Liquidating rights ● Conversion rights to common stock o Call option by preferred shareholder – Preferred stock may be converted to common stock anytime at a fixed conversion price of KRW 3,500 o Call option by I-ON Digital – Should I-ON Digital exercise to redeem preferred stock, I-ON Digital is required to repurchase for KRW 3,500 per share and 7% annual interest compounded. The convertible preferred shares meet definition of equity instrument and contain a put option that is not outside the Company’s control and the conversion to common stock is at a fixed determinable share conversion price at KRW 3,500 per share. On November 22, 2021, the Company’s subsidiary, e.FormWorks Co., Ltd. (Korea) issued redeemable convertible preferred stock with proceeds of KRW 733,270,800 and issued 443,600 shares of preferred stock at a price of KRW 1,653 per share. The convertible preferred stock agreement contain provisions as follows: ● Voting rights – The preferred shareholder may have same voting rights as common stock shareholder (1:1) ● 1% annual dividend ● Liquidating rights ● Conversion rights to common stock o Call option by preferred shareholder – Preferred stock may be converted to common stock anytime at a fixed conversion price of KRW 1,653 o Call option by I-ON Digital – Should I-ON Digital exercise to redeem preferred stock, I-ON Digital is required to repurchase for KRW 1,653 per share and 6% annual interest compounded. The convertible preferred shares meet definition of equity instrument and contain a put option that is not outside the Company’s control and the conversion to common stock is at a fixed determinable share conversion price at KRW 1,653 per share. The Company accounted the issuance of preferred stock under ASC 810-10-45-23, Consolidation, and was accounted for as equity transaction as the parent’s ownership interest retains control of a subsidiary. The preferred stock issuance by a subsidiary to noncontrolling interest holders should be reflected as a noncontrolling interest in the financial statements of the parent at the amount of the cash proceeds received. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13. Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements are available to be issued. Any material events that occur between the balance sheet date and the date that the financial statements were available for issuance are disclosed as subsequent events, while the financial statements are adjusted to reflect any conditions that existed at the balance sheet date. Based upon this review, except as disclosed below or within the footnotes, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On April 28, 2021, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Agreement”) with CDI Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Company (“Acquisition”), Cardio Diagnostics, Inc., a Delaware corporation (“CDI”), and the shareholders of CDI (the “CDI Shareholders”). Pursuant to the terms of the Agreement, Acquisition will merge with and into CDI (the “Merger”) with CDI becoming the surviving entity and a wholly-owned subsidiary of the Company. In consideration for the Merger, the CDI Shareholders shall receive 25,000,000 newly issued shares of common stock of the Company, par value $0.0001 (“I-On Common Stock”) to be issued to the CDI Shareholders in accordance with their pro rata ownership of CDI prior to the Merger. Simultaneously with the Merger, all of the equity interests in I-On Communications, Ltd., a company organized under the laws of the Republic of South Korea (“Communications”), the Company’s wholly-owned subsidiary, shall be transferred by the Company to certain other shareholders of the Company (collectively, the “Communications Shareholders”) in exchange for the return of Twenty Million (20,000,000) shares of the I-On Common Stock held by the Communications Shareholders (the “Spinoff”). The Merger is contingent upon the approval by a majority of the Company’s shareholders of the Spinoff and an amendment to the Company’s Certificate of Incorporation to change the name of the Company to “Cardio Diagnostics Holdings, Inc.” and effectuate the reverse split of the number of outstanding I-On Common Stock on the basis of one share for a range of per every ten fifteen The Termination Date of the Merger Agreement was amended to September 30, 2021 on August 29, 2021 wherein CDI reimbursed the Company expenses in the amount of $28,600 for its June 30, 2021 Form 10-Q filing and related expenses. On October 11, 2021, the Company and CDI again agreed to extend the Termination Date to December 31, 2021 wherein CDI agreed to reimburse the Company for any and all expenses in connection with the Company’s Form 10-Q filing for the period ending September 30, 2021. On December 28, 2021, the Company and CDI agreed to extend the Termination Date of the Agreement to February 28, 2022 wherein CDI agreed to reimburse the Company for any and all expenses in connection with the Company’s Form 10-K filing for the year ending December 31, 2021. On January 6, 2022, the Company filed a Definitive Proxy Statement to hold a Special Meeting of the Company’s stockholders on January 27, 2022 in order to approve: an equity transfer agreement in which the Company will sell transfer of the issued and outstanding equity of I-On Communications Ltd., a wholly-owned subsidiary of the Company organized under the laws of the Republic of Korea, in exchange for the transfer of 20,000,000 shares of the Company’s stock and the assumption of any and all liabilities; and an amendment to our Amended and Restated Certificate of Incorporation to: change the name of the Company from “I-On Digital Corp.” to “Cardio Diagnostics Holdings, Inc.”; and to approve the reverse split of the number of the Company’s outstanding shares of common stock on the basis of one share for every ten (10) to fifteen (15) outstanding shares. On January 27, 2022, at the Special Meeting, a total of 26,393,997 shares of the Company’s common stock outstanding and entitled to vote were present at the meeting in person or by proxy. The proposals to approve the equity transfer agreement and the amendment to the Company’s Articles of Incorporation were approved by more than 76% of the outstanding shares. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements include the accounts of I-ON Digital Corp. and its 99.5% owned subsidiary, I-ON, Ltd and its 57.5% owned subsidiary, eformworks. All intercompany accounts, transactions, and profits have been eliminated upon consolidation. The accompanying consolidated financial statements and the notes hereto are reported in US Dollars. The consolidated financial statements were prepared and presented in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. Non-controlling interests represent the portion of earnings that is not within the parent Company’s control. These amounts are required to be reported as equity instead of as a liability on the consolidated balance sheet. ASC requires net income or loss from non-controlling interests to be shown separately on the consolidated statements of operations. |
