Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Jan. 10, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
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 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | IONI | |
Security Exchange Name | NONE | |
Entity Common Stock, Shares Outstanding | 19,724,220 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 0 | $ 0 |
Restricted cash | 0 | 0 |
Short-term financial instruments | 0 | 0 |
Short-term loan receivable | 0 | 0 |
Accounts receivables, net of allowance for doubtful accounts $0 and $645,335, respectively | 0 | 0 |
Deferred tax assets - current | 0 | 0 |
Prepaid expenses and other current assets | 0 | 0 |
Current assets of discontinued operations | 0 | 12,440,710 |
Total current assets | 0 | 12,440,710 |
Non-current assets: | ||
Investments | 0 | 0 |
Property and equipment, net | 0 | 0 |
Intangible assets, net | 0 | 0 |
Deposits | 0 | 0 |
Deferred tax assets - non current | 0 | 0 |
Non-current assets of discontinued operations | 0 | 1,965,736 |
Total non-current assets | 0 | 1,965,736 |
Total Assets | 0 | 14,406,446 |
Current liabilities: | ||
Accounts payable | 0 | 0 |
Accrued expenses and other | 0 | 0 |
Value added tax payable | 0 | 0 |
Income tax payable | 0 | 0 |
Short-term loan payable | 0 | 0 |
Government grants outstanding for usage of future projects | 0 | 0 |
Current liabilities of discontinued operations | 0 | 3,516,117 |
Total current liabilities | 0 | 3,516,117 |
Total liabilities | 0 | 3,516,117 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Common stock - $0.0001 par value; authorized 100,000,000 shares; 19,724,220 shares and 35,030,339 issued and outstanding at September 30, 2022 and December 31, 2021 | 1,972 | 3,503 |
Treasury stock | 0 | (709,478) |
Additional paid-in-capital | 2,689,391 | 3,713,370 |
Accumulated other comprehensive loss | (2,417,920) | (726,500) |
Accumulated retained earnings | (273,443) | 7,681,661 |
Total company stockholders' equity | 0 | 9,962,556 |
Preferred stock (I-ON Korea and eformworks) - $0.4380 par value; authorized 2,000,000 shares; zero share issued and outstanding at September 30, 2022 and 600,742 shares issued and outstanding at December 31, 2021 | 0 | 1,093,569 |
Non-controlling interests | 0 | (165,796) |
Total stockholders' equity | 0 | 10,890,329 |
Total Liabilities and Stockholders' Equity | $ 0 | $ 14,406,446 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Accounts receivables, allowance for doubtful accounts | $ 0 | $ 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) | 19,724,220 | 35,030,339 |
Common stock, shares outstanding (in shares) | 19,724,220 | 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) | 0 | 600,742 |
Preferred stock, outstanding (in shares) | 0 | 600,742 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) [Abstract] | ||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 |
Cost of goods sold | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Operating expense | 0 | 0 | 0 | 0 |
Income (loss) from operations | 0 | 0 | 0 | 0 |
Other income (expense) | 0 | 0 | 0 | 0 |
Income (loss) before provision for income taxes | 0 | 0 | 0 | 0 |
Provision for (benefit from) income tax | 0 | 0 | 0 | 0 |
Net income (loss) from continuing operations | 0 | 0 | 0 | 0 |
Net income (loss) from discontinued operations | (43,079) | 982,009 | (217,399) | 1,715,936 |
Net income (loss) | (43,079) | 982,009 | (217,399) | 1,715,936 |
Comprehensive income statement: | ||||
Net income (loss) | (43,079) | 982,009 | (217,399) | 1,715,936 |
Foreign currency translation loss | (977,851) | (468,727) | (1,691,420) | (1,015,434) |
Total comprehensive income (loss) | $ (1,020,930) | $ 513,282 | $ (1,908,819) | $ 700,502 |
Basic earnings per share from continuing operations | ||||
Net income (loss) before non-controlling interest (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Non-controlling interest (in dollars per share) | 0 | 0 | 0 | 0 |
Earnings per share to stockholders (in dollars per share) | 0 | 0 | 0 | 0 |
Diluted earnings per share from continuing operations | ||||
