Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Dec. 06, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q/A | |
Amendment Flag | true | |
Amendment Description | I-ON Digital Corp. and subsidiaries (the “Company,” “we,” “us” or “our”) is filing this Amendment No. 1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, originally filed with the SEC on August 22, 2022 (the “Original Form 10-Q”) to correct and restate the financial statements for an error in connection with our deconsolidation of a subsidiary, Metaflyer Co. Ltd.(“Metaflyer”) due to the fact that we incorrectly recognized the gain/loss on deconsolidation. | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Transition Report | false | |
Entity File Number | 000-54995 | |
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 | |
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 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 19,724,220 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | IONI | |
Security Exchange Name | NONE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 1,887,518 | $ 3,705,945 |
Restricted cash | 1,469,565 | 1,602,699 |
Short-term financial instruments | 679,867 | 716,154 |
Short-term loan receivable | 259,638 | 126,529 |
Accounts receivables, net of allowance for doubtful accounts $873,624 and $645,335, respectively | 5,625,375 | 5,299,951 |
Deferred tax assets - current | 376,179 | 410,259 |
Prepaid expenses and other current assets | 726,034 | 579,173 |
Total current assets | 11,024,176 | 12,440,710 |
Non-current assets: | ||
Investments | 236,568 | 93,168 |
Property and equipment, net | 109,690 | 105,445 |
Intangible assets, net | 378,481 | 438,781 |
Deposits | 738,468 | 737,909 |
Deferred tax assets - non current | 541,386 | 590,433 |
Total non-current assets | 2,004,593 | 1,965,736 |
Total Assets | 13,028,769 | 14,406,446 |
Current liabilities: | ||
Accounts payable | 536,653 | 320,251 |
Accrued expenses and other | 1,974,158 | 2,546,062 |
Value added tax payable | 15,391 | 202,857 |
Income tax payable | 27,575 | 79,106 |
Short-term loan payable | 309,382 | 337,410 |
Government grants outstanding for usage of future projects | 263,942 | 30,431 |
Total current liabilities | 3,127,101 | 3,516,117 |
Total liabilities | 3,127,101 | 3,516,117 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Common stock - $0.0001 par value; authorized 100,000,000 shares; 35,030,339 shares issued and outstanding at June 30, 2022 and December 31, 2021 | 3,503 | 3,503 |
Treasury stock | (709,478) | (709,478) |
Additional paid-in-capital | 3,713,370 | 3,713,370 |
Accumulated other comprehensive loss | (1,440,069) | (726,500) |
Accumulated retained earnings | 7,642,736 | 7,681,661 |
Total company stockholders' equity | 9,210,062 | 9,962,556 |
Preferred stock (I-ON Korea and eformworks) - $0.4380 par value; authorized 2,000,000 shares; 600,742 shares issued and outstanding at June 30, 2022 and December 31, 2021 | 1,093,569 | 1,093,569 |
Non-controlling interests | (401,963) | (165,796) |
Total stockholders' equity | 9,901,668 | 10,890,329 |
Total Liabilities and Stockholders' Equity | $ 13,028,769 | $ 14,406,446 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Accounts receivables, allowance for doubtful accounts | $ 873,624 | $ 645,335 |
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) | $ 0.438 | $ 0.438 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, issued (in shares) | 600,742 | 600,742 |
Preferred stock, outstanding (in shares) | 600,742 | 600,742 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) [Abstract] | ||||
Net sales | $ 2,854,670 | $ 4,559,135 | $ 5,320,298 | $ 8,608,659 |
Cost of goods sold | 2,469,356 | 2,657,096 | 4,761,882 | 6,131,649 |
Gross profit | 385,314 | 1,902,039 | 558,416 | 2,477,010 |
Operating expense: | ||||
Research and development | 227,571 | 333,631 | 427,879 | 596,256 |
General and administrative | 604,959 | 518,016 | 1,279,945 | 1,077,473 |
Total operating expense | 832,530 | 851,647 | 1,707,824 | 1,673,729 |
Income (loss) from operations | (447,216) | 1,050,392 | (1,149,408) | 803,281 |
Other income (expense): | ||||
Loss on deconsolidation | (100,772) | 0 | (100,772) | 0 |
Interest income | 18,715 | 12,126 | 34,117 | 23,523 |
Foreign currency transaction gain (loss) | 342 | (9,224) | 1,937 | (22,959) |
Miscellaneous income, net | 14,564 | (8,721) | 973,880 | 11,019 |
Interest expense | (1,804) | (3,939) | (3,966) | (8,354) |
Total other income (expense), net | (68,955) | (9,758) | 905,196 | 3,229 |
Income (loss) before provision for income taxes, and non-controlling interest | (516,171) | 1,040,634 | (244,212) | 806,510 |
Provision for (benefit from) income tax | 30,880 | 31,826 | 30,880 | 72,583 |
Net income (loss) before non-controlling interest | (547,051) | 1,008,808 | (275,092) | 733,927 |
Non-controlling interest loss | (95,652) | 391 | (236,167) | (498) |
Net income (loss) | (451,399) | 1,008,417 | (38,925) | 734,425 |
Comprehensive income statement: | ||||
Net income (loss) | (547,051) | 1,008,808 | (275,092) | 733,927 |
Foreign currency translation loss | (485,578) | 11,433 | (713,569) | (546,707) |
Total comprehensive income (loss) | $ (1,032,629) | $ 1,020,241 | $ (988,661) | $ 187,220 |
Earnings per share - Basic | ||||
Net loss before non-controlling interest (in dollars per share) | $ (0.02) | $ 0.03 | $ (0.01) | $ 0.02 |
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 |
Earnings per share to stockholders (in dollars per share) | (0.02) | 0.03 | 0 | 0.02 |
Earnings per share - Diluted | ||||
Net loss before non-controlling interest (in dollars per share) | (0.02) | 0.03 | (0.01) | 0.02 |
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 |
Earnings per share to stockholders (in dollars per share) | $ (0.02) | $ 0.03 | $ 0 | $ 0.02 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 35,030,339 | 35,030,339 | 35,030,339 | 35,030,339 |
Diluted (in shares) | 35,030,339 | 35,030,339 | 35,030,339 | 35,030,339 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - 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, 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 loss | $ 0 | 0 | 0 | 0 | (558,140) | (558,140) | 0 | 0 | (558,140) |
Net income (loss) | 0 | 0 | (273,992) | 0 | 0 | (273,992) | (889) | 0 | (274,881) |
Balance at Mar. 31, 2021 | $ 3,503 | 3,713,370 | 5,243,793 | (709,478) | (268,207) | 7,982,981 | 4,943 | 475,036 | 8,462,960 |
Balance (in shares) at Mar. 31, 2021 | 35,030,339 | ||||||||
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 loss | (546,707) | ||||||||
Balance at Jun. 30, 2021 | $ 3,503 | 3,713,370 | 6,252,210 | (709,478) | (256,774) | 9,002,831 | 5,334 | 475,036 | 9,483,201 |
Balance (in shares) at Jun. 30, 2021 | 35,030,339 | ||||||||
Balance at Mar. 31, 2021 | $ 3,503 | 3,713,370 | 5,243,793 | (709,478) | (268,207) | 7,982,981 | 4,943 | 475,036 | 8,462,960 |
Balance (in shares) at Mar. 31, 2021 | 35,030,339 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Foreign currency translation loss | $ 0 | 0 | 0 | 0 | 11,433 | 11,433 | 0 | 0 | 11,433 |
Net income (loss) | 0 | 0 | 1,008,417 | 0 | 0 | 1,008,417 | 391 | 0 | 1,008,808 |
Balance at Jun. 30, 2021 | $ 3,503 | 3,713,370 | 6,252,210 | (709,478) | (256,774) | 9,002,831 | 5,334 | 475,036 | 9,483,201 |
Balance (in shares) at Jun. 30, 2021 | 35,030,339 | ||||||||
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 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Foreign currency translation loss | $ 0 | 0 | 0 | 0 | (227,991) | (227,991) | 0 | 0 | (227,991) |
Net income (loss) | 0 | 0 | 412,474 | 0 | 0 | 412,474 | 25,281 | 0 | 437,755 |
Balance at Mar. 31, 2022 | $ 3,503 | 3,713,370 | 8,094,135 | (709,478) | (954,491) | 10,147,039 | (140,515) | 1,093,569 | 11,100,093 |
Balance (in shares) at Mar. 31, 2022 | 35,030,339 | ||||||||
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 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Foreign currency translation loss | (713,569) | ||||||||
Balance at Jun. 30, 2022 | $ 3,503 | 3,713,370 | 7,642,736 | (709,478) | (1,440,069) | 9,210,062 | (401,963) | 1,093,569 | 9,901,668 |
Balance (in shares) at Jun. 30, 2022 | 35,030,339 | ||||||||
Balance at Mar. 31, 2022 | $ 3,503 | 3,713,370 | 8,094,135 | (709,478) | (954,491) | 10,147,039 | (140,515) | 1,093,569 | 11,100,093 |
