Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 10, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | RYVYL INC. | |
Trading Symbol | RVYL | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 52,382,865 | |
Amendment Flag | false | |
Entity Central Index Key | 0001419275 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-34294 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 22-3962936 | |
Entity Address, Address Line One | 3131 Camino Del Rio North, Suite 1400 | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92108 | |
City Area Code | 619 | |
Local Phone Number | -631-8261 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 13,166 | $ 13,961 |
Restricted cash | 50,760 | 26,873 |
Accounts receivable, net of allowance of $111 and $82, respectively | 649 | 1,156 |
Cash due from gateways, net of allowance of $842 and $9,326, respectively | 6,982 | 7,427 |
Prepaid and other current assets | 2,305 | 9,798 |
Total current assets | 73,862 | 59,215 |
Non-current Assets: | ||
Property and equipment, net | 1,636 | 1,696 |
Other assets | 1,978 | 197 |
Goodwill | 26,753 | 26,753 |
Intangible assets, net | 6,298 | 6,739 |
Operating lease right-of-use assets, net | 3,985 | 1,533 |
Investments | 913 | 1,524 |
Total non-current assets | 41,563 | 38,442 |
Total Assets | 115,425 | 97,657 |
Current Liabilities: | ||
Accounts payable | 12,792 | 1,630 |
Other current liabilities | 4,445 | 3,662 |
Accrued interest | 2,234 | 1,728 |
Payment processing liabilities, net | 45,607 | 28,912 |
Short-term notes payable | 15 | 14 |
Derivative liability | 584 | 255 |
Current portion of operating lease liabilities | 358 | 534 |
Total current liabilities | 66,035 | 36,735 |
Long-term debt, net of debt discount | 66,940 | 61,735 |
Operating lease liabilities, less current portion | 3,833 | 1,109 |
Total liabilities | 136,808 | 99,579 |
Commitments and contingencies | ||
Stockholders’ Equity / (Deficit): | ||
Common stock, par value $0.001, 82,500,000 shares authorized, shares issued and outstanding of 51,963,779 and 49,727,355, respectively | 51 | 49 |
Common stock issuable, par value $0.001 | 0 | 2 |
Additional paid-in capital | 96,570 | 96,271 |
Deferred stock compensation | (67) | 0 |
Accumulated other comprehensive income | 1,525 | 1,596 |
Accumulated deficit | (119,462) | (99,772) |
Less: Shares to be returned | 0 | (68) |
Total stockholders’ equity / (deficit) | (21,383) | (1,922) |
Total liabilities and stockholders’ equity / (deficit) | $ 115,425 | $ 97,657 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance (in Dollars) | $ 111 | $ 82 |
Cash due from gateways, allowance (in Dollars) | $ 842 | $ 9,326 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 82,500,000 | 82,500,000 |
Common stock shares issued | 51,963,779 | 49,727,355 |
Common stock, shares outstanding | 51,963,779 | 49,727,355 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 14,849 | $ 6,966 | $ 26,140 | $ 11,176 |
Cost of Goods Sold | 8,725 | 4,230 | 14,903 | 7,010 |
Gross Profit | 6,124 | 2,736 | 11,237 | 4,166 |
Operating expenses: | ||||
Advertising and marketing | 33 | 527 | 108 | 668 |
Research and development | 1,184 | 1,920 | 3,119 | 3,858 |
General and administrative | 4,055 | 1,354 | 5,508 | 3,146 |
Payroll and payroll taxes | 2,913 | 2,712 | 5,627 | 5,096 |
Professional fees | 2,989 | 1,168 | 4,792 | 2,672 |
Stock compensation expense | (32) | 1,715 | 161 | 1,882 |
Stock compensation for services | 0 | 79 | 0 | 206 |
Depreciation and amortization | 623 | 2,127 | 1,242 | 2,581 |
Total operating expenses | 11,765 | 11,602 | 20,557 | 20,109 |
Loss from operations | (5,641) | (8,866) | (9,320) | (15,943) |
Other income (expense): | ||||
Interest expense | (1,517) | (1,783) | (3,246) | (5,613) |
Interest expense - debt discount | (2,821) | (5,582) | (5,443) | (13,172) |
Derecognition expense upon conversion of convertible debt | (188) | 0 | (188) | 0 |
Loss on settlement of debt | 0 | (757) | 0 | (1,657) |
Changes in fair value of derivative liability | (497) | 26,435 | (329) | 18,735 |
Merchant fines and penalty income | 0 | 37 | 0 | 82 |
Other income or expense | (1,337) | 2,531 | (1,447) | 235 |
Total other income (expense), net | (6,360) | 20,881 | (10,653) | (1,390) |
Income (loss) before income tax provision (benefit) | (12,001) | 12,015 | (19,973) | (17,333) |
Income tax provision (benefit) | 4 | (77) | 9 | 2 |
Net Income (loss) | (12,005) | 12,092 | (19,982) | (17,335) |
Comprehensive income statement: | ||||