Basis of Presentation | The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. The Company is also required to consolidate any variable interest entities (VIEs), of which it is the primary beneficiary, as defined. Based on the Company’s analysis pursuant to ASC 810-10-25, Consolidations, the Company does not have any VIEs that need to be consolidated at this time. When the Company does not have a controlling interest in an entity, but exerts a significant influence over the entity, the Company would apply the equity method of accounting. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the consolidated financial statements. The more significant estimates and assumptions by management include the recoverability of intangibles. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. |
Foreign Currency Transaction and Translation | Foreign Currency Transaction and Translation The Company’s principal country of operations is Korea. The financial position and results of operations of the Company are determined using the local currency, Korean Won (“KRW”), as the functional currency. ● I-ON, Ltd (Japanese subsidiary) – The financial position and results of operations of I-ON, Ltd, the Japanese subsidiary of the Company, are initially recorded using its local currency, Japanese Yen (“JPY”). Assets and liabilities denominated in foreign currency are translated to the functional currency at the functional currency rate of exchange at the balance sheet date. The results of operations denominated in foreign currency are translated at the average rate of exchange during the reporting period. All differences are reflected in accumulated other comprehensive income. December 31, December 31, Average Year Ended December 31, Currency 2021 2020 2021 2020 Japanese Yen to Korean Won JPY10.30 JPY 10.54 JPY10.41 JPY11.05 Korean Won to US Dollar ($) KRW1,185.50 KRW 1,088.00 KRW1,144.42 KRW 1,180.05 Source (Seoul Money Brokerage Services) ● Consolidation – Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rated prevailing at the balance sheet date. The results of operations are translated from KRW to US Dollar at the weighted average rate of exchange during the reporting period. The registered equity capital denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. All translation adjustments resulting from the translation of the financial statements into the reporting currency, US Dollar, are dealt with as a component of accumulated other comprehensive income. Translation adjustments were a net loss of $1,016,433 and net gain of $549,893 for the years ended December 31, 2021 and 2020, respectively. |
Segment Reporting | Segment Reporting FASB ASC 280, Segment Reporting The Company generates revenues from two geographic areas, consisting of Korea and Japan. The following enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated financial statements: 2021 2020 Korea: Current assets $ 11,837,539 $ 10,998,742 Non-current assets 1,965,469 1,603,402 Current liabilities 3,130,606 3,535,680 Non-current liabilities - - Net Sales 14,638,896 8,872,013 Japan: Current assets $ 603,171 $ 557,786 Non-current assets 267 297 Current liabilities 385,511 328,566 Non-current liabilities - - Net Sales 1,560,814 1,599,489 |
Revenue Recognition | Revenue Recognition Revenues are recognized when control of the promised services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company’s revenue consists of services provided, royalties and commissions. These revenue sources are as follows: ● Royalty – the Company receives a fixed amount of royalties from a company in Japan for providing rights to sell the Company’s products in Japanese market. Revenue is recognized over the contract and service period and when collectability is reasonably assured. ● License Solution & Services – the Company recognizes revenue on installation of the web-content management software, services provided for installation, and customization. ● Customizing Services – the Company recognizes revenue from processing transactions between businesses and their customers. Revenue is recognized over the contract and service period and when service for the contract is completed. ● Maintenance – the Company recognizes revenue over the contract term based on percentage-of-completion method. |
Investments | Investments The Company classifies its investment securities as available-for-sale securities in accordance with FASB ASC 320, Investments The Company’s investment securities include privately-held companies where quoted market prices are not available and the cost method, combined with other intrinsic information, is used to assess the fair value of the investment. If the carrying value is below the fair value of an investment at the end of any period, the investment is considered for impairment. Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded, and a new cost basis in the investment is established. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all money market funds and highly liquid financial instruments with maturities of three months or less when acquired to be cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash represents cash deposits which are restricted by the financial institutions for the loans the financial institutions have with the Company’s chief executive officer. The loans with the financial institutions amounted to approximately $1,433,000 and $1,572,000 at December 31, 2021 and 2020, respectively, and expires on various days during 2021 and 2022, unless extended. The loans, bearing various interest rates, are guaranteed by the Company and the restricted cash deposits of the Company are provided to the financial institutions as collateral. The Company’s chief executive officer pays interest from the loans without any default at December 31, 2021 and 2020. The amount of restricted cash as of December 31, 2021 and 2020 was $1,602,699 and $1,746,324, respectively. This arrangement could be considered as a violation of Section 402 of the Sarbanes-Oxley Act of 2002 amended the Securities Exchange Act of 1934 to prohibit U.S. and foreign companies with securities traded in the United States from making, or arranging for third parties to make, nearly any type of personal loan to their directors and executive officers. Violations of the Sarbanes-Oxley loan prohibition are subject to the civil and criminal penalties applicable to violations of the Exchange Act. |