Balance (in shares) at Mar. 31, 2022 | 35,030,339 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Foreign currency translation loss | $ 0 | 0 | 0 | 0 | (485,578) | (485,578) | 0 | 0 | (485,578) |
Net income (loss) | 0 | 0 | (451,399) | 0 | 0 | (451,399) | (261,448) | 0 | (712,847) |
Balance at Jun. 30, 2022 | $ 3,503 | $ 3,713,370 | $ 7,642,736 | $ (709,478) | $ (1,440,069) | $ 9,210,062 | $ (401,963) | $ 1,093,569 | $ 9,901,668 |
Balance (in shares) at Jun. 30, 2022 | 35,030,339 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (38,925) | $ 734,425 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Non-controlling interest | (236,167) | (498) |
Depreciation - fixed assets | 26,122 | 35,923 |
Amortization of intangible assets | 36,886 | 15,752 |
Foreign currency transaction gain (loss) | 1,937 | (22,959) |
Loss on deconsolidation | 100,772 | 0 |
Changes in operating assets and liabilities: | ||
Account receivable, net | (712,964) | (692,439) |
Prepaid expenses and other current assets | (210,119) | (591,635) |
Deposit | (64,865) | (251,966) |
Deferred taxes | 0 | 349,108 |
Account payable | 164,864 | (95,727) |
Accrued expenses and other | (372,266) | (172,896) |
Value added tax payable | (178,912) | (46,053) |
Income tax payable | (47,146) | (30,826) |
Net cash used in operating activities | (1,530,783) | (769,791) |
Cash flows from investing activities: | ||
Purchase of short-term investments | (24,332) | (16,104) |
Purchase of investments | (148,002) | 0 |
Purchases of property and equipment | (39,759) | (27,010) |
Purchases of intangible assets | (11,875) | (3,607) |
Loan provided under short-term loan receivables | (150,605) | 0 |
Net cash used in investing activities | (374,573) | (46,721) |
Cash flows from financing activities: | ||
Principal payments on long-term debt | 0 | (156,549) |
Net proceeds of government grants | 247,517 | 232,039 |
Net cash provided by financing activities | 247,517 | 75,490 |
Effect of foreign currency translation on cash and cash equivalents | (293,722) | (395,426) |
Net decrease in cash and cash equivalents | (1,951,561) | (1,136,448) |
Cash and cash equivalents including restricted cash, beginning of period | 5,308,644 | 6,272,652 |
Cash and cash equivalents including restricted cash, end of period | 3,357,083 | 5,131,204 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 3,966 | 8,354 |
Taxes paid | $ 14,006 | $ 15,947 |
Organization and Operations
Organization and Operations | 6 Months Ended |
Jun. 30, 2022 | |
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 $144,000. 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. (“Communications”) formed a new subsidiary named eformworks Co., Ltd. (“e.Form”) into which Communications moved its electronic signature operations. Communications contributed approximately $253,000 on August 1, 2021 and $77,000 on June 30, 2022 . On June 28, 2022, the board of directors of the Company’s wholly-owned subsidiary I-ON Communications, Ltd. (“Communications”) app roved to EIPGRID, which provides the community energy service platforms. Hence Communications will contribute approximately $773,000 to EIPG |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
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 management, who is responsible for integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the unaudited condensed consolidated financial statements. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of I-ON Communication Co., Ltd. and its 99.5% owned subsidiary, I-ON, Ltd. 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 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. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements, and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. Use of Estimates in the Preparation of Financial Statements The preparation of the unaudited condensed consolidated financial statements in conformity 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 date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could materially differ from these estimates. 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 profit or loss. As of June 30, 2022, and December 31, 2021, the exchange rate was JPY 9.46 and JPY 10.02 per KRW, respectively. The average exchange rate for the six months ended June 30, 2022 and 2021 was JPY 10.37 and JPY 10.51 per KRW, respectively. ● Consolidation – Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rates prevailing at the balance sheet date. The results of operations are translated from KWR 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. As of June 30, 2022, and December 31, 2021, the exchange rate was KRW 1,292.90 and KRW 1,185.50 per US Dollar, respectively. The average exchange rate for the six months ended June 30, 2022 and 2021 was KRW 1,232.94 and KRW 1,117.73, 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: June 30, 2022 (RESTATED) December 31, 2021 Korea Current assets $ 10,551,277 $ 11,837,539 Non-current assets 2,004,368 1,965,469 Current liabilities 3,127,101 3,130,606 Japan Current assets $ 472,899 $ 603,171 Non-current assets 225 267 Current liabilities 320,046 385,511 Six-months Period Ended June 30, Three-months Period Ended June 30, 2022 2021 2022 2021 Korea Net Sales $ 4,744,892 $ 7,901,637 $ 2,527,454 $ 4,211,656 Japan Net Sales $ 575,406 $ 707,022 $ 327,216 $ 347,479 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 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. ● 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. Cash, Cash Equivalents The Company considers all money market funds and highly liquid financial investments 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 $1,469,565 and $1,602,699 at June 30, 2022 and December 31, 2021, respectively, and expires on various days during 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 June 30, 2022 and December 31, 2021. The amount of restricted cash as of June 30, 2022 and December 31, 2021 was $1,469,565 and $1,602,699, 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 is included in selling, marketing, general and administrative expense in the consolidated statements of income and comprehensive income. At June 30, 2022 and December 31, 2021, allowance for doubtful accounts was approximately $873,000 and $645,000, 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 declining 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 three months ended June 30, 2022 and 2021 was $227,571 and $333,631, respectively and for the six months ended June 30, 2022 and 2021 was $427,879 and $596,256, 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 $106,087 and $129,333 for the three months ended June 30, 2022 and 2021, respectively, and $191,605 and $250,455 for the six months ended June 30, 2022 and 2021, 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 June 30, 2022 and December 31, 2021, the amounts were deemed to be immaterial. Impairment analysis for long-lived assets and intangible assets The Company’s long-lived assets and other 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 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 $263,942 and $30,431 as of June 30, 2022 and December 31, 2021, respectively. 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 June 30, 2022 for the assets measured at fair value on a recurring basis: Level 1 Level 2 Level 3 (RESTATED) Available-for-sale securities $ - $ - $ 236,568 Common stock purchase warrant - - - Equity purchase put option - - - Fair value, at June 30, 2022 $ - $ - $ 236,568 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: Level 1 Level 2 Level 3 Available-for-sale securities $ - $ - $ 93,168 Common stock purchase warrant - - - Equity purchase put option - - - Fair value, at December 31, 2021 $ - $ - $ 93,168 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 $6,974 and $31,215 for the three months ended June 30, 2022 and 2021, respectively, and $11,764 and $65,909 for the six months ended June 30, 2022 and 2021, 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 and is adjusted at each reporting date for the net income (loss) attributable to that non-controlling interest during that period. 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 $6,040 and $119,646 for the three months ended June 30, 2022 and 2021, respectively, and $79,612 and $343,751 for the six months ended June 30, 2022 and 2021, respectively. Recently Issued Accounting Pronouncements ● 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. This standard provides optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this standard apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this standard are elective and are effective upon issuance for all entities. The Company is evaluating the expedients and exceptions provided by the amendments in this standard to determine their impact. 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 June 30, 2021 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. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2022 | |