Net income (loss) | (12,005) | 12,092 | (19,982) | (17,335) |
Foreign currency translation loss | (13) | (398) | (71) | (398) |
Total comprehensive income (loss) | $ (12,018) | $ 11,694 | $ (20,053) | $ (17,733) |
Net loss per share: | ||||
Basic and diluted (in Dollars per share) | $ (0.23) | $ 0.28 | $ (0.39) | $ (0.56) |
Weighted average number of common shares outstanding: | ||||
Basic and diluted (in Shares) | 51,417,099 | 42,977,461 | 51,287,902 | 31,208,102 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Restricted Stock [Member] Common Stock [Member] | Restricted Stock [Member] Additional Paid-in Capital [Member] | Restricted Stock [Member] Deferred Compensation, Share-Based Payments [Member] | Restricted Stock [Member] | Interest Expense [Member] Common Stock [Member] | Interest Expense [Member] Common Stock to be Issued [Member] | Interest Expense [Member] Additional Paid-in Capital [Member] | Interest Expense [Member] | Common Stock [Member] | Common Stock to be Issued [Member] | Common Stock to be Returned [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Deferred Compensation, Share-Based Payments [Member] | Treasury Stock, Common [Member] | Total |
Balance at Dec. 31, 2021 | $ 43 | $ (9,852) | $ 94,748 | $ (50,537) | $ (4,934) | $ 29,468 | |||||||||||
Balance (in Shares) at Dec. 31, 2021 | 43,546,647 | (1,436,888) | (714,831) | ||||||||||||||
Common stock issued for services | 126 | 126 | |||||||||||||||
Common stock issued for services (in Shares) | 30,508 | 8,905 | |||||||||||||||
Common stock issued for shareholder | $ 1 | (1) | |||||||||||||||
Common stock issued for shareholder (in Shares) | 33,333 | 533,333 | |||||||||||||||
Stock compensation expense | 167 | 167 | |||||||||||||||
Net income (loss) | (29,427) | (29,427) | |||||||||||||||
Common stock issued for stock options exercised | 5 | 5 | |||||||||||||||
Common stock issued for stock options exercised (in Shares) | 12,417 | ||||||||||||||||
Common stock contributed and cancelled from shareholder | $ 6,989 | (6,686) | $ (3,539) | (3,237) | |||||||||||||
Common stock contributed and cancelled from shareholder (in Shares) | (333,333) | 800,000 | (1,483,755) | ||||||||||||||
Common stock issued - acquisition of Sky assets | $ 1 | 2,110 | 2,110 | ||||||||||||||
Common stock issued - acquisition of Sky assets (in Shares) | 500,000 | ||||||||||||||||
Common stock shares contributed by shareholder | $ (1) | 1 | |||||||||||||||
Common stock shares contributed by shareholder (in Shares) | (500,000) | ||||||||||||||||
Balance at Mar. 31, 2022 | $ 43 | $ 1 | $ (2,863) | 90,470 | (79,964) | $ (8,473) | (786) | ||||||||||
Balance (in Shares) at Mar. 31, 2022 | 43,289,572 | 542,238 | (636,888) | (2,198,586) | |||||||||||||
Balance at Dec. 31, 2021 | $ 43 | $ (9,852) | 94,748 | (50,537) | $ (4,934) | 29,468 | |||||||||||
Balance (in Shares) at Dec. 31, 2021 | 43,546,647 | (1,436,888) | (714,831) | ||||||||||||||
Net income (loss) | $ (17,335) | ||||||||||||||||
Common stock issued for stock options exercised (in Shares) | 12,417 | ||||||||||||||||
Net loss and comprehensive loss | $ (17,733) | ||||||||||||||||
Balance at Jun. 30, 2022 | $ 44 | $ 1 | $ (68) | 90,905 | (67,872) | $ (303) | 22,707 | ||||||||||
Balance (in Shares) at Jun. 30, 2022 | 44,600,527 | 754,423 | (136,888) | (1,300,000) | |||||||||||||
Balance at Mar. 31, 2022 | $ 43 | $ 1 | $ (2,863) | 90,470 | (79,964) | $ (8,473) | (786) | ||||||||||
Balance (in Shares) at Mar. 31, 2022 | 43,289,572 | 542,238 | (636,888) | (2,198,586) | |||||||||||||
Common stock issued for services | 79 | 79 | |||||||||||||||
Common stock issued for services (in Shares) | 24,184 | (8,905) | |||||||||||||||
Net income (loss) | 12,092 | 12,092 | |||||||||||||||
Common stock contributed and cancelled from shareholder | $ (1) | $ 2,795 | (10,964) | $ 8,170 | |||||||||||||
Common stock contributed and cancelled from shareholder (in Shares) | (1,398,586) | 500,000 | 898,586 | ||||||||||||||
Common stock issued - acquisition of Sky assets | $ 1 | $ (1) | |||||||||||||||
Common stock issued - acquisition of Sky assets (in Shares) | 500,000 | (500,000) | |||||||||||||||
Common stock shares contributed by shareholder | $ (1) | $ 1 | |||||||||||||||
Common stock shares contributed by shareholder (in Shares) | (500,000) | 500,000 | |||||||||||||||
Common stock issued to employees for compensation | 1,496 | 1,496 | |||||||||||||||
Common stock issued to employees for compensation (in Shares) | 272,257 | 221,090 | |||||||||||||||