Short-Term Financial Instruments | Short-Term Financial Instruments Short-term financial instruments represent interest-bearing certificates of deposits with original maturities between three months to year. |
Accounts Receivable | Accounts Receivable Accounts receivables are recorded at the invoiced amount and do not bear interest. Amounts collected on accounts receivables are included in net cash provided by operating activities in the consolidated cash flow statements. The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the trade accounts receivable. Management primarily determines the allowance based on the aging of accounts receivable balances, historical write-off experience, customer concentrations, customer credit worthiness and current industry and economic trends. The Company’s provision for uncollectible receivables are included in selling, marketing, general and administrative expense in the consolidated statements of income and comprehensive income. At December 31, 2021 and 2020, allowance for doubtful accounts was approximately $645,000 and $620,000, respectively. The Company does not have any off-balance sheet exposure related to its customers. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation of property and equipment is computed using the double balance method, based on the estimated useful lives as follows: Facility equipment 4 years Automobile 4 years Office equipment 4 years Repairs and maintenance are expensed as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts, and any gain or loss is included in operations. The Company is working on a government research project and many other technical innovation projects. The Company receives government grants that it uses to offset the amount of assets acquired or expenses incurred. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development costs include travel, payroll, and other general expenses specific to research and development activities. Research and development cost for the years ended December 31, 2021 and 2020 were approximately $1,500,217 and $999,209, respectively. |
Intangible Assets | Intangible Assets When the Company acquires an intangible asset, it is recorded at acquisition cost (the purchase price of the intangible asset and the costs directly related to the preparation of the asset for its intended purpose). The cost of an intangible asset acquired in a business combination is measured at the fair value at the acquisition date according to the accounting standards for business combinations. Intangible assets with a finite life are amortized using the straight-line method over their estimated useful lives. The estimated useful lives of the respective asset categories are as follows: Development costs 3 years Intangible assets excluding development costs 10 years Other Intangible assets 3 to 5 years |
Severance and Retirement Benefits | Severance and Retirement Benefits In accordance with the Korean Labor Standard Law, employees and directors with at least one year of service are entitled to receive a lump-sum payment upon termination of their employment, based on their length of service and rate of pay at the time of termination. Accrued severance benefits represent an amount which would be payable assuming all eligible employees and directors were to terminate their employment as of the balance sheet date. The annual severance benefits expense charged to operations is calculated based upon the net change in the accrued severance benefits payable at the balance sheet date based on the guidance of FASB ASC 960, Accounting – Defined Benefit Pension Plans The Company’s retirement pension plan is a defined contribution plan, and the Company pays the defined contribution regardless of the result of the operations of the Company. The Company recognizes the contributions to be paid in the current accounting period as retirement benefits expense. The amounts recognized as costs related to defined contribution plans were $ and $390,234 for the years ended December 31, 2021 and 2020, respectively. |
Compensated Absences | Compensated Absences Employees of the Company are entitled to be compensated for absences depending on job classification, length of service, and other factors. At December 31, 2021 and 2020, the amounts were deemed to be immaterial. |
Impairment Analysis for Long-lived Assets and Intangible Assets | Impairment analysis for long-lived assets and intangible assets The Company’s long-lived assets and intangible assets (consisting of property and equipment and purchased intangible assets) are reviewed for impairment in accordance with the guidance of the FASB ASC 360, Property, Plant, and Equipment |
Earnings Per Share | Earnings Per Share FASB ASC Topic 260, Earnings Per Share |
Fair Value Measurements | Fair Value Measurements The Company follows FASB ASC Topic 820, Fair Value Measurements ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for financial instruments measured at fair value on a recurring basis. The three levels of inputs are as follows: Level 1 Quoted prices in active markets for identical assets or liabilities that the Company has an ability to access as of the measurement date. Level 2 Inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the same term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments include cash and cash equivalents, restricted cash, short-term financial instruments, short-term loans, accounts receivable, investments, accounts payables and debt. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us. The Company has financial instruments classified within the fair value hierarchy, which consists of the following: ● Investments in privately-held companies, where quoted market prices are not available, accounted for as available-for-sale securities, classified as Level 3 within the fair value hierarchy, and are recorded as an asset on the consolidated balance sheet The following table summarize the Company’s fair value measurements by level at December 31, 2021 for the assets measured at fair value on a recurring basis: December 31, 2021 Level 1 Level 2 Level 3 Available-for-sale securities $ - $ - $ 93,168 Long-term Cash - - - Equity purchase put option - - - Fair value, at December 31, 2021 $ - $ - $ 93,168 The following table summarize the Company’s fair value measurements by level at December 31, 2020 for the assets measured at fair value on a recurring basis: December 31, 2020 Level 1 Level 2 Level 3 Available-for-sale securities $ - $ - $ 101,517 Long-term Cash - - - Equity purchase put option - - - Fair value, at December 31, 2020 $ - $ - $ 101,517 |