Investments [Abstract] | |
Investments | NOTE 3: Investments 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: Available-for-sale securities Percentage of Ownership June 30, 2022 (RESTATED) December 31, 2021 4Grit 2.50 % $ 38,676 $ 42,180 E-channel 0.07 % $ 36,581 $ 39,895 KSFC 0.00 % $ 10,172 $ 11,093 MetaFlyer 40.00 % $ 151,139 - Total investment securities $ 236,568 $ 93,168 On March 1, 2022, the Company’s wholly-owned subsidiary I-ON Communications, Ltd. (“Communications”) contributed approximately $165,000 to Metaflyer Co. Ltd.(“Metaflyer”), and owned 66.67% of the outstanding capital stock of Metaflyer. Having more investors to Metaflyer, Communications’ ownership to Metaflyer has decreased to 40% as of May 19, 2022, and Communications deconsolidated Metaflyer. After the deconsolidation, Communications uses equity method on the investment to Metaflyer by ASC 323-10-15 Equity Method and Joint Venture. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2022 | |
Property and Equipment [Abstract] | |
Property and Equipment | NOTE 4: Property and Equipment Property and equipment consist of the following: June 30, 2022 December 31, 2021 Facilities $ 166,141 $ 181,193 Vehicles 29,017 39,055 Equipment 1,598,878 1,694,969 Government grants (26,826 ) (39,752 ) Total property and equipment 1,767,211 1,875,465 Less: accumulated depreciation (1,657,521 ) (1,770,020 ) Property and equipment, net $ 109,690 $ 105,445 Depreciation expense for three months ended June 30, 2022 and 2021 was $27,077 and $9,460, respectively, and for six months ended June 30, 2022 and 2021 was $26,122 and $35,923, respectively. As noted in Note 2, the government grants received is against the values of assets acquired or the expenses incurred. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets [Abstract] | |
Intangible Assets | NOTE 5: Intangible Assets Intangible assets consist of the following: June 30, 2022 December 31, 2021 Patents $ 321,578 $ 338,361 Trademark 24,349 26,555 Start-Up Cost 1,183 1,291 Software 673,910 734,961 Government grants - (168 ) Total intangible assets 1,021,020 1,101,000 Less: Accumulated amortization (642,539 ) (662,219 ) Intangible assets, net $ 378,481 $ 438,781 Amortization expense for three months ended June 30, 2022 and 2021 was $18,079 and $7,817, respectively, and for the six months ended June 30, 2022 and 2021, was $36,886 and $15,752, respectively. Future amortization expense of the Company’s intangible assets at June 30, 2022 is expected to be as follows: Years ending December 31, 2022 (remaining six months) $ 53,944 2023 79,158 2024 78,392 2025 77,238 2026 68,038 Thereafter 21,711 Total $ 378,481 As noted in Note 2, the government grants received is against the values of assets acquired or the expenses incurred. |
Short Term Loan Payable
Short Term Loan Payable | 6 Months Ended |
Jun. 30, 2022 | |
Short Term Loan Payable [Abstract] | |
Short Term Loan Payable | NOTE 6: Short Term Loan Payable The Company has a short-term loan with a financial institution bearing interest rate of 2.58% expiring July 15, 2023. All amounts outstanding are due on July 15, 2023, however, the Company may make earlier payments without any penalty. The total amount outstanding was approximately $309,000 and $337,000 at June 30, 2022 and December 31, 2021, respectively. The short-term loan is guaranteed by the officer of the Company. |
Miscellaneous Income
Miscellaneous Income | 6 Months Ended |
Jun. 30, 2022 | |
Miscellaneous Income [Abstract] | |
Miscellaneous Income | NOTE 7: Miscellaneous Income There is the Collaborative R&D Program (“CRP") in Korea that big firms support for small businesses’ research & development projects. One of the big firms in Korea, SK E&S Co., Ltd. decided to support for ION through CRP. ION received approximately $941,118 of fund from SK E&S on February 9, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | NOTE 8: 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. 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. The Company’s lease is a short term lease, which has initial term of 12 months or less and does not include a purchase option, it is not capitalized, and exempted from Leases (Topic 842). Rent expense for all operating leases for the three months ended June 30, 2022 and 2021 was $33,274 and $37,452, respectively, and for the six months ended June 30, 2022 and 2021 was $68,130 and $75,152, respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 9: 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. The Company signed the contract with its investee, Metaflyer, to provide SaaS version. The project term is from March 2, 2022 to June 30, 2022, and the contract fee is approximately $154,000. The Company received prepaid expense of $77,000 from Metaflyer on March 25, 2022, and the remaining balance will be received after the project is completed. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 10: 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: Three-months Period Ended June 30, Six-months Period Ended June 30, Periods Ended 2022 (RESTATED) 2021 2022 (RESTATED) 2021 Net income (loss) before non-controlling interest $ (547,051 ) $ 1,008,808 $ (275,092 ) $ 733,927 Non-controlling interest (95,652 ) 391 (236,167 ) (498 ) Net income (loss) (451,399 ) 1,008,417 (38,925 ) 734,425 Weighted-average shares of common stock outstanding: Basic 35,030,339 35,030,339 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 35,030,339 35,030,339 Earnings per share - Basic Net income (loss) before non-controlling interest $ (0.02 ) $ 0.03 $ (0.01 ) $ 0.02 Non-controlling interest $ (0.00 ) $ 0.00 $ (0.01 ) $ (0.00 ) Earnings per share to stockholders $ (0.02 ) $ 0.03 $ (0.00 ) $ 0.02 Earnings per share - Diluted Net income (loss) before non-controlling interest $ (0.02 ) $ 0.03 $ (0.01 ) $ 0.02 Non-controlling interest $ (0.00 ) $ 0.00 $ (0.01 ) $ (0.00 ) Earnings per share to stockholders $ (0.02 ) $ 0.03 $ (0.00 ) $ 0.02 No non-vested share awards or non-vested share unit awards were antidilutive for the six months ended June 30, 2022 and 2021. |
Non-Controlling Interest-Issuan
Non-Controlling Interest-Issuance of Preferred Stock by Subsidiaries | 6 Months Ended |
Jun. 30, 2022 | |
Non-Controlling Interest-Issuance of Preferred Stock by Subsidiaries [Abstract] | |
Non-Controlling Interest-Issuance of Preferred Stock by Subsidiaries | NOTE 11: Non-Controlling Interest-Issuance of Preferred Stock by Subsidiaries On April 9, 2019, The Company’s subsidiary, I-ON Communication Korea issued 157,142 shares of redeemable convertible preferred stock at a price of KRW3,500 per share for proceeds of KRW549,997,000. 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 ● Call option by preferred shareholder - Preferred stock may be converted to common stock anytime at a fixed conversion price of KRW 3,500 ● Call option by I-ON Communication – 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 of 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 ● Call option by preferred shareholder – Preferred stock may be converted to common stock anytime at a fixed conversion price of KRW 1,653 ● 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. |
Termination of Merger Agreement
Termination of Merger Agreement | 6 Months Ended |
Jun. 30, 2022 | |
Termination of Merger Agreement [Abstract] | |
Termination of Merger Agreement | NOTE 12: Termination of Merger Agreement On April 28, 2021, I-ON Digital Corp. a Delaware corporation (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 (10) to 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. CDI has advised the Company that it will not grant another extension to the Agreement and considers the Agreement expired. |
Deconsolidation of Metaflyer
Deconsolidation of Metaflyer | 6 Months Ended |
Jun. 30, 2022 | |
Deconsolidation of Metaflyer [Abstract] | |
Deconsolidation of Metaflyer | NOTE 13: Deconsolidation of Metaflyer On March 1, 2022, the Company’s wholly-owned subsidiary I-ON Communications, Ltd. (“Communications”) contributed approximately $165,000 to Metaflyer, and owned 66.7% of the outstanding capital stock of Metaflyer. Subsequently, Metaflyer added more investors and Communications’ ownership percentage of Metaflyer decreased from 66.7% to 40.0% as of May 19, 2022. The amounts of assets, liabilities and non-controlling interest attributable to Metaflyer were deconsolidated on May 19, 2022 in accordance with FASB ASC 810, Consolidation. As a result of the deconsolidation, the Company recognized a loss on deconsolidation of $100,772 and the amount is separately presented on the condensed consolidated statements of operations. The loss on deconsolidation represents the difference between the fair value of retained equity method investment of $151,140 and $251,912 of the Communications’ investment percentage of carrying amount of Metaflyer’s net assets as of May 19, 2022. The Company follows FASB ASC Topic 820, Fair Value Measurements, to measure the fair value of retained equity method investment to Metaflyer. Under FASB ASC 820, 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. Financial instruments on Metaflyer include cash and cash equivalents and prepaid expenses as of the fair value measurement date and the carrying values of these financial instruments approximate their fair value due to their short maturities. Upon the deconsolidation, the Company elected to apply the equity method on the investment to Metaflyer by retaining significant influence over Metaflyer in accordance with FASB ASC 323-10-15, Equity Method and Joint Venture. The Company will not participate in Metaflyer’s operations or management upon the deconsolidation; however, we concluded that Metaflyer is still a related party to the Company considering the CEO of Metaflyer is a board member of the Company. |
Restatement
Restatement | 6 Months Ended |
Jun. 30, 2022 | |
Restatement [Abstract] | |
Restatement | NOTE 14: Restatement On May 19, 2022, the Company deconsolidated one of its subsidiaries, Metaflyer, but has not recognized gain/loss on deconsolidation. The Company has re-evaluated the gain/loss on deconsolidation and determined that the Company incorrectly described as being issued. The following tables present the effects of the restatement on the accompanying consolidated financial statements at June 30, 2022: Condensed Consolidated Balance Sheet As of June 30, 2022 As Previously Reported Restated Non-Current Assets: Investment $ 240,120 $ 236,568 Total non current assets 2,008,145 2,004,593 Total Assets $ 13,032,321 $ 13,028,769 Stockholders' Equity: Accumulated other comprehensive loss (1,712,396 ) (1,440,069 ) Accumulated retained earnings 7,752,819 7,642,736 Total company stockholders' equity 9,047,818 9,210,062 Non-controlling interests (236,167 ) (401,963 ) Total stockholders' equity 9,905,220 9,901,668 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Three-month Period ended June 30, 2022 Six-month Period ended June 30, 2022 As Previously Reported Restated As Previously Reported Restated Other income (expense) Loss on deconsolidation $ - $ (100,772 ) $ - $ (100,772 ) Total other income (expense), net 31,814 (68,955 ) 1,005,965 905,196 Income (loss) before provision for income taxes, and non-controlling interest (406,088 ) (516,171 ) (134,129 ) (244,212 ) Net income (loss) before non-controlling interest (436,968 ) (547,051 ) (165,009 ) (275,092 ) Net income (loss) $ (341,316 ) $ (451,399 ) $ 71,158 $ (38,925 ) Comprehensive income statement: Net income (loss) $ (436,968 ) $ (547,051 ) $ (165,009 ) $ (275,092 ) Foreign currency translation loss (757,905 ) (485,578 ) (985,896 ) (713,569 ) Total comprehensive income (loss) $ (1,194,873 ) $ (1,032,629 ) $ (1,150,905 ) $ (988,661 ) Earnings per share - Basic Net income (loss) before non-controlling interest $ (0.01 ) $ (0.02 ) $ (0.01 ) $ (0.01 ) Non-controlling interest $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.01 ) Earnings per share to stockholders $ (0.01 ) $ (0.02 ) $ (0.01 ) $ (0.00 ) Earnings per share - Diluted Net income (loss) before non-controlling interest $ (0.01 ) $ (0.02 ) $ (0.01 ) $ (0.01 ) Non-controlling interest $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.01 ) Earnings per share to stockholders $ (0.01 ) $ (0.02 ) $ (0.01 ) $ (0.00 ) Condensed Consolidated Statement of Cash Flows Six Months ended June 30, 2022 As Previously Reported Restated Cash flows from operating activities: Net income (loss) $ 71,158 $ (38,925 ) Adjustments to reconcile net loss to net cash provided by operating activities: Loss on deconsolidation - 100,772 Net cash used in operating activities (1,521,472 ) (1,530,783 ) Cash flows from investing activities: Purchase of investments (162,214 ) (148,002 ) Net cash used in operating activities (388,785 ) (374,573 ) Effect of foreign currency translation on cash and cash equivalents (288,821 ) (293,722 ) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15: 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, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements. 1. Securities Purchase Agreement On September 28, 2022, I-On Digital Corp. (the “Company,” “we,” “us” or “our”) entered into a Series A Preferred Stock Purchase Agreement (the “Purchase Agreement”) with I-ON Acquisition Corp., a Florida corporation (“IAC”). Pursuant to the terms of the Purchase Agreement, IAC acquired 3,000 shares of a newly created Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred”) for proceeds in the amount of $250,000 (the “Subscription Amount”) in the form of a promissory note (the “Note”) which is secured by the pledge of the Series A Shares, the Series B Shares (as defined herein) and other assets of IAC in a Stock Pledge and Escrow Agreement (the “Pledge Agreement”). Each Series A Preferred Share is convertible into Ten Thousand (10,000) shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock” and is entitled to vote on matters as to which holders of the Common Stock shall be entitled to vote at a rate of One Hundred (100) votes per share of Series A Preferred. Also on September 28, 2022, the Company entered into a Contribution Agreement (the “Contribution Agreement”) with certain Purchasers (the “Purchasers”) pursuant to which the Purchasers agreed to purchase 6,000 shares of a newly created Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred”), in exchange for the Purchasers’ rights and title to certain assets of the Purchasers described in the Contribution Agreement. Each Series B Preferred Share is convertible into One Thousand (1,000) shares of Common Stock and entitled to vote on matters as to which holders of the Common stock shall be entitled to vote at a rate of One Thousand (1,000) votes per Series B Preferred Share. Following the consummation of the transactions set forth in the Purchase Agreement and the Contribution Agreement, and the spin-off of the Company’s operating subsidiary, I-On Communications Co., Ltd. (“Communications”), as descried further herein, the Company adopted the operations of IAC of providing funding and complimentary services, including hashing power, to mine bitcoin. The Company’s officers and directors will not resign, and IAC’s management will not be appointed until the Note is paid in full. 2. Spin-Off of I-On Communications Co., Ltd. On September 29, 2022, the Company effectuated an Equity Transfer Agreement (the “Spin-Off Agreement”) among the Company, Communications and JFJ Digital Corp., a Delaware corporation (“JFJ”), whereby all of the outstanding equity of Communications was transferred to JFJ in exchange for the return of 15,306,119 shares of the Company’s Common Stock held by Jae Cheol Oh and HongRae Kim, the Company’s principal executive officer and members of the Board of Directors (the “Spin-Off”). Pursuant to the Spin-Off Agreement, in addition to acquiring all of the outstanding capital stock of Communications, JFJ will assume all responsibilities for any debts, obligations and liabilities of Communications and acquire all rights to any assets of Communications, including, but not limited to, the Subscription Amount. As a result of the Spin-Off, Communications ceased being a subsidiary of the Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of I-ON Communication Co., Ltd. and its 99.5% owned subsidiary, I-ON, Ltd. 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 |
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. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements, and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of the unaudited condensed consolidated financial statements in conformity 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 date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could materially differ from these estimates. |
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 profit or loss. As of June 30, 2022, and December 31, 2021, the exchange rate was JPY 9.46 and JPY 10.02 per KRW, respectively. The average exchange rate for the six months ended June 30, 2022 and 2021 was JPY 10.37 and JPY 10.51 per KRW, respectively. ● Consolidation – Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rates prevailing at the balance sheet date. The results of operations are translated from KWR 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. As of June 30, 2022, and December 31, 2021, the exchange rate was KRW 1,292.90 and KRW 1,185.50 per US Dollar, respectively. The average exchange rate for the six months ended June 30, 2022 and 2021 was KRW 1,232.94 and KRW 1,117.73, 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: June 30, 2022 (RESTATED) December 31, 2021 Korea Current assets $ 10,551,277 $ 11,837,539 Non-current assets 2,004,368 1,965,469 Current liabilities 3,127,101 3,130,606 Japan Current assets $ 472,899 $ 603,171 Non-current assets 225 267 Current liabilities 320,046 385,511 Six-months Period Ended June 30, Three-months Period Ended June 30, 2022 2021 2022 2021 Korea Net Sales $ 4,744,892 $ 7,901,637 $ 2,527,454 $ 4,211,656 Japan Net Sales $ 575,406 $ 707,022 $ 327,216 $ 347,479 |
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 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. ● 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. |
Cash, Cash Equivalents | Cash, Cash Equivalents The Company considers all money market funds and highly liquid financial investments 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 $1,469,565 and $1,602,699 at June 30, 2022 and December 31, 2021, respectively, and expires on various days during 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 June 30, 2022 and December 31, 2021. The amount of restricted cash as of June 30, 2022 and December 31, 2021 was $1,469,565 and $1,602,699, 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 is included in selling, marketing, general and administrative expense in the consolidated statements of income and comprehensive income. At June 30, 2022 and December 31, 2021, allowance for doubtful accounts was approximately $873,000 and $645,000, 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 declining 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 three months ended June 30, 2022 and 2021 was $227,571 and $333,631, respectively and for the six months ended June 30, 2022 and 2021 was $427,879 and $596,256, 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 $106,087 and $129,333 for the three months ended June 30, 2022 and 2021, respectively, and $191,605 and $250,455 for the six months ended June 30, 2022 and 2021, 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 June 30, 2022 and December 31, 2021, 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 other 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 |
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 $263,942 and $30,431 as of June 30, 2022 and December 31, 2021, respectively. |
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 June 30, 2022 for the assets measured at fair value on a recurring basis: Level 1 Level 2 Level 3 (RESTATED) Available-for-sale securities $ - $ - $ 236,568 Common stock purchase warrant - - - Equity purchase put option - - - Fair value, at June 30, 2022 $ - $ - $ 236,568 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: Level 1 Level 2 Level 3 Available-for-sale securities $ - $ - $ 93,168 Common stock purchase warrant - - - Equity purchase put option - - - Fair value, at December 31, 2021 $ - $ - $ 93,168 |
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 $6,974 and $31,215 for the three months ended June 30, 2022 and 2021, respectively, and $11,764 and $65,909 for the six months ended June 30, 2022 and 2021, 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 and is adjusted at each reporting date for the net income (loss) attributable to that non-controlling interest during that period. |
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 $6,040 and $119,646 for the three months ended June 30, 2022 and 2021, respectively, and $79,612 and $343,751 for the six months ended June 30, 2022 and 2021, respectively. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements ● 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. This standard provides optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this standard apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this standard are elective and are effective upon issuance for all entities. The Company is evaluating the expedients and exceptions provided by the amendments in this standard to determine their impact. 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 June 30, 2021 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
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: June 30, 2022 (RESTATED) December 31, 2021 Korea Current assets $ 10,551,277 $ 11,837,539 Non-current assets 2,004,368 1,965,469 Current liabilities 3,127,101 3,130,606 Japan Current assets $ 472,899 $ 603,171 Non-current assets 225 267 Current liabilities 320,046 385,511 Six-months Period Ended June 30, Three-months Period Ended June 30, 2022 2021 2022 2021 Korea Net Sales $ 4,744,892 $ 7,901,637 $ 2,527,454 $ 4,211,656 Japan Net Sales $ 575,406 $ 707,022 $ 327,216 $ 347,479 |
Estimated Useful Lives of Property and Equipment | Property and equipment are recorded at cost. Depreciation of property and equipment is computed using the double declining 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 June 30, 2022 for the assets measured at fair value on a recurring basis: Level 1 Level 2 Level 3 (RESTATED) Available-for-sale securities $ - $ - $ 236,568 Common stock purchase warrant - - - Equity purchase put option - - - Fair value, at June 30, 2022 $ - $ - $ 236,568 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: Level 1 Level 2 Level 3 Available-for-sale securities $ - $ - $ 93,168 Common stock purchase warrant - - - Equity purchase put option - - - Fair value, at December 31, 2021 $ - $ - $ 93,168 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investments [Abstract] | |
Summary of Investment Securities | The following table summarize the Company’s investment securities: Available-for-sale securities Percentage of Ownership June 30, 2022 (RESTATED) December 31, 2021 4Grit 2.50 % $ 38,676 $ 42,180 E-channel 0.07 % $ 36,581 $ 39,895 KSFC 0.00 % $ 10,172 $ 11,093 MetaFlyer 40.00 % $ 151,139 - Total investment securities $ 236,568 $ 93,168 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of the following: June 30, 2022 December 31, 2021 Facilities $ 166,141 $ 181,193 Vehicles 29,017 39,055 Equipment 1,598,878 1,694,969 Government grants (26,826 ) (39,752 ) Total property and equipment 1,767,211 1,875,465 Less: accumulated depreciation (1,657,521 ) (1,770,020 ) Property and equipment, net $ 109,690 $ 105,445 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets [Abstract] | |
Intangible Assets | Intangible assets consist of the following: June 30, 2022 December 31, 2021 Patents $ 321,578 $ 338,361 Trademark 24,349 26,555 Start-Up Cost 1,183 1,291 Software 673,910 734,961 Government grants - (168 ) Total intangible assets 1,021,020 1,101,000 Less: Accumulated amortization (642,539 ) (662,219 ) Intangible assets, net $ 378,481 $ 438,781 |
Future Amortization Expense of Intangible Assets | Future amortization expense of the Company’s intangible assets at June 30, 2022 is expected to be as follows: Years ending December 31, 2022 (remaining six months) $ 53,944 2023 79,158 2024 78,392 2025 77,238 2026 68,038 Thereafter 21,711 Total $ 378,481 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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: Three-months Period Ended June 30, Six-months Period Ended June 30, Periods Ended 2022 (RESTATED) 2021 2022 (RESTATED) 2021 Net income (loss) before non-controlling interest $ (547,051 ) $ 1,008,808 $ (275,092 ) $ 733,927 Non-controlling interest (95,652 ) 391 (236,167 ) (498 ) Net income (loss) (451,399 ) 1,008,417 (38,925 ) 734,425 Weighted-average shares of common stock outstanding: Basic 35,030,339 35,030,339 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 35,030,339 35,030,339 Earnings per share - Basic Net income (loss) before non-controlling interest $ (0.02 ) $ 0.03 $ (0.01 ) $ 0.02 Non-controlling interest $ (0.00 ) $ 0.00 $ (0.01 ) $ (0.00 ) Earnings per share to stockholders $ (0.02 ) $ 0.03 $ (0.00 ) $ 0.02 Earnings per share - Diluted Net income (loss) before non-controlling interest $ (0.02 ) $ 0.03 $ (0.01 ) $ 0.02 Non-controlling interest $ (0.00 ) $ 0.00 $ (0.01 ) $ (0.00 ) Earnings per share to stockholders $ (0.02 ) $ 0.03 $ (0.00 ) $ 0.02 |
Restatement (Tables)
Restatement (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Restatement [Abstract] | |
Effects of Restatement on Consolidated Financial Statements | The following tables present the effects of the restatement on the accompanying consolidated financial statements at June 30, 2022: Condensed Consolidated Balance Sheet As of June 30, 2022 As Previously Reported Restated Non-Current Assets: Investment $ 240,120 $ 236,568 Total non current assets 2,008,145 2,004,593 Total Assets $ 13,032,321 $ 13,028,769 Stockholders' Equity: Accumulated other comprehensive loss (1,712,396 ) (1,440,069 ) Accumulated retained earnings 7,752,819 7,642,736 Total company stockholders' equity 9,047,818 9,210,062 Non-controlling interests (236,167 ) (401,963 ) Total stockholders' equity 9,905,220 9,901,668 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Three-month Period ended June 30, 2022 Six-month Period ended June 30, 2022 As Previously Reported Restated As Previously Reported Restated Other income (expense) Loss on deconsolidation $ - $ (100,772 ) $ - $ (100,772 ) Total other income (expense), net 31,814 (68,955 ) 1,005,965 905,196 Income (loss) before provision for income taxes, and non-controlling interest (406,088 ) (516,171 ) (134,129 ) (244,212 ) Net income (loss) before non-controlling interest (436,968 ) (547,051 ) (165,009 ) (275,092 ) Net income (loss) $ (341,316 ) $ (451,399 ) $ 71,158 $ (38,925 ) Comprehensive income statement: Net income (loss) $ (436,968 ) $ (547,051 ) $ (165,009 ) $ (275,092 ) Foreign currency translation loss (757,905 ) (485,578 ) (985,896 ) (713,569 ) Total comprehensive income (loss) $ (1,194,873 ) $ (1,032,629 ) $ (1,150,905 ) $ (988,661 ) Earnings per share - Basic Net income (loss) before non-controlling interest $ (0.01 ) $ (0.02 ) $ (0.01 ) $ (0.01 ) Non-controlling interest $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.01 ) Earnings per share to stockholders $ (0.01 ) $ (0.02 ) $ (0.01 ) $ (0.00 ) Earnings per share - Diluted Net income (loss) before non-controlling interest $ (0.01 ) $ (0.02 ) $ (0.01 ) $ (0.01 ) Non-controlling interest $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.01 ) Earnings per share to stockholders $ (0.01 ) $ (0.02 ) $ (0.01 ) $ (0.00 ) Condensed Consolidated Statement of Cash Flows Six Months ended June 30, 2022 As Previously Reported Restated Cash flows from operating activities: Net income (loss) $ 71,158 $ (38,925 ) Adjustments to reconcile net loss to net cash provided by operating activities: Loss on deconsolidation - 100,772 Net cash used in operating activities (1,521,472 ) (1,530,783 ) Cash flows from investing activities: Purchase of investments (162,214 ) (148,002 ) Net cash used in operating activities (388,785 ) (374,573 ) Effect of foreign currency translation on cash and cash equivalents (288,821 ) (293,722 ) |
Organization and Operations (De
Organization and Operations (Details) - USD ($) | 6 Months Ended | |||
Jun. 28, 2022 | Aug. 01, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | |
Organization and Operations [Abstract] | ||||
Total assets | $ 13,028,769 | $ 14,406,446 | ||
Subsidiaries [Member] | I-ON, Ltd [Member] | ||||
Organization and Operations [Abstract] | ||||
Total assets | $ 144,000 | |||
Ownership percentage | 99.50% | |||
Subsidiaries [Member] | eformworks Co., Ltd [Member] | ||||
Organization and Operations [Abstract] | ||||
Ownership percentage | 59.82% | |||
Contribution to subsidiary | $ 253,000 | $ 77,000 | ||
Subsidiaries [Member] | EIPGRID [Member] | ||||
Organization and Operations [Abstract] | ||||
Contribution to subsidiary | $ 773,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Principles of Consolidation and Basis of Presentation (Details) | Jun. 30, 2022 |
Subsidiaries [Member] | I-ON, Ltd [Member] | |
Principles of Consolidation and Presentation [Abstract] | |
Ownership percentage | 99.50% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Foreign Currency Transaction and Translation (Details) | 6 Months Ended | ||||||
Jun. 30, 2022 ₩ / ¥ | Jun. 30, 2022 ₩ / $ ₩ / ¥ | Jun. 30, 2021 ₩ / ¥ | Jun. 30, 2021 ₩ / $ | Jun. 30, 2022 ₩ / $ | Dec. 31, 2021 ₩ / ¥ | Dec. 31, 2021 ₩ / $ | |
Foreign Currency Transaction and Translation [Abstract] | |||||||
Foreign currency exchange rate | 9.46 | 9.46 | 1,292.9 | 10.02 | 1,185.5 | ||
Average exchange rate for the period | 10.37 | 1,232.94 | 10.51 | 1,117.73 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Segment Reporting (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) Area | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) Area | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting [Abstract] | |||||
Number of geographic areas | Area | 2 | 2 | |||
Consolidated Financial Statements by Geographic Areas [Abstract] | |||||
Current assets | $ 11,024,176 | $ 11,024,176 | $ 12,440,710 | ||
Non-current assets | 2,004,593 | 2,004,593 | 1,965,736 | ||
Current liabilities | 3,127,101 | 3,127,101 | 3,516,117 | ||
Net sales | 2,854,670 | $ 4,559,135 | 5,320,298 | $ 8,608,659 | |
Reportable Geographical Areas [Member] | Korea [Member] | |||||
Consolidated Financial Statements by Geographic Areas [Abstract] | |||||
Current assets | 10,551,277 | 10,551,277 | 11,837,539 | ||
Non-current assets | 2,004,368 | 2,004,368 | 1,965,469 | ||
Current liabilities | 3,127,101 | 3,127,101 | 3,130,606 | ||
Net sales | 2,527,454 | 4,211,656 | 4,744,892 | 7,901,637 | |
Reportable Geographical Areas [Member] | Japan [Member] | |||||
Consolidated Financial Statements by Geographic Areas [Abstract] | |||||
Current assets | 472,899 | 472,899 | 603,171 | ||
Non-current assets | 225 | 225 | 267 | ||
Current liabilities | 320,046 | 320,046 | $ 385,511 | ||
Net sales | $ 327,216 | $ 347,479 | $ 575,406 | $ 707,022 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies, Restricted Cash (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Cash, Cash Equivalents, and Restricted Cash [Abstract] | ||
Restricted cash, restricted for loans with the financial institutions | $ 1,469,565 | $ 1,602,699 |
Restricted cash | $ 1,469,565 | $ 1,602,699 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies, Accounts Receivable (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts Receivable [Abstract] | ||
Allowance for doubtful accounts | $ 873,000 | $ 645,000 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies, Property and Equipment (Details) | 6 Months Ended |
Jun. 30, 2022 | |
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_10
Summary of Significant Accounting Policies, Research and Development (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Research and Development [Abstract] | ||||
Research and development cost | $ 227,571 | $ 333,631 | $ 427,879 | $ 596,256 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies, Intangible Assets (Details) | 6 Months Ended |
Jun. 30, 2022 | |
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_12
Summary of Significant Accounting Policies, Severance and Retirement Benefits (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Severance and Retirement Benefits [Abstract] | ||||
Minimum service to receive lump-sum payment | 1 year | |||
Defined contribution plans cost | $ 106,087 | $ 129,333 | $ 191,605 | $ 250,455 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies, Government Grants (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Government Grants [Abstract] | ||