Net income (loss) before non-controlling interest (in dollars per share) | 0 | 0 | 0 | 0 |
Non-controlling interest (in dollars per share) | 0 | 0 | 0 | 0 |
Earnings per share to stockholders (in dollars per share) | 0 | 0 | 0 | 0 |
Basic earnings per share from discontinued operations | ||||
Net income (loss) before non-controlling interest (in dollars per share) | 0 | 0.03 | (0.01) | 0.05 |
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 |
Earnings per share to stockholders (in dollars per share) | 0 | 0.03 | 0 | 0.05 |
Diluted earnings per share from discontinued operations | ||||
Net income (loss) before non-controlling interest (in dollars per share) | 0 | 0.03 | (0.01) | 0.05 |
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 |
Earnings per share to stockholders (in dollars per share) | $ 0 | $ 0.03 | $ 0 | $ 0.05 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 19,724,220 | 35,030,339 | 19,724,220 | 35,030,339 |
Diluted (in shares) | 19,724,220 | 35,030,339 | 19,724,220 | 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 | $ 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 | (1,015,434) | ||||||||
Balance at Sep. 30, 2021 | $ 3,503 | 3,713,370 | 7,234,130 | (709,478) | (725,501) | 9,516,024 | 5,423 | 475,036 | 9,996,483 |
Balance (in shares) at Sep. 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 | $ 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 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Foreign currency translation | $ 0 | 0 | 0 | 0 | (468,727) | (468,727) | 0 | 0 | (468,727) |
Net income (loss) | 0 | 0 | 981,920 | 0 | 0 | 981,920 | 89 | 0 | 982,009 |
Balance at Sep. 30, 2021 | $ 3,503 | 3,713,370 | 7,234,130 | (709,478) | (725,501) | 9,516,024 | 5,423 | 475,036 | 9,996,483 |
Balance (in shares) at Sep. 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 | $ 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 | (1,691,420) | ||||||||
Balance at Sep. 30, 2022 | $ 1,972 | 2,689,391 | (273,443) | 0 | (2,417,920) | 0 | 0 | 0 | 0 |
Balance (in shares) at Sep. 30, 2022 | 19,724,220 | ||||||||
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 | $ 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 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Cancellation of common stock in connection with equity purchase agreement | $ (1,531) | 0 | 0 | 0 | 0 | (1,531) | 0 | 0 | (1,531) |
Cancellation of common stock in connection with equity purchase agreement (in shares) | (15,306,119) | ||||||||
Adjustments from deconsolidation | $ 0 | (1,023,979) | (7,910,040) | 709,478 | 0 | (8,224,542) | 438,904 | (1,093,569) | (8,879,207) |
Foreign currency translation | 0 | 0 | 0 | 0 | (977,851) | (977,851) | 0 | 0 | (977,851) |
Net income (loss) | 0 | 0 | (6,138) | 0 | 0 | (6,138) | (36,941) | 0 | (43,079) |
Balance at Sep. 30, 2022 | $ 1,972 | $ 2,689,391 | $ (273,443) | $ 0 | $ (2,417,920) | $ 0 | $ 0 | $ 0 | $ 0 |
Balance (in shares) at Sep. 30, 2022 | 19,724,220 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (217,399) | $ 1,715,936 |
Less: Net income (loss) from discontinued operations | (217,399) | 1,715,936 |
Net income (loss) from continuing operations | 0 | 0 |
Net cash used in operating activities from continuing operations | 0 | 0 |
Net cash used in operating activities from discontinued operations | (729,207) | (1,053,228) |
Total net cash used in operating activities | (729,207) | (1,053,228) |
Cash flows from investing activities: | ||
Net cash used in investing activities from continuing operations | 0 | 0 |
Net cash used in investing activities from discontinued operations | (3,915,775) | (48,523) |
Total net cash used in investing activities | (3,915,775) | (48,523) |
Cash flows from financing activities: | ||
Net cash provided by (used in) financing activities from continuing operations | 0 | 0 |
Net cash provided by (used in) financing activities from discontinued operations | 57,616 | (297,463) |
Total net cash used in financing activities | 57,616 | (297,463) |
Effect of foreign currency translation on cash and cash equivalents | (721,278) | (626,102) |