Income Taxes | Income Taxes Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes. The Company follows FASB ASC 740, Income Taxes FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25 for the years ended December 31, 2021 and 2020. |
Contingencies | Contingencies Accounting guidance requires that the Company record an estimated loss from a loss contingency when information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the consolidated financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires significant judgment. Many of these legal matters can take years to resolve. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are cash and trade receivable arising from its normal business activities. The Company deposits its cash in high credit quality institutions. The Company performs ongoing credit evaluations to its customers and establishes allowances when appropriate. Cash and cash equivalents are maintained at various financial institutions located in Korea and Japan. The Company has never experienced any losses related to these balances. |
Advertising | A dvertising Costs associated with advertising and promotions are expensed as incurred. Advertising expense amounted to $90,094 and $84,216 for the years ended December 31, 2021 and 2020, respectively. |
Employee Stock Based Compensation | Employee Stock Based Compensation The Company accounts for its share-based compensation plan in accordance with FASB ASC 718, Stock Compensation Stock-based compensation issued to employees and members of our board of directors is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis. For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted any fluctuations in these calculations could have a material effect on the results presented in our consolidated statements of operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our consolidated financial statements. |
Non-controlling Interests | Non-controlling Interests Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. |
Government Grants | Government Grants Government grants are not recognized unless there is reasonable assurance that the Company will comply with the grants’ conditions and that the grants will be received. Government borrowings, which are lower than the market interest rate, are regarded as government grants. The grant is measured from the difference between the fair values of the government borrowings computed using the market interest rate and the acquisition cost of the grant. Government grants whose primary condition is that the Company purchase, construct or otherwise acquire long-term assets are deducted in calculating the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense. Government grants which are intended to compensate the Company for expenses incurred are recognized as other income in profit or loss over the periods in which the Company recognizes the related costs as expenses. There are government grants outstanding of $30,431 and $424,439 as of December 31, 2021 and 2020, respectively. |
Value Added Tax | Value Added Tax National Tax Service in Korea administered Value Added Tax under the Tax Reform Act of 1976 promulgated by the National Assembly. Value added tax is imposed on goods sold in or imported into Korea and on services provided within Korea. Value added tax in Korea is charged on an aggregated basis at a rate of 10% on the full price collected for the goods sold or for the taxable services provided. Value added tax paid were $538,944 and $538,533 for the years ended December 31, 2021 and 2020, respectively. |
Recent Accounting Pronouncement | Recent Accounting Pronouncement ● Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting Other recently issued accounting updates are not expected to have a material impact on the Company’s Interim Financial Statements. ● Fair Value Measurements In August 2018, the FASB amended "Fair Value Measurements" to modify the disclosure requirements related to fair value. The amendment removes requirements to disclose (1) the amount of and reasons for transfers between levels 1 and 2 of the fair value hierarchy, (2) our policy related to the timing of transfers between levels, and (3) the valuation processes used in level 3 measurements. It clarifies that, for investments measured at net asset value, disclosure of liquidation timing is only required if the investee has communicated the timing either to us or publicly. It also clarifies that the narrative disclosure of the effect of changes in level 3 inputs should be based on changes that could occur at the reporting date. The amendment adds a requirement to disclose the range and weighted average of significant unobservable inputs used in level 3 measurements. The guidance is effective for the Company with the Company’s quarterly filing for the period ended March 31, 2020 and the Company made the required disclosure changes in that filing and going forward. Adoption did not have an impact on the Company’s consolidated results of operations, consolidated financial position, and cash flows. ● Leases (ASU 2019-01) In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements, which removed the requirement for an entity to disclose in the interim periods after adoption, the effect of the change on income from continuing operations, net income, any other affected financial statement line item, and any affected per share amount. For lessors, the new leasing standard requires leases to be classified as a sales-type, direct financing or operating leases. These criteria focus on the transfer of control of the underlying lease asset. This standard and related update was effective for fiscal years beginning after December 15, 2018 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
Foreign Currency Exchange Rates | December 31, December 31, Average Year Ended December 31, Currency 2021 2020 2021 2020 Japanese Yen to Korean Won JPY10.30 JPY 10.54 JPY10.41 JPY11.05 Korean Won to US Dollar ($) KRW1,185.50 KRW 1,088.00 KRW1,144.42 KRW 1,180.05 |