Common stock issued for conversion of convertible debt | $ 2 | 9,824 | 9,826 | ||||||||||||||
Common stock issued for conversion of convertible debt (in Shares) | 2,413,100 | ||||||||||||||||
Net loss and comprehensive loss | 11,694 | ||||||||||||||||
Balance at Jun. 30, 2022 | $ 44 | $ 1 | $ (68) | 90,905 | (67,872) | $ (303) | 22,707 | ||||||||||
Balance (in Shares) at Jun. 30, 2022 | 44,600,527 | 754,423 | (136,888) | (1,300,000) | |||||||||||||
Balance at Dec. 31, 2022 | $ 49 | $ 2 | $ (68) | 96,271 | $ 1,596 | (99,772) | (1,922) | ||||||||||
Balance (in Shares) at Dec. 31, 2022 | 49,727,355 | 1,753,916 | (136,888) | ||||||||||||||
Common stock issued to employees for compensation | $ 78 | 31 | 31 | ||||||||||||||
Common stock issued to employees for compensation (in Shares) | (8,909) | ||||||||||||||||
Common stock issued for conversion of convertible debt | $ 2 | $ (2) | |||||||||||||||
Common stock issued for conversion of convertible debt (in Shares) | 1,753,916 | (1,753,916) | |||||||||||||||
Carryover effects of financial statement restatements in prior periods | 294 | 294 | |||||||||||||||
Share repurchase | $ 68 | (68) | |||||||||||||||
Share repurchase (in Shares) | (136,712) | 136,888 | |||||||||||||||
Net loss and comprehensive loss | (58) | (7,979) | (8,037) | ||||||||||||||
Balance at Mar. 31, 2023 | $ 51 | 96,234 | 1,538 | (107,457) | (9,634) | ||||||||||||
Balance (in Shares) at Mar. 31, 2023 | 51,335,650 | ||||||||||||||||
Balance at Dec. 31, 2022 | $ 49 | $ 2 | $ (68) | 96,271 | 1,596 | (99,772) | (1,922) | ||||||||||
Balance (in Shares) at Dec. 31, 2022 | 49,727,355 | 1,753,916 | (136,888) | ||||||||||||||
Net income (loss) | $ (19,982) | ||||||||||||||||
Common stock issued for stock options exercised (in Shares) | 0 | ||||||||||||||||
Net loss and comprehensive loss | $ (20,053) | ||||||||||||||||
Balance at Jun. 30, 2023 | $ 51 | 96,570 | 1,525 | (119,462) | $ (67) | (21,383) | |||||||||||
Balance (in Shares) at Jun. 30, 2023 | 51,963,779 | ||||||||||||||||
Balance at Mar. 31, 2023 | $ 51 | 96,234 | 1,538 | (107,457) | (9,634) | ||||||||||||
Balance (in Shares) at Mar. 31, 2023 | 51,335,650 | ||||||||||||||||
Net income (loss) | (12,005) | ||||||||||||||||
Common stock issued to employees for compensation | $ 100 | $ (67) | $ 33 | 130 | 130 | ||||||||||||
Common stock issued to employees for compensation (in Shares) | 131,658 | 95,103 | |||||||||||||||
Common stock issued for conversion of convertible debt | $ 5 | $ 5 | $ 1 | 416 | 416 | ||||||||||||
Common stock issued for conversion of convertible debt (in Shares) | 7,377 | 562,641 | |||||||||||||||
Share repurchase | (315) | (315) | |||||||||||||||
Share repurchase (in Shares) | (168,650) | ||||||||||||||||
Net loss and comprehensive loss | (13) | (12,005) | (12,018) | ||||||||||||||
Balance at Jun. 30, 2023 | $ 51 | $ 96,570 | $ 1,525 | $ (119,462) | $ (67) | $ (21,383) | |||||||||||
Balance (in Shares) at Jun. 30, 2023 | 51,963,779 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands, € in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Cash flows from operating activities: | ||||||
Net loss | $ (12,005) | $ 12,092 | $ (29,427) | $ (19,982) | $ (17,335) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
Depreciation and amortization expense | 1,242 | 2,581 | ||||
Noncash lease expense | 67 | 79 | ||||
Stock compensation expense | (32) | 1,715 | 161 | 1,882 | ||
Common stock issued for professional fees | 0 | 206 | ||||
Interest expense - debt discount | 5,443 | 13,172 | ||||
Derecognition upon conversion of note payable | 188 | 0 | ||||
Changes in fair value of derivative liability | 329 | (18,735) | ||||
Loss on settlement of debt | 0 | 757 | 0 | 1,657 | ||
Changes in assets and liabilities: | ||||||
Accounts receivable, net | 507 | (138) | ||||
Prepaid and other current assets | 7,366 | (1,053) | ||||
Cash due from gateways | 445 | 1,018 | ||||
Other assets | (1,781) | 35 | ||||
Accounts payable | 11,161 | (2,269) | ||||
Other current liabilities | 782 | 732 | ||||
Accrued interest | 506 | 2,349 | ||||
Payment processing liabilities | 16,695 | 18,914 | ||||
Net cash provided by operating activities | 23,129 | 3,095 | ||||
Cash flows from investing activities: | ||||||
Purchases of property and equipment | (17) | (87) | ||||
Purchase of intangibles | 0 | (661) | ||||
Cash provided for Transact Europe Holdings OOD acquisition | 0 | (28,811) | ||||