Government grants outstanding | $ 263,942 | $ 30,431 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies, Fair Value Measurements (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Assets Measured at Fair Value on Recurring Basis [Abstract] | ||
Available-for-sale securities | $ 236,568 | $ 93,168 |
Recurring [Member] | Level 1 [Member] | ||
Assets Measured at Fair Value on Recurring Basis [Abstract] | ||
Available-for-sale securities | 0 | 0 |
Common stock purchase warrant | 0 | 0 |
Equity purchase put option | 0 | 0 |
Fair value | 0 | 0 |
Recurring [Member] | Level 2 [Member] | ||
Assets Measured at Fair Value on Recurring Basis [Abstract] | ||
Available-for-sale securities | 0 | 0 |
Common stock purchase warrant | 0 | 0 |
Equity purchase put option | 0 | 0 |
Fair value | 0 | 0 |
Recurring [Member] | Level 3 [Member] | ||
Assets Measured at Fair Value on Recurring Basis [Abstract] | ||
Available-for-sale securities | 236,568 | 93,168 |
Common stock purchase warrant | 0 | 0 |
Equity purchase put option | 0 | 0 |
Fair value | $ 236,568 | $ 93,168 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies, Advertising (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Advertising [Abstract] | ||||
Advertising expense | $ 6,974 | $ 31,215 | $ 11,764 | $ 65,909 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies, Employee Stock Based Compensation (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Employee Stock Based Compensation [Abstract] | |
Vesting period | 3 years |
Summary of Significant Accou_17
Summary of Significant Accounting Policies, Value Added Tax (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Value Added Tax [Abstract] | ||||
Value added tax rate | 10% | 10% | ||
Value added tax paid | $ 6,040 | $ 119,646 | $ 79,612 | $ 343,751 |
Investments (Details)
Investments (Details) - USD ($) | Mar. 01, 2022 | Jun. 30, 2022 | May 19, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Investment Securities [Abstract] | |||||
Investment securities | $ 236,568 | $ 93,168 | |||
Available-for-sale [Member] | 4Grit [Member] | |||||
Investment Securities [Abstract] | |||||
Percentage of ownership | 2.50% | 2.50% | |||
Investment securities | $ 38,676 | $ 42,180 | |||
Available-for-sale [Member] | E-channel [Member] | |||||
Investment Securities [Abstract] | |||||
Percentage of ownership | 0.07% | 0.07% | |||
Investment securities | $ 36,581 | $ 39,895 | |||
Available-for-sale [Member] | KSFC [Member] | |||||
Investment Securities [Abstract] | |||||
Percentage of ownership | 0% | 0% | |||
Investment securities | $ 10,172 | $ 11,093 | |||
Available-for-sale [Member] | MetaFlyer [Member] | |||||
Investment Securities [Abstract] | |||||
Percentage of ownership | 40% | 40% | |||
Investment securities | $ 151,139 | $ 0 | |||
Subsidiaries [Member] | MetaFlyer [Member] | |||||
Investment Securities [Abstract] | |||||
Percentage of ownership | 66.70% | 40% | 66.67% | ||
Contribution to subsidiary | $ 165,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Components of Property and Equipment [Abstract] | |||||
Government grants | $ (26,826) | $ (26,826) | $ (39,752) | ||
Property and equipment | 1,767,211 | 1,767,211 | 1,875,465 | ||
Less: accumulated depreciation | (1,657,521) | (1,657,521) | (1,770,020) | ||
Property and equipment, net | 109,690 | 109,690 | 105,445 | ||
Deprecation expense | 27,077 | $ 9,460 | 26,122 | $ 35,923 | |
Facilities [Member] | |||||
Components of Property and Equipment [Abstract] | |||||
Property and equipment before government grants | 166,141 | 166,141 | 181,193 | ||
Vehicles [Member] | |||||
Components of Property and Equipment [Abstract] | |||||
Property and equipment before government grants | 29,017 | 29,017 | 39,055 | ||
Equipment [Member] | |||||
Components of Property and Equipment [Abstract] | |||||
Property and equipment before government grants | $ 1,598,878 | $ 1,598,878 | $ 1,694,969 |
Intangible Assets, Summary (Det
Intangible Assets, Summary (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Intangible Assets [Abstract] | |||||
Government grants | $ 0 | $ 0 | $ (168) | ||
Total intangible assets | 1,021,020 | 1,021,020 | 1,101,000 | ||
Less: Accumulated amortization | (642,539) | (642,539) | (662,219) | ||
Intangible assets, net | 378,481 | 378,481 | 438,781 | ||
Amortization expense | 18,079 | $ 7,817 | 36,886 | $ 15,752 | |
Patents [Member] | |||||
Intangible Assets [Abstract] | |||||
Intangible assets before government grants | 321,578 | 321,578 | 338,361 | ||
Trademark [Member] | |||||
Intangible Assets [Abstract] | |||||
Intangible assets before government grants | 24,349 | 24,349 | 26,555 | ||
Start-Up Cost [Member] | |||||
Intangible Assets [Abstract] | |||||
Intangible assets before government grants | 1,183 | 1,183 | 1,291 | ||
Software [Member] | |||||
Intangible Assets [Abstract] | |||||
Intangible assets before government grants | $ 673,910 | $ 673,910 | $ 734,961 |
Intangible Assets, Future Amort
Intangible Assets, Future Amortization Expense of Intangible Assets (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Future Amortization Expense [Abstract] | ||
2022 (remaining six months) | $ 53,944 | |
2023 | 79,158 | |
2024 | 78,392 | |
2025 | 77,238 | |
2026 | 68,038 | |
Thereafter | 21,711 | |
Intangible assets, net | $ 378,481 | $ 438,781 |
Short Term Loan Payable (Detail
Short Term Loan Payable (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Short Term Loan [Abstract] | ||
Short-term loan, outstanding | $ 309,382 | $ 337,410 |
Short Term Loan [Member] | ||
Short Term Loan [Abstract] | ||
Short-term loan, interest rate | 2.58% | |
Short-term loan, maturity date | Jul. 15, 2023 | |
Short-term loan, outstanding | $ 309,000 | $ 337,000 |
Miscellaneous Income (Details)
Miscellaneous Income (Details) | Feb. 09, 2022 USD ($) |
Miscellaneous Income [Abstract] | |
Funds received related to Collaborative R&D Program | $ 941,118 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Royalty [Abstract] | ||||
Royalty agreement extension period | 5 years | |||
Operating Leases [Abstract] | ||||
Rent expense | $ 33,274 | $ 37,452 | $ 68,130 | $ 75,152 |
Maximum [Member] | ||||
Royalty [Abstract] | ||||
Term of royalty agreement | 20 years |
Related Party Transactions (Det
Related Party Transactions (Details) - Metaflyer [Member] - USD ($) $ in Thousands | Mar. 25, 2022 | Mar. 02, 2022 |
Related Party Transactions [Abstract] | ||
Contract fee | $ 154 | |
Prepaid expense received | $ 77 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) before non-controlling interest | $ (547,051) | $ 1,008,808 | $ (275,092) | $ 733,927 |
Non-controlling interest | (95,652) | 391 | (236,167) | (498) |
Net income (loss) | $ (451,399) | $ 1,008,417 | $ (38,925) | $ 734,425 |
Weighted-average shares of common stock outstanding [Abstract] | ||||
Basic (in shares) | 35,030,339 | 35,030,339 | 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 | 0 | 0 |
Dilutive shares (in shares) | 35,030,339 | 35,030,339 | 35,030,339 | 35,030,339 |
Earnings per share - Basic [Abstract] | ||||
Net income (loss) before non-controlling interest (in dollars per share) | $ (0.02) | $ 0.03 | $ (0.01) | $ 0.02 |
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 |
Earnings per share to stockholders (in dollars per share) | (0.02) | 0.03 | 0 | 0.02 |
Earnings per share - Diluted [Abstract] | ||||
Net income (loss) before non-controlling interest (in dollars per share) | (0.02) | 0.03 | (0.01) | 0.02 |
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 |
Earnings per share to stockholders (in dollars per share) | $ (0.02) | $ 0.03 | $ 0 | $ 0.02 |
Non-vested antidilutive awards (in shares) | 0 | 0 |
Non-Controlling Interest-Issu_2
Non-Controlling Interest-Issuance of Preferred Stock by Subsidiaries (Details) - Redeemable Convertible Preferred Stock [Member] - Subsidiaries [Member] | Nov. 22, 2021 KRW (₩) ₩ / shares shares | Apr. 09, 2019 KRW (₩) ₩ / shares shares |
I-ON, Ltd. [Member] | ||
Non-Controlling Interest-Issuance of Preferred Stock by Subsidiary [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% | |
Conversion price (in dollars per share) | ₩ 3,500 | |
Call option premium | 7% | |
e.form Works Co., Ltd. [Member] | ||
Non-Controlling Interest-Issuance of Preferred Stock by Subsidiary [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% | |
Conversion price (in dollars per share) | ₩ 1,653 | |
Call option premium | 6% |
Termination of Merger Agreeme_2
Termination of Merger Agreement (Details) | Aug. 29, 2021 USD ($) | Apr. 28, 2021 $ / shares shares | Jun. 30, 2022 $ / shares | Dec. 31, 2021 $ / 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) | 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 | 0.10 | |||
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) | shares | 25,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Expenses reimbursed | $ | $ 28,600 |
Deconsolidation of Metaflyer (D
Deconsolidation of Metaflyer (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
May 19, 2022 | Mar. 01, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | |
Deconsolidation, Gain (Loss) with Related Disclosures [Abstract] | |||||||
Recognized loss on deconsolidation | $ (100,772) | $ 0 | $ (100,772) | $ 0 | |||
MetaFlyer [Member] | |||||||
Deconsolidation, Gain (Loss) with Related Disclosures [Abstract] | |||||||
Recognized loss on deconsolidation | $ 100,772 | ||||||
Fair value of retained equity method investment | 151,140 | ||||||
Carrying amount of net assets | $ 251,912 | ||||||
MetaFlyer [Member] | Subsidiaries [Member] | |||||||
Deconsolidation, Gain (Loss) with Related Disclosures [Abstract] | |||||||
Contribution to subsidiary | $ 165,000 | ||||||
Percentage of ownership | 40% | 66.70% | 66.67% |
Restatement, Condensed Consolid
Restatement, Condensed Consolidated Balance Sheet (Details) | May 19, 2022 Entity | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) |
Non-current assets [Abstract] | |||||||
Investments | $ 236,568 | $ 93,168 | |||||
Total non-current assets | 2,004,593 | 1,965,736 | |||||
Total Assets | 13,028,769 | 14,406,446 | |||||
Stockholders' Equity [Abstract] | |||||||
Accumulated other comprehensive loss | (1,440,069) | (726,500) | |||||
Accumulated retained earnings | 7,642,736 | 7,681,661 | |||||
Total company stockholders' equity | 9,210,062 | 9,962,556 | |||||
Non-controlling interests | (401,963) | (165,796) | |||||
Total stockholders' equity | 9,901,668 | $ 11,100,093 | $ 10,890,329 | $ 9,483,201 | $ 8,462,960 | $ 9,295,981 | |
As Previously Reported [Member] | |||||||
Non-current assets [Abstract] | |||||||
Investments | 240,120 | ||||||
Total non-current assets | 2,008,145 | ||||||
Total Assets | 13,032,321 | ||||||
Stockholders' Equity [Abstract] | |||||||
Accumulated other comprehensive loss | (1,712,396) | ||||||
Accumulated retained earnings | 7,752,819 | ||||||
Total company stockholders' equity | 9,047,818 | ||||||
Non-controlling interests | (236,167) | ||||||
Total stockholders' equity | $ 9,905,220 | ||||||
Metaflyer [Member] | |||||||
Deconsolidation [Abstract] | |||||||
Number of deconsolidated subsidiaries | Entity | 1 |
Restatement, Condensed Consol_2
Restatement, Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Other income (expense) [Abstract] | ||||||
Loss on deconsolidation | $ (100,772) | $ 0 | $ (100,772) | $ 0 | ||
Total other income (expense), net | (68,955) | (9,758) | 905,196 | 3,229 | ||
Income (loss) before provision for income taxes, and non-controlling interest | (516,171) | 1,040,634 | (244,212) | 806,510 | ||
Net income (loss) before non-controlling interest | (547,051) | 1,008,808 | (275,092) | 733,927 | ||
Net income (loss) | (451,399) | 1,008,417 | (38,925) | 734,425 | ||
Comprehensive income statement [Abstract] | ||||||
Net income (loss) | (547,051) | 1,008,808 | (275,092) | 733,927 | ||
Foreign currency translation loss | (485,578) | $ (227,991) | 11,433 | $ (558,140) | (713,569) | (546,707) |
Total comprehensive income (loss) | $ (1,032,629) | $ 1,020,241 | $ (988,661) | $ 187,220 | ||
Earnings Per Share, Basic [Abstract] | ||||||
Net income (loss) before non-controlling interest (in dollars per share) | $ (0.02) | $ 0.03 | $ (0.01) | $ 0.02 | ||
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 | ||
Earnings per share to stockholders (in dollars per share) | (0.02) | 0.03 | 0 | 0.02 | ||
Earnings Per Share, Diluted [Abstract] | ||||||
Net loss before non-controlling interest (in dollars per share) | (0.02) | 0.03 | (0.01) | 0.02 | ||
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 | ||
Earnings per share to stockholders (in dollars per share) | $ (0.02) | $ 0.03 | $ 0 | $ 0.02 | ||
As Previously Reported [Member] | ||||||
Other income (expense) [Abstract] | ||||||
Loss on deconsolidation | $ 0 | $ 0 | ||||
Total other income (expense), net | 31,814 | 1,005,965 | ||||
Income (loss) before provision for income taxes, and non-controlling interest | (406,088) | (134,129) | ||||
Net income (loss) before non-controlling interest | (436,968) | (165,009) | ||||
Net income (loss) | (341,316) | 71,158 | ||||
Comprehensive income statement [Abstract] | ||||||
Net income (loss) | (436,968) | (165,009) | ||||
Foreign currency translation loss | (757,905) | (985,896) | ||||
Total comprehensive income (loss) | $ (1,194,873) | $ (1,150,905) | ||||
Earnings Per Share, Basic [Abstract] | ||||||
Net income (loss) before non-controlling interest (in dollars per share) | $ (0.01) | $ (0.01) | ||||
Non-controlling interest (in dollars per share) | 0 | 0 | ||||
Earnings per share to stockholders (in dollars per share) | (0.01) | (0.01) | ||||
Earnings Per Share, Diluted [Abstract] | ||||||
Net loss before non-controlling interest (in dollars per share) | (0.01) | (0.01) | ||||
Non-controlling interest (in dollars per share) | 0 | 0 | ||||
Earnings per share to stockholders (in dollars per share) | $ (0.01) | $ (0.01) |
Restatement, Condensed Consol_3
Restatement, Condensed Consolidated Statement of Cash Flows (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities [Abstract] | ||||
Net income (loss) | $ (451,399) | $ 1,008,417 | $ (38,925) | $ 734,425 |
Adjustments to reconcile net loss to net cash provided by operating activities [Abstract] | ||||
Loss on deconsolidation | 100,772 | $ 0 | 100,772 | 0 |
Net cash used in operating activities | (1,530,783) | (769,791) | ||
Cash flows from investing activities [Abstract] | ||||
Purchase of investments | (148,002) | 0 | ||
Net cash used in investing activities | (374,573) | (46,721) | ||
Effect of foreign currency translation on cash and cash equivalents | (293,722) | $ (395,426) | ||
As Previously Reported [Member] | ||||
Cash flows from operating activities [Abstract] | ||||
Net income (loss) | (341,316) | 71,158 | ||
Adjustments to reconcile net loss to net cash provided by operating activities [Abstract] | ||||
Loss on deconsolidation | $ 0 | 0 | ||
Net cash used in operating activities | (1,521,472) | |||
Cash flows from investing activities [Abstract] | ||||
Purchase of investments | (162,214) | |||
Net cash used in investing activities | (388,785) | |||
Effect of foreign currency translation on cash and cash equivalents | $ (288,821) |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Thousands | Sep. 29, 2022 shares | Sep. 28, 2022 USD ($) Vote $ / shares shares | Jun. 30, 2022 $ / shares | Dec. 31, 2021 $ / shares |
Securities Purchase Agreement [Abstract] | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.438 | $ 0.438 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Subsequent Event [Member] | ||||
Spin-Off of I-On Communications Co., Ltd. [Abstract] | ||||
Numbers of shares of common stock issued upon spin-off agreement (in shares) | shares | 15,306,119 | |||
Subsequent Event [Member] | Series B Convertible Preferred Stock [Member] | ||||
Securities Purchase Agreement [Abstract] | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Preferred stock, shares common stock to be issued to each share of preferred stock upon conversion (in shares) | shares | 1,000 | |||
Preferred stock, number of votes to which each share of preferred stock is entitled | Vote | 1,000 | |||
Number of shares of preferred stock to be issued to purchasers (in shares) | shares | 6,000 | |||
Subsequent Event [Member] | I-ON Acquisition Corp. [Member] | Series A Convertible Preferred Stock [Member] | ||||
Securities Purchase Agreement [Abstract] | ||||
Number of shares sold (in shares) | shares | 3,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Proceeds from issuance of preferred stock | $ | $ 250 | |||
Preferred stock, shares common stock to be issued to each share of preferred stock upon conversion (in shares) | shares | 10,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Preferred stock, number of votes to which each share of preferred stock is entitled | Vote | 100 |