Consolidated Financial Statements by Geographic Areas | The Company generates revenues from two geographic areas, consisting of Korea and Japan. The following enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated financial statements: 2021 2020 Korea: Current assets $ 11,837,539 $ 10,998,742 Non-current assets 1,965,469 1,603,402 Current liabilities 3,130,606 3,535,680 Non-current liabilities - - Net Sales 14,638,896 8,872,013 Japan: Current assets $ 603,171 $ 557,786 Non-current assets 267 297 Current liabilities 385,511 328,566 Non-current liabilities - - Net Sales 1,560,814 1,599,489 |
Estimated Useful Lives of Property and Equipment | Property and equipment are recorded at cost. Depreciation of property and equipment is computed using the double balance method, based on the estimated useful lives as follows: Facility equipment 4 years Automobile 4 years Office equipment 4 years |
Estimated Useful Lives of Respective Asset Categories | The estimated useful lives of the respective asset categories are as follows: Development costs 3 years Intangible assets excluding development costs 10 years Other Intangible assets 3 to 5 years |
Fair Value Measurements by Level for Assets Measured at Fair Value on Recurring Basis | The following table summarize the Company’s fair value measurements by level at December 31, 2021 for the assets measured at fair value on a recurring basis: December 31, 2021 Level 1 Level 2 Level 3 Available-for-sale securities $ - $ - $ 93,168 Long-term Cash - - - Equity purchase put option - - - Fair value, at December 31, 2021 $ - $ - $ 93,168 The following table summarize the Company’s fair value measurements by level at December 31, 2020 for the assets measured at fair value on a recurring basis: December 31, 2020 Level 1 Level 2 Level 3 Available-for-sale securities $ - $ - $ 101,517 Long-term Cash - - - Equity purchase put option - - - Fair value, at December 31, 2020 $ - $ - $ 101,517 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of the following: December 31, 2021 2020 Facilities $ 181,193 $ 197,430 Vehicles 39,055 42,555 Equipment 1,694,969 1,769,330 Government grants (39,752 ) (355,582 ) Total property and equipment 1,875,465 1,653,733 Less: accumulated depreciation (1,770,020 ) (1,535,331 ) Property and equipment, net $ 105,445 $ 118,402 |
Investment (Tables)
Investment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investment [Abstract] | |
Summary of Investment Securities | The following table summarize the Company’s investment securities: Investment Percentage of Ownership December 31, 2021 December 31, 2020 Available-for-sale securities 4Grit Available-for-sale 2.50 % $ 42,180 $ 45,960 E-channel Available-for-sale 0.07 % $ 39,895 $ 43,470 KSFC Available-for-sale 0.11 % $ 11,093 $ 12,087 Total investment securities $ 93,168 $ 101,517 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Intangible Assets [Abstract] | |
Intangible Assets | Intangible assets consist of the following: 2021 2020 Patents $ 338,361 $ 325,842 Trademark 26,555 17,639 Start-Up Cost 1,291 1,406 Software 734,961 568,822 Government grants (168 ) (50,364 ) Total intangible assets 1,101,000 863,345 Less: Accumulated amortization $ (662,219 ) (630,945 ) Intangible assets, net $ 438,781 $ 232,400 |
Future Amortization Expense of Intangible Assets | Future amortization expense of the Company’s intangible assets at December 31, 2021 is expected to be as follows: Years ending December 31, 2022 $ 110,064 2023 78,500 2024 77,734 2025 76,580 2026 67,380 Thereafter 28,523 Total $ 438,781 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Long-term Debt [Abstract] | |
Long-term Debt | Total long-term debt consisted of the following: 2021 2020 A note payable to a financial institution bearing interest at 2.81 2.54 - 206,765 Long-term debt $ - $ 206,765 Less: current portion - (206,765 ) Long-term debt, net of current portion $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies [Abstract] | |
Future Minimum Rental Payments | Future minimum rental payments under the non-cancelable operating leases as of December 31, 2022 are as follows: December 31, Amount 2022 146,799 Total $ 146,799 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Common Share | The following table sets forth the computation of basic and diluted net income per common share: Years Ended December 31, 2021 2020 Net income before non-controlling interest $ 1,992,248 $ 1,620,879 Non-controlling interest (171,628 ) 431 Net income 2,163,876 1,620,448 Weighted-average shares of common stock outstanding: Basic 35,030,339 35,030,339 Dilutive effect of common stock equivalents arising from share option, excluding antidilutive effect from loss - - Dilutive shares 35,030,339 35,030,339 Earnings per share – Basic and diluted Net income before non-controlling interest $ 0.06 $ 0.05 Non-controlling interest $ 0.00 $ 0.00 Earnings per share to stockholders $ 0.06 $ 0.05 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stock Compensation [Abstract] | |
Summary of Stock Option Plan | A summary of the status of the Company’s stock option plan is presented as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Live (In Years) Aggregate Intrinsic Value Outstanding, December 31, 2018 160,116 $ 1.63 9.18 $ 64,046 Granted - - Exercised - - Cancelled - - Outstanding, December 31, 2019 160,116 $ 1.63 8.18 $ 64,046 Granted - - Exercised - - Cancelled - - Outstanding, December 31, 2020 160,116 $ 1.63 7.18 $ - Granted - - Exercised - - Cancelled - - Outstanding, December 31, 2021 160,116 $ 1.63 6.18 $ - Options exercisable at December 31, 2021 91,044 $ - - $ - Vested and expected to vest at December 31, 2021 91,044 $ - - $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes [Abstract] | |
Income Taxes | Income taxes consist of the following: Current Deferred Total Year ended December 31, 2021 Federal $ - $ - $ - State - - - Foreign (390,654 ) 83,874 (306,780 ) Total income tax provision (benefit) $ (390,654 ) $ 83,874 $ (306,780 ) Year ended December 31, 2020 Federal $ - $ - $ - State - - - Foreign 48,847 37,723 86,570 Total income tax provision (benefit) $ 48,847 $ 37,723 $ 86,570 |
Components of Deferred Income Tax Assets and Liabilities | The significant components of deferred income tax assets and liabilities are as follows: As of December 31, 2021 2020 Deferred income tax assets: Allowance for bad debt $ 169,754 $ 182,709 Government grants 97,885 18,687 Available-for-sale securities 7,625 8,308 Research and development tax credit 678,414 1,178,952 Net operating income (loss) 339,541 (426,081 ) Retirement benefits 73,056 78,993 Total deferred income tax assets 1,366,275 1,041,568 Less - valuation allowance (361,053) (11,482 ) Deferred tax assets, net of valuation allowance 1,005,222 1,030,086 Deferred income tax liabilities: Accounts receivable (3,872 ) - Available-for-sale securities (658 ) - Total deferred income tax liabilities (4,530 ) - Net deferred tax assets $ 1,000,692 $ 1,030,086 Current deferred tax assets: $ 410,259 $ 274,291 Non-current deferred tax assets $ 590,433 $ 755,795 |