Cash provided for Sky Financial & Intelligence asset acquisition | 0 | (16,000) | ||||
Net cash used in investing activities | (17) | (45,559) | ||||
Cash flows from financing activities: | ||||||
Treasury stock purchases | 0 | (3,237) | ||||
Proceeds from stock option exercises | 0 | 5 | ||||
Repayments on convertible debt | 0 | (6,000) | ||||
Repayments on long-term debt | (7) | 0 | ||||
Net cash used in financing activities | (7) | (9,232) | ||||
Restricted cash acquired from Transact Europe | 0 | 18,677 | ||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 23,105 | (33,019) | ||||
Foreign currency translation adjustment | (13) | (915) | ||||
Cash, cash equivalents, and restricted cash – beginning of period | $ 89,559 | 40,834 | 89,559 | $ 89,559 | ||
Cash, cash equivalents, and restricted cash – end of period | $ 63,926 | $ 55,625 | 63,926 | 55,625 | $ 40,834 | |
Cash paid during the period for: | ||||||
Interest | 2,709 | 3,127 | ||||
Income taxes | 0 | 0 | ||||
Non-cash financing and investing activities: | ||||||
Convertible debt conversion to common stock | 300 | 2,110 | ||||
Interest accrual from convertible debt converted to common stock | $ 3 | $ 0 |
Description of the Business and
Description of the Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. Description of the Business and Basis of Presentation Organization RYVYL Inc (the “Company”) is a financial technology company that develops, markets, and sells innovative blockchain-based payment solutions, which offer significant improvements for the payment solutions marketplace. The Company’s core focus is developing and monetizing disruptive blockchain-based applications, integrated within an end-to-end suite of financial products, capable of supporting a multitude of industries. The Company’s proprietary, blockchain-based systems are designed to facilitate, record, and store a limitless volume of tokenized assets, representing cash or data, on a secured, immutable blockchain-based ledger. The Company was formerly known as ASAP Expo, Inc (“ASAP”), and was incorporated in the State of Nevada on April 10, 2007. On January 4, 2020, PubCo and GreenBox POS LLC, a Washington limited liability company (“PrivCo”), entered into an Asset Purchase Agreement (the “Agreement”) On April 12, 2018, the Company acquired PrivCo’s blockchain gateway and payment system business, point of sale system business, delivery business, kiosk business, bank and merchant accounts, as well as all intellectual property related thereto (the “GreenBox Business”). As consideration for the GreenBox Business, on April 12, 2018, the Company assumed PrivCo’s liabilities that were incurred in the normal course of the GreenBox Business. On May 3, 2018, the Company formally changed its name to GreenBox POS. LLC, then subsequently changed its name to GreenBox POS on December 13, 2018. On October 13, 2022, GreenBox POS changed its name to RYVYL Inc. On May 21, 2021, the Company acquired all of the outstanding stock of Northeast Merchant Systems, Inc. (“Northeast”) in a transaction treated as a business combination. Northeast is a merchant services company providing merchant credit card processing through its own Bank Identification Number (BIN) with the acquiring Bank Merrick. On July 13, 2021 (the “Closing Date”), the Company entered into and closed on a Membership Interest Purchase Agreement with Charge Savvy LLC, an Illinois limited liability company (“Charge Savvy”), and Charge Savvy’s three members (collectively, the “Sellers”). One of the Sellers, Ken Haller, was an employee of the Company on the Closing Date. As a result of the purchase agreement, the Company purchased all of Charge Savvy’s issued and outstanding membership interests from the Sellers and Charge Savvy became a wholly owned subsidiary of the Company. The consideration consisted of 1,000,000 shares of the Company’s common stock, par value $0.001 per share being issued and delivered to the Sellers in proportion to the Sellers’ share of their membership interests in Charge Savvy. The share price at issuance was $12.14. Charge Savvy is a fintech company specializing in developing software and providing payment processing and point-of-sale services to the merchant services industry. Charge Savvy owns the 64,000 square foot office building in Chicago, Illinois, where it is headquartered. On April 1, 2022, the Company completed the acquisition of Transact Europe Holdings OOD. Transact Europe EAD (“TEU”) is an