Net decrease in cash and cash equivalents | (5,308,644) | (2,025,316) |
Cash and cash equivalents including restricted cash, beginning of period | 5,308,644 | 6,267,652 |
Cash and cash equivalents including restricted cash, end of period | 0 | 4,242,336 |
Continuing operations: | ||
Interest paid | 0 | 0 |
Taxes paid | 0 | 0 |
Discontinued operations: | ||
Interest paid | 6,218 | 10,866 |
Taxes paid | $ 13,667 | $ 15,760 |
Organization and Operations
Organization and Operations | 9 Months Ended |
Sep. 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). 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 September 30, 2022 . On June 28, 2022, the board of directors of the Company’s wholly-owned subsidiary I-ON Communications, Ltd. (“Communications”) approved to form a new subsidiary named EIPGRID, which provides the community energy service platforms. Hence Communications will contribute approximately $773,000 to EIPGRID to subscribe for its founders’ shares, and has considered a subsidiary to consolidate. 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 Hong Rae 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. Accordingly, the operating results of Communications are reported in net loss from discontinued operations, net of income taxes in the Condensed Consolidated Statements of Operations for all periods presented. In addition, the related assets and liabilities held prior to the spin-off are reported as Assets and Liabilities of Discontinued Operations on the Condensed Consolidated Balance Sheets. All amounts and disclosures included in the Notes to Condensed Consolidated Financial Statements reflect only the Company's continuing operations unless otherwise noted. For additional information, see Note 3, "Discontinued Operations." |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 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 the Company and its subsidiaries. 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 September 30, 2022, and December 31, 2021, the exchange rate was JPY 9.32 and JPY 10.30 per KRW, respectively. The average exchange rate for the nine months ended September 30, 2022 and 2021 was JPY 9.91 and JPY 10.41 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 September 30, 2022, and December 31, 2021, the exchange rate was KRW 1,434.8 and KRW 1,185.50 per US Dollar, respectively. The average exchange rate for the nine months ended September 30, 2022 and 2021 was KRW 1,268.9 and KRW 1,131.01, respectively. Segment Reporting FASB ASC 280, Segment Reporting 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 and 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. 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. 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. 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 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. 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. 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. Recently Issued Accounting Pronouncements 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. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | NOTE 3: Discontinued Operations On September 29, 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 shares of the Company’s Common Stock held by Jae Cheol Oh and Hong Rae 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. As a result of the Spin-Off, Communications ceased being a subsidiary of the Company. Accordingly, the operating results of Communications are reported in net income (loss) from discontinued operations, net of income taxes in the Condensed Consolidated Statements of Operations for all periods presented. In addition, the related assets and liabilities held prior to the spin-off are reported as Assets and Liabilities of Discontinued Operations on the Condensed Consolidated Balance Sheets. The following table presents the components of discontinued operations in relation to Communications reported in the consolidated statements of operations: Three Months Ended September Nine Months Ended September 2022 2021 2022 2021 Net Sales 2,258,387 3,616,267 7,578,685 12,224,926 Operating costs and expenses 3,103,957 3,225,490 9,573,663 11,030,868 Income (loss) from operations before other income and income taxes (845,570 ) 390,777 (1,994,978 ) 1,194,058 Other income (loss) 801,613 12,210 1,807,581 15,439 Income (loss) from operations before income taxes (43,957 ) 402,987 (187,397 ) 1,209,497 Income tax (878 ) (579,022 ) 30,002 (506,439 ) Net income from discontinued operations (43,079 ) 982,009 (217,399 ) 1,715,936 The following table presents the major classes of assets and liabilities of discontinued operations of Communications reported in the consolidated balance sheets: September 2022 December 2021 Cash and cash equivalents $ - $ 3,705,945 Restricted cash - 1,602,699 Short-term financial instruments - 716,154 Short-term loan receivable - 126,529 Accounts receivables, net of allowance for doubtful accounts $ 0 645,335 - 5,299,951 Deferred tax assets - current - 410,259 Prepaid expenses and other current assets - 579,173 Total current assets of discontinued operations - 12,440,710 Investments - 93,168 Property and equipment, net - 105,445 Intangible assets, net - 438,781 Deposits - 737,909 Deferred tax assets – non-current - 590,433 Total non-current assets of discontinued operations - 1,965,736 Accounts payable $ - $ 320,251 Accrued expenses and other - 2,546,062 Value added tax payable - 202,857 Income tax payable - 79,106 Short-term loan payable - 337,410 Government grants outstanding for usage of future projects - 30,431 Total current liabilities of discontinued operations - 3,516,117 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 4: 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 September 30, Nine-months Period Ended September 30, Periods Ended 2022 2021 2022 2021 Net income (loss) $ (43,079 ) $ 982,009 $ (217,399 ) $ 1,715,936 Net income (loss) from continuing operations - - - - Net income (loss) from discontinued operations (43,079 ) 982,009 (217,399 ) 1,715,936 Weighted-average shares of common stock outstanding: Basic 19,724,220 35,030,339 19,724,220 35,030,339 Dilutive effect of common stock equivalents arising from share option, excluding antidilutive effect from loss - - - - Dilutive shares 19,724,220 35,030,339 19,724,220 35,030,339 Net income (loss) from continuing operations: Earnings per share - Basic Net income (loss) before non-controlling interest $ 0.00 $ 0.00 $ 0.00 $ 0.00 Non-controlling interest $ 0.00 $ 0.00 $ 0.00 $ 0.00 Earnings per share to stockholders $ 0.00 $ 0.00 $ 0.00 $ 0.00 Earnings per share - Diluted Net income (loss) before non-controlling interest $ 0.00 $ 0.00 $ 0.00 $ 0.00 Non-controlling interest $ 0.00 $ 0.00 $ 0.00 $ 0.00 Earnings per share to stockholders $ 0.00 $ 0.00 $ 0.00 $ 0.00 Net income (loss) from discontinued operations: Earnings per share - Basic Net income (loss) before non-controlling interest $ 0.00 $ 0.03 $ (0.01 ) $ 0.05 Non-controlling interest $ 0.00 $ 0.00 $ (0.01 ) $ 0.00 Earnings per share to stockholders $ 0.00 $ 0.03 $ 0.00 $ 0.05 Earnings per share - Diluted Net income (loss) before non-controlling interest $ 0.00 $ 0.03 $ (0.01 ) $ 0.05 Non-controlling interest $ 0.00 $ 0.00 $ (0.01 ) $ 0.00 Earnings per share to stockholders $ 0.00 $ 0.03 $ 0.00 $ 0.05 No non-vested share awards or non-vested share unit awards were antidilutive for the nine months ended September 30, 2022 and 2021. |
Deconsolidation of Subsidiaries
Deconsolidation of Subsidiaries | 9 Months Ended |
Sep. 30, 2022 | |
Deconsolidation of Subsidiaries [Abstract] | |
Deconsolidation of Subsidiaries | NOTE 5: Deconsolidation of Subsidiaries As of the Spin-off date, which was September 29, 2022, the Company had approximately $12.6 million of total assets and $3.6 million of total liabilities on its consolidated balance sheet. Those assets and liabilities were owned by Communications or Communications’ subsidiaries, such as I-ON, Ltd (Japanese subsidiary), eformworks Co., Ltd. (Korean subsidiary) and EIPGRID (Korean subsidiary). As a result of the Spin-off Agreement, all assets and liabilities will be transferred to JFJ and the Company will remain as a shell company with no operating assets or liabilities in its financial statements. Mr. Oh and Kim returned their shares of the Company, total 15,306,119 approximately 43% of total outstanding shares, to the Company in exchange for the transfer of all of outstanding equity of Communications to JFJ. Stock price on September 29, 2022 was $0.067; therefore, the fair market value the proceeds will be $1,025,510 which was calculated by multiplying the number of shares transferred to the stock price on September 29, 2022. In accordance with FASB ASC 805, Business Combinations |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 6: 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 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 the Company and its subsidiaries. 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 September 30, 2022, and December 31, 2021, the exchange rate was JPY 9.32 and JPY 10.30 per KRW, respectively. The average exchange rate for the nine months ended September 30, 2022 and 2021 was JPY 9.91 and JPY 10.41 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 September 30, 2022, and December 31, 2021, the exchange rate was KRW 1,434.8 and KRW 1,185.50 per US Dollar, respectively. The average exchange rate for the nine months ended September 30, 2022 and 2021 was KRW 1,268.9 and KRW 1,131.01, respectively. |
Segment Reporting | Segment Reporting FASB ASC 280, Segment Reporting |
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 and Cash Equivalents | Cash and 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. |
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. |
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. |
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 |
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. |
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. |
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. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
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 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | The following table presents the components of discontinued operations in relation to Communications reported in the consolidated statements of operations: Three Months Ended September Nine Months Ended September 2022 2021 2022 2021 Net Sales 2,258,387 3,616,267 7,578,685 12,224,926 Operating costs and expenses 3,103,957 3,225,490 9,573,663 11,030,868 Income (loss) from operations before other income and income taxes (845,570 ) 390,777 (1,994,978 ) 1,194,058 Other income (loss) 801,613 12,210 1,807,581 15,439 Income (loss) from operations before income taxes (43,957 ) 402,987 (187,397 ) 1,209,497 Income tax (878 ) (579,022 ) 30,002 (506,439 ) Net income from discontinued operations (43,079 ) 982,009 (217,399 ) 1,715,936 The following table presents the major classes of assets and liabilities of discontinued operations of Communications reported in the consolidated balance sheets: September 2022 December 2021 Cash and cash equivalents $ - $ 3,705,945 Restricted cash - 1,602,699 Short-term financial instruments - 716,154 Short-term loan receivable - 126,529 Accounts receivables, net of allowance for doubtful accounts $ 0 645,335 - 5,299,951 Deferred tax assets - current - 410,259 Prepaid expenses and other current assets - 579,173 Total current assets of discontinued operations - 12,440,710 Investments - 93,168 Property and equipment, net - 105,445 Intangible assets, net - 438,781 Deposits - 737,909 Deferred tax assets – non-current - 590,433 Total non-current assets of discontinued operations - 1,965,736 Accounts payable $ - $ 320,251 Accrued expenses and other - 2,546,062 Value added tax payable - 202,857 Income tax payable - 79,106 Short-term loan payable - 337,410 Government grants outstanding for usage of future projects - 30,431 Total current liabilities of discontinued operations - 3,516,117 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 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 September 30, Nine-months Period Ended September 30, Periods Ended 2022 2021 2022 2021 Net income (loss) $ (43,079 ) $ 982,009 $ (217,399 ) $ 1,715,936 Net income (loss) from continuing operations - - - - Net income (loss) from discontinued operations (43,079 ) 982,009 (217,399 ) 1,715,936 Weighted-average shares of common stock outstanding: Basic 19,724,220 35,030,339 19,724,220 35,030,339 Dilutive effect of common stock equivalents arising from share option, excluding antidilutive effect from loss - - - - Dilutive shares 19,724,220 35,030,339 19,724,220 35,030,339 Net income (loss) from continuing operations: Earnings per share - Basic Net income (loss) before non-controlling interest $ 0.00 $ 0.00 $ 0.00 $ 0.00 Non-controlling interest $ 0.00 $ 0.00 $ 0.00 $ 0.00 Earnings per share to stockholders $ 0.00 $ 0.00 $ 0.00 $ 0.00 Earnings per share - Diluted Net income (loss) before non-controlling interest $ 0.00 $ 0.00 $ 0.00 $ 0.00 Non-controlling interest $ 0.00 $ 0.00 $ 0.00 $ 0.00 Earnings per share to stockholders $ 0.00 $ 0.00 $ 0.00 $ 0.00 Net income (loss) from discontinued operations: Earnings per share - Basic Net income (loss) before non-controlling interest $ 0.00 $ 0.03 $ (0.01 ) $ 0.05 Non-controlling interest $ 0.00 $ 0.00 $ (0.01 ) $ 0.00 Earnings per share to stockholders $ 0.00 $ 0.03 $ 0.00 $ 0.05 Earnings per share - Diluted Net income (loss) before non-controlling interest $ 0.00 $ 0.03 $ (0.01 ) $ 0.05 Non-controlling interest $ 0.00 $ 0.00 $ (0.01 ) $ 0.00 Earnings per share to stockholders $ 0.00 $ 0.03 $ 0.00 $ 0.05 |
Organization and Operations (De
Organization and Operations (Details) - USD ($) | 9 Months Ended | |||
Sep. 29, 2022 | Jun. 28, 2022 | Aug. 01, 2021 | Sep. 30, 2022 | |
Organization and Operations [Abstract] | ||||
Numbers of shares of common stock issued upon spin-off agreement (in shares) | 15,306,119 | |||
Subsidiaries [Member] | ||||
Organization and Operations [Abstract] | ||||
Numbers of shares of common stock issued upon spin-off agreement (in shares) | 15,306,119 | |||
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, Foreign Currency Transaction and Translation (Details) | 9 Months Ended | ||||||
Sep. 30, 2022 ₩ / ¥ | Sep. 30, 2022 ₩ / ¥ ₩ / $ | Sep. 30, 2021 ₩ / ¥ | Sep. 30, 2021 ₩ / $ | Sep. 30, 2022 ₩ / $ | Dec. 31, 2021 ₩ / ¥ | Dec. 31, 2021 ₩ / $ | |
Foreign Currency Transaction and Translation [Abstract] | |||||||
Foreign currency exchange rate | 9.32 | 9.32 | 1,434.8 | 10.3 | 1,185.5 | ||
Average exchange rate for the period | 9.91 | 1,268.9 | 10.41 | 1,131.01 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Property and Equipment (Details) | 9 Months Ended |
Sep. 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 Accoun_6
Summary of Significant Accounting Policies, Intangible Assets (Details) | 9 Months Ended |
Sep. 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 Accoun_7
Summary of Significant Accounting Policies, Severance and Retirement Benefits (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Severance and Retirement Benefits [Abstract] | |
Minimum service to receive lump-sum payment | 1 year |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies, Employee Stock Based Compensation (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Employee Stock Based Compensation [Abstract] | |
Vesting period | 3 years |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 29, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Discontinued Operations [Abstract] | ||||||
Numbers of shares of common stock issued upon spin-off agreement (in shares) | 15,306,119 | |||||
Discontinued Operations, Consolidated Statements of Operations [Abstract] | ||||||
Net sales | $ 2,258,387 | $ 3,616,267 | $ 7,578,685 | $ 12,224,926 | ||
Operating costs and expenses | 3,103,957 | 3,225,490 | 9,573,663 | 11,030,868 | ||
Income (loss) from operations before other income and income taxes | (845,570) | 390,777 | (1,994,978) | 1,194,058 | ||
Other income (loss) | 801,613 | 12,210 | 1,807,581 | 15,439 | ||
Income (loss) from operations before income taxes | (43,957) | 402,987 | (187,397) | 1,209,497 | ||
Income tax | (878) | (579,022) | 30,002 | (506,439) | ||
Net income from discontinued operations | (43,079) | $ 982,009 | (217,399) | $ 1,715,936 | ||
Discontinued Operations, Consolidated Balance Sheets [Abstract] | ||||||
Cash and cash equivalents | 0 | 0 | $ 3,705,945 | |||
Restricted cash | 0 | 0 | 1,602,699 | |||
Short-term financial instruments | 0 | 0 | 716,154 | |||
Short-term loan receivable | 0 | 0 | 126,529 | |||
Accounts receivables, net of allowance for doubtful accounts $0 and $645,335, respectively | 0 | 0 | 5,299,951 | |||
Deferred tax assets - current | 0 | 0 | 410,259 | |||
Prepaid expenses and other current assets | 0 | 0 | 579,173 | |||
Total current assets of discontinued operations | 0 | 0 | 12,440,710 | |||
Investments | 0 | 0 | 93,168 | |||
Property and equipment, net | 0 | 0 | 105,445 | |||
Intangible assets, net | 0 | 0 | 438,781 | |||
Deposits | 0 | 0 | 737,909 | |||
Deferred tax assets - non-current | 0 | 0 | 590,433 | |||
Total non-current assets of discontinued operations | 0 | 0 | 1,965,736 | |||
Accounts payable | 0 | 0 | 320,251 | |||
Accrued expenses and other | 0 | 0 | 2,546,062 | |||
Value added tax payable | 0 | 0 | 202,857 | |||
Income tax payable | 0 | 0 | 79,106 | |||
Short-term loan payable | 0 | 0 | 337,410 | |||
Government grants outstanding for usage of future projects | 0 | 0 | 30,431 | |||
Total current liabilities of discontinued operations | 0 | 0 | 3,516,117 | |||
Accounts receivables, allowance for doubtful accounts | $ 0 | $ 0 | $ 645,335 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ (43,079) | $ 982,009 | $ (217,399) | $ 1,715,936 |
Net income (loss) from continuing operations | 0 | 0 | 0 | 0 |
Net income (loss) from discontinued operations | $ (43,079) | $ 982,009 | $ (217,399) | $ 1,715,936 |
Weighted-average shares of common stock outstanding [Abstract] | ||||
Basic (in shares) | 19,724,220 | 35,030,339 | 19,724,220 | 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) | 19,724,220 | 35,030,339 | 19,724,220 | 35,030,339 |
Earnings per share - Basic [Abstract] | ||||
Net income (loss) before non-controlling interest (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Non-controlling interest (in dollars per share) | 0 | 0 | 0 | 0 |
Earnings per share to stockholders (in dollars per share) | 0 | 0 | 0 | 0 |
Earnings per share - Diluted [Abstract] | ||||
Net income (loss) before non-controlling interest (in dollars per share) | 0 | 0 | 0 | 0 |
Non-controlling interest (in dollars per share) | 0 | 0 | 0 | 0 |
Earnings per share to stockholders (in dollars per share) | 0 | 0 | 0 | 0 |
Earnings per share - Basic [Abstract] | ||||
Net income (loss) before non-controlling interest (in dollars per share) | 0 | 0.03 | (0.01) | 0.05 |
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 |
Earnings per share to stockholders (in dollars per share) | 0 | 0.03 | 0 | 0.05 |
Earnings per share - Diluted [Abstract] | ||||
Net income (loss) before non-controlling interest (in dollars per share) | 0 | 0.03 | (0.01) | 0.05 |
Non-controlling interest (in dollars per share) | 0 | 0 | (0.01) | 0 |
Earnings per share to stockholders (in dollars per share) | $ 0 | $ 0.03 | $ 0 | $ 0.05 |
Non-vested antidilutive awards (in shares) | 0 | 0 |
Deconsolidation of Subsidiari_2
Deconsolidation of Subsidiaries (Details) - USD ($) | Sep. 29, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Deconsolidation of Subsidiaries [Abstract] | |||
Total assets | $ 0 | $ 14,406,446 | |
Total liabilities | $ 0 | $ 3,516,117 | |
Numbers of shares of common stock issued upon spin-off agreement (in shares) | 15,306,119 | ||
Subsidiaries [Member] | |||
Deconsolidation of Subsidiaries [Abstract] | |||
Total assets | $ 12,600,000 | ||
Total liabilities | $ 3,600,000 | ||
Numbers of shares of common stock issued upon spin-off agreement (in shares) | 15,306,119 | ||
Percentage of common stock received upon spin-off | 43% | ||
Stock price (in dollars per share) | $ 0.067 | ||
Fair market value of stock | $ 1,025,510 |