Effective Tax Rates | The effective tax rates for the reporting periods are as follows: Years Ended December 31, 2021 2020 Tax expense (benefit) at statutory rate - 22 $ 370,803 $ 398,431 Allowance for bad debt 12,955 (17,331 ) Government grants (79,198) 13,698 Available-for-sale securities 683 36,006 Research and development tax credit 500,538 53,925 Net operating income (loss) (765,622 ) 516,631 Retirement benefits 5,937 (4,761 ) Accounts receivables (3,872 ) - Capital (658 ) - Tax credits (709,399 ) (921,511 ) Valuation allowance 361,053 11,482 Total income tax provision (benefit) $ (306,780 ) $ 86,570 Effective tax rate -18.20 % 5.07 % |
Organization and Operations (De
Organization and Operations (Details) | Aug. 01, 2021KRW (₩) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Organization and Operations [Abstract] | |||
Total assets | $ 14,406,446 | $ 13,160,227 | |
Subsidiaries [Member] | I-ON, Ltd [Member] | |||
Organization and Operations [Abstract] | |||
Total assets | $ 603,438 | ||
Ownership percentage | 99.50% | ||
Subsidiaries [Member] | eformworks Co., Ltd [Member] | |||
Organization and Operations [Abstract] | |||
Ownership percentage | 57.50% | ||
Contribution to subsidiary | ₩ | ₩ 300,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Principles of Consolidation and Presentation (Details) - Subsidiaries [Member] | Dec. 31, 2021 | Aug. 01, 2021 |
I-ON, Ltd [Member] | ||
Principles of Consolidation and Presentation [Abstract] | ||
Ownership percentage | 99.50% | |
eformworks Co., Ltd [Member] | ||
Principles of Consolidation and Presentation [Abstract] | ||
Ownership percentage | 57.50% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Foreign Currency Transaction and Translation (Details) | 12 Months Ended | |||||||
Dec. 31, 2021₩ / ¥ | Dec. 31, 2021₩ / $₩ / ¥ | Dec. 31, 2021USD ($)₩ / ¥ | Dec. 31, 2020₩ / ¥ | Dec. 31, 2020₩ / ¥₩ / $ | Dec. 31, 2020USD ($)₩ / ¥ | Dec. 31, 2021₩ / $ | Dec. 31, 2020₩ / $ | |
Foreign Currency Transaction and Translation [Abstract] | ||||||||
Foreign currency exchange rate | 10.30 | 10.30 | 10.30 | 10.54 | 10.54 | 10.54 | 1,185.50 | 1,088 |
Average exchange rate for the period | 10.41 | 1,144.42 | 11.05 | 1,180.05 | ||||
Net gain (loss) on translation adjustments | $ (1,016,433) | $ 549,893 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Segment Reporting (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)Area | Dec. 31, 2020USD ($) | |
Segment Reporting [Abstract] | ||
Number of geographic areas | Area | 2 | |
Consolidated Financial Statements by Geographic Areas [Abstract] | ||
Current assets | $ 12,440,710 | $ 11,556,528 |
Non-current assets | 1,965,736 | 1,603,699 |
Current liabilities | 3,516,117 | 3,864,246 |
Net Sales | 16,199,710 | 10,471,502 |
Reportable Geographical Areas [Member] | Korea [Member] | ||
Consolidated Financial Statements by Geographic Areas [Abstract] | ||
Current assets | 11,837,539 | 10,998,742 |
Non-current assets | 1,965,469 | 1,603,402 |
Current liabilities | 3,130,606 | 3,535,680 |
Non-current liabilities | 0 | 0 |
Net Sales | 14,638,896 | 8,872,013 |
Reportable Geographical Areas [Member] | Japan [Member] | ||
Consolidated Financial Statements by Geographic Areas [Abstract] | ||
Current assets | 603,171 | 557,786 |
Non-current assets | 267 | 297 |
Current liabilities | 385,511 | 328,566 |
Non-current liabilities | 0 | 0 |
Net Sales | $ 1,560,814 | $ 1,599,489 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies, Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Investments [Abstract] | ||
Unrealized gain or loss | $ 0 | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies, Restricted Cash (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Restricted Cash [Abstract] | ||
Restricted cash, restricted for loans with the financial institutions | $ 1,433,000 | $ 1,572,000 |
Restricted cash | $ 1,602,699 | $ 1,746,324 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies, Accounts Receivable (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts Receivable [Abstract] | ||
Allowance for doubtful accounts | $ 645,000 | $ 620,000 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies, Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Facility Equipment [Member] | |
Property and Equipment [Abstract] | |
Estimated useful lives | 4 years |
Automobile [Member] | |
Property and Equipment [Abstract] | |
Estimated useful lives | 4 years |
Office Equipment [Member] | |
Property and Equipment [Abstract] | |
Estimated useful lives | 4 years |
Summary of Significant Accou_11
Summary of Significant Accounting Policies, Research and Development (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Research and Development [Abstract] | ||
Research and development cost | $ 1,500,217 | $ 999,209 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies, Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Development Costs [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives of finite lived intangible assets | 3 years |
Intangible Assets Excluding Development Costs [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives of finite lived intangible assets | 10 years |
Other Intangible Assets [Member] | Minimum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives of finite lived intangible assets | 3 years |
Other Intangible Assets [Member] | Maximum [Member] | |
Intangible Assets [Abstract] | |
Estimated useful lives of finite lived intangible assets | 5 years |
Summary of Significant Accou_13
Summary of Significant Accounting Policies, Severance and Retirement Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Severance and Retirement Benefits [Abstract] | ||
Minimum service to receive lump-sum payment | 1 year | |
Defined contribution plans cost | $ 436,983 | $ 390,234 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies, Fair Value Measurements (Details) - Recurring [Member] - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Level 1 [Member] | ||
Assets Measured at Fair Value on Recurring Basis [Abstract] | ||
Available-for-sale securities | $ 0 | $ 0 |
Long-term Cash | 0 | 0 |
Equity purchase put option | 0 | 0 |
Fair value | 0 | 0 |
Level 2 [Member] | ||
Assets Measured at Fair Value on Recurring Basis [Abstract] | ||
Available-for-sale securities | 0 | 0 |
Long-term Cash | 0 | 0 |
Equity purchase put option | 0 | 0 |
Fair value | 0 | 0 |
Level 3 [Member] | ||
Assets Measured at Fair Value on Recurring Basis [Abstract] | ||
Available-for-sale securities | 93,168 | 101,517 |
Long-term Cash | 0 | 0 |
Equity purchase put option | 0 | 0 |
Fair value | $ 93,168 | $ 101,517 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies, Advertising (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Advertising [Abstract] | ||
Advertising expense | $ 90,094 | $ 84,216 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies, Employee Stock Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Employee Stock Based Compensation [Abstract] | |
Vesting period | 3 years |
Summary of Significant Accou_17
Summary of Significant Accounting Policies, Government Grants (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Government Grants [Abstract] | ||
Government grants outstanding | $ 30,431 | $ 424,439 |
Summary of Significant Accou_18
Summary of Significant Accounting Policies, Value Added Tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Value Added Tax [Abstract] | ||
Value added tax rate | 10.00% | |
Value added tax paid | $ 538,944 | $ 538,533 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Components of Property and Equipment [Abstract] | ||
Government grants | $ (39,752) | $ (355,582) |
Property and equipment | 1,875,465 | 1,653,733 |
Less: accumulated depreciation | (1,770,020) | (1,535,331) |
Property and equipment, net | 105,445 | 118,402 |
Deprecation expense | 70,056 | 111,806 |
Facilities [Member] | ||
Components of Property and Equipment [Abstract] | ||
Property and equipment before government grants | 181,193 | 197,430 |
Vehicles [Member] | ||
Components of Property and Equipment [Abstract] | ||
Property and equipment before government grants | 39,055 | 42,555 |
Equipment [Member] | ||
Components of Property and Equipment [Abstract] | ||
Property and equipment before government grants | $ 1,694,969 | $ 1,769,330 |
Investment (Details)
Investment (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Investments [Abstract] | ||
Total investment securities | $ 93,168 | $ 101,517 |
Available-for-sale [Member] | 4Grit [Member] | ||
Investments [Abstract] | ||
Percentage of ownership | 2.50% | |
Available-for-sale | $ 42,180 | 45,960 |
Available-for-sale [Member] | E-channel [Member] | ||
Investments [Abstract] | ||
Percentage of ownership | 0.07% | |
Available-for-sale | $ 39,895 | 43,470 |
Available-for-sale [Member] | KSFC [Member] | ||
Investments [Abstract] | ||
Percentage of ownership | 0.11% | |
Available-for-sale | $ 11,093 | $ 12,087 |
Intangible Assets, Summary (Det
Intangible Assets, Summary (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets [Abstract] | ||
Government grants | $ (168) | $ (50,364) |
Total intangible assets | 1,101,000 | 863,345 |
Less: Accumulated amortization | (662,219) | (630,945) |
Intangible assets, net | 438,781 | 232,400 |
Amortization expense | 38,444 | 29,179 |
Patents [Member] | ||
Intangible Assets [Abstract] | ||
Intangible assets before government grants | 338,361 | 325,842 |
Trademark [Member] | ||
Intangible Assets [Abstract] | ||
Intangible assets before government grants | 26,555 | 17,639 |
Start-Up Cost [Member] | ||
Intangible Assets [Abstract] | ||
Intangible assets before government grants | 1,291 | 1,406 |
Software [Member] | ||
Intangible Assets [Abstract] | ||
Intangible assets before government grants | $ 734,961 | $ 568,822 |
Intangible Assets, Future Amort
Intangible Assets, Future Amortization Expense of Intangible Assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Future Amortization Expense [Abstract] | ||
2022 | $ 110,064 | |
2023 | 78,500 | |
2024 | 77,734 | |
2025 | 76,580 | |
2026 | 67,380 | |
Thereafter | 28,523 | |
Intangible assets, net | $ 438,781 | $ 232,400 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Long-term Debt [Abstract] | ||
Long-term debt | $ 0 | $ 206,765 |
Less: current portion | 0 | (206,765) |
Long-term debt, net of current portion | $ 0 | $ 0 |
Note Payable One [Member] | ||
Long-term Debt [Abstract] | ||
Debt instrument, stated interest rate | 2.81% | 2.54% |
Notes Payable to Financial Institution [Member] | Note Payable One [Member] | ||
Long-term Debt [Abstract] | ||
Long-term debt | $ 0 | $ 206,765 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Royalty [Abstract] | ||
Royalty agreement extension period | 5 years | |
Proceeds from royalties | $ 130,000 | $ 187,000 |
Minimum future lease payments [Abstract] | ||
2022 | 146,799 | |
Total | 146,799 | |
Rent expense | $ 146,799 | $ 131,689 |
Maximum [Member] | ||
Royalty [Abstract] | ||
Term of royalty agreement | 20 years |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net income | $ 1,992,248 | $ 1,620,879 |
Non-controlling interest | (171,628) | 431 |
Net income | $ 2,163,876 | $ 1,620,448 |
Weighted-average shares of common stock outstanding [Abstract] | ||
Basic (in shares) | 35,030,339 | 35,030,339 |
Dilutive effect of common stock equivalents arising from share option, excluding antidilutive effect from loss (in shares) | 0 | 0 |
Dilutive shares (in shares) | 35,030,339 | 35,030,339 |
Earnings per share - Basic and diluted [Abstract] | ||
Net income before non-controlling interest - basic (in dollars per share) | $ 0.06 | $ 0.05 |
Net income before non-controlling interest - diluted (in dollars per share) | 0.06 | 0.05 |
Non-controlling interest - basic (in dollars per share) | 0 | 0 |
Non-controlling interest -diluted (in dollars per share) | 0 | 0 |
Earnings per share to stockholders - basic (in dollars per share) | 0.06 | 0.05 |
Earnings per share to stockholders - diluted (in dollars per share) | $ 0.06 | $ 0.05 |
Non-vested antidilutive awards (in shares) | 0 | 0 |
Stock Compensation (Details)
Stock Compensation (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Option Plan [Abstract] | ||||
Vesting period | 3 years | |||
Stock Options [Member] | ||||
Stock Option Plan [Abstract] | ||||
Vesting period | 3 years | |||
Exercisable period from end of vesting period | 7 years | |||
Exercisable period from date of public listing | 1 year | |||
Stock-based compensation | $ 0 | $ 66,530 | ||
Weighted average assumptions used in valuing stock options [Abstract] | ||||
Expected life | 6 years 3 months | |||
Risk-free interest rate | 2.85% | |||
Expected volatility | 16.38% | |||
Dividends | 0.00% | |||
Number of Shares [Roll Forward] | ||||
Outstanding, beginning of period (in shares) | 160,116 | 160,116 | 160,116 | |
Granted (in shares) | 0 | 0 | 0 | |
Exercised (in shares) | 0 | 0 | 0 | |
Cancelled (in shares) | 0 | 0 | 0 | |
Outstanding, end of period (in shares) | 160,116 | 160,116 | 160,116 | 160,116 |
Options exercisable, at end of period (in shares) | 91,044 | |||
Vested and expected to vest, at end of period (in shares) | 91,044 | |||
Weighted-Average Exercise Price [Abstract] | ||||
Outstanding, beginning of period (in dollars per share) | $ 1.63 | $ 1.63 | $ 1.63 | |
Granted (in dollars per share) | 0 | 0 | 0 | |
Exercised (in dollars per share) | 0 | 0 | 0 | |
Cancelled (in dollars per share) | 0 | 0 | 0 | |
Outstanding, end of period (in dollars per share) | 1.63 | $ 1.63 | $ 1.63 | $ 1.63 |
Options exercisable, at end of period (in dollars per share) | 0 | |||
Vested and expected to vest, at end of period (in dollars per share) | $ 0 | |||
Weighted Average Remaining Contractual Live [Abstract] | ||||
Outstanding | 6 years 2 months 4 days | 7 years 2 months 4 days | 8 years 2 months 4 days | 9 years 2 months 4 days |
Aggregate Intrinsic Value [Abstract] | ||||
Outstanding, end of period | $ 0 | $ 0 | $ 64,046 | $ 64,046 |
Options exercisable, at end of period | 0 | |||
Vested and expected to vest, at end of period | 0 | |||
Unrecognized compensation expense related to nonvested share [Abstract] | ||||
Unrecognized compensation expense related to nonvested share option awards | $ 0 | $ 0 |
Income Taxes, Income Tax Provis
Income Taxes, Income Tax Provision (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current [Abstract] | ||
Federal | $ 0 | $ 0 |
State | 0 | 0 |
Foreign | (390,654) | 48,847 |
Current income tax provision (benefit) | (390,654) | 48,847 |
Deferred [Abstract] | ||
Federal | 0 | 0 |
State | 0 | 0 |
Foreign | 83,874 | 37,723 |
Deferred income tax provision (benefit) | 83,874 | 37,723 |
Total [Abstract] | ||
Federal | 0 | 0 |
State | 0 | 0 |
Foreign | (306,780) | 86,570 |
Total income tax provision (benefit) | $ (306,780) | $ 86,570 |
Income Taxes, Components of Def
Income Taxes, Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred income tax assets [Abstract] | ||
Allowance for bad debt | $ 169,754 | $ 182,709 |
Government grants | 97,885 | 18,687 |
Available-for-sale securities | 7,625 | 8,308 |
Research and development tax credit | 678,414 | 1,178,952 |
Net operating income (loss) | 339,541 | (426,081) |
Retirement benefits | 73,056 | 78,993 |
Total deferred income tax assets | 1,366,275 | 1,041,568 |
Less - valuation allowance | (361,053) | (11,482) |
Deferred tax assets, net of valuation allowance | 1,005,222 | 1,030,086 |
Deferred income tax liabilities [Abstract] | ||
Accounts receivable | (3,872) | 0 |
Available-for-sale securities | (658) | 0 |
Total deferred income tax liabilities | (4,530) | 0 |
Net deferred tax assets | 1,000,692 | 1,030,086 |
Current deferred tax assets | 410,259 | 274,291 |
Non-current deferred tax assets | $ 590,433 | $ 755,795 |
Income Taxes, Effective Tax Rat
Income Taxes, Effective Tax Rates (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation [Abstract] | ||
Tax expense (benefit) at statutory rate - 22% foreign tax | $ 370,803 | $ 398,431 |
Allowance for bad debt | 12,955 | (17,331) |
Government grants | (79,198) | 13,698 |
Available-for-sale securities | 683 | 36,006 |
Research and development tax credit | 500,538 | 53,925 |
Net operating income (loss) | (765,622) | 516,631 |
Retirement benefits | 5,937 | (4,761) |
Accounts receivables | (3,872) | 0 |
Capital | (658) | 0 |
Tax credits | (709,399) | (921,511) |
Valuation allowance | 361,053 | 11,482 |
Total income tax provision (benefit) | $ (306,780) | $ 86,570 |
Effective tax rate | (18.20%) | 5.07% |
Statutory tax rate | 22.00% | 22.00% |
Deferred tax assets recorded on research & development tax credits | $ 678,414 | $ 1,178,952 |
Tax credit carry forward period | 5 years |
Non-Controlling Interest-Issu_2
Non-Controlling Interest-Issued of Preferred Stock by Subsidiaries (Details) - Redeemable Convertible Preferred Stock [Member] - Subsidiaries [Member] | Nov. 22, 2021KRW (₩)₩ / sharesshares | Apr. 09, 2019KRW (₩)₩ / sharesshares |
I-ON, Ltd. [Member] | ||
Non-Controlling Interest-Issued of Preferred Stock by Subsidiaries [Abstract] | ||
Proceeds from issuance of redeemable convertible preferred stock | ₩ | ₩ 549,997,000 | |
Shares issued (in shares) | shares | 157,142 | |
Price per share (in dollars per share) | ₩ 3,500 | |
Ratio of voting rights of preferred stock to common stock | 1 | |
Annual dividend | 2.00% | |
Conversion price (in dollars per share) | ₩ 3,500 | |
Call option premium | 7.00% | |
e.FormWorks Co., Ltd. [Member] | ||
Non-Controlling Interest-Issued of Preferred Stock by Subsidiaries [Abstract] | ||
Proceeds from issuance of redeemable convertible preferred stock | ₩ | ₩ 733,270,800 | |
Shares issued (in shares) | shares | 443,600 | |
Price per share (in dollars per share) | ₩ 1,653 | |
Ratio of voting rights of preferred stock to common stock | 1 | |
Annual dividend | 1.00% | |
Conversion price (in dollars per share) | ₩ 1,653 | |
Call option premium | 6.00% |
Subsequent Events (Details)
Subsequent Events (Details) | Jan. 27, 2022shares | Aug. 29, 2021USD ($) | Apr. 28, 2021$ / sharesshares | Dec. 31, 2021$ / shares | Dec. 31, 2020$ / shares |
Merger and Reorganization [Abstract] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||
Plan of Merger and Reorganization Agreement [Member] | |||||
Merger and Reorganization [Abstract] | |||||
Common stock shares to be received (in shares) | 20,000,000 | ||||
Plan of Merger and Reorganization Agreement [Member] | Minimum [Member] | |||||
Merger and Reorganization [Abstract] | |||||
Reverse stock split | 0.07 | ||||
Plan of Merger and Reorganization Agreement [Member] | Maximum [Member] | |||||
Merger and Reorganization [Abstract] | |||||
Reverse stock split | 0.1 | ||||
Plan of Merger and Reorganization Agreement [Member] | Cardio Diagnostics, Inc. [Member] | |||||
Merger and Reorganization [Abstract] | |||||
Common stock, shares to be issued to shareholders (in shares) | 25,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||
Expenses Reimbursed | $ | $ 28,600 | ||||
Subsequent Event [Member] | Plan of Merger and Reorganization Agreement [Member] | |||||
Merger and Reorganization [Abstract] | |||||
Number of shares of common stock present at special meeting (in shares) | 26,393,997 | ||||
Subsequent Event [Member] | Plan of Merger and Reorganization Agreement [Member] | Minimum [Member] | |||||
Merger and Reorganization [Abstract] | |||||
Percent of outstanding shares that approved proposals to approve equity transfer agreement and amendment to Company's Articles of Incorporation | 76.00% |