EU- regulated electronic money institution headquartered in Sofia, Bulgaria. TEU is a Principal Level Member of Visa, a Worldwide Member of MasterCard, and a Principal Member of China UnionPay. In addition, TEU is part of the direct Single Euro Payments Area (“SEPA”) program. With a global footprint, proprietary payment gateway, and technology platforms, TEU offers a comprehensive portfolio of services and decades of industry experience. The Company paid $28.8 million (€26.0 million) in total consideration for the purchase. Please refer to Note 15 entitled “ Subsequent Events Basis of Presentation and Consolidation The accompanying interim consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. Unaudited Interim Financial Information Certain information and footnote disclosures normally included in the Company’s annual audited financial statements and accompanying notes have been condensed or omitted in this accompanying interim consolidated financial statements and footnotes. Accordingly, the accompanying interim consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2022. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | 2. Summary of Significant Accounting Policies The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited consolidated financial statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flows. Cash, Cash Equivalents and Restricted Cash The Company’s cash, cash equivalents and restricted cash represents the following: ● Cash and cash equivalents ● Restricted cash Cash Due from Gateways and Payment Processing Liabilities The Company’s primary source of revenues consists of payment processing services for its merchant clients. When a merchant makes a sale, the process of receiving the payment card information, engaging the banks for transferring the proceeds to the merchant’s account via digital gateways, and recording the transaction on a blockchain ledger are the activities for which the Company collects fees. The Company utilized several gateways during the six-months ended June 30, 2023 and the year ended December 31, 2022. These gateways have strict guidelines pertaining to scheduling of the release of funds to merchants which are based on several criteria, such as, and among other things, return and chargeback history, associated risks for specific business verticals, and average transaction size. To mitigate processing risks, these policies determine reserve requirements and payment-in-arrears strategies. While reserve and payment-in-arrears restrictions are in effect for a merchant payout, the Company records receivables from the gateways against these amounts until released. Cash due from gateways balances presented in the accompanying consolidated balance sheets represent the amount due to the Company for transactions processed wherein the funds have not been distributed. Research and Development Costs Research and development costs are expensed as incurred. They consist primarily of salaries and benefits for research and development personnel, outsourced contracted services, as well as associated supplies and materials. Revenue Recognition Revenue is recognized upon transfer of control of promised goods or services to the Company’s customers or when the Company satisfies any performance obligations under contract. The amount of revenue represents consideration the Company expects to be entitled to in exchange for the respective goods or services provided. Under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, The Company’s primary revenue source is generated from payment processing services. Payment processing services revenue is based on a percentage of each transaction’s value and/or upon fixed amounts specified per each transaction or service and is recognized as such transactions or services are performed, at a point in time. Accounts Receivable and Allowance for Credit Losses The Company maintains an allowance for credit losses for estimated losses from the inability of gateways to make required payments. The allowance for credit losses is evaluated periodically based on the aging of accounts receivable, the operational relationship with gateways and their payment history, historical charge-off experience and other assumptions, such as current assessment of economic conditions. Prepaid Expenses Prepaid expenses primarily consist of deposits made with credit card companies under Transact Europe Holdings OOD and the prepayment associated with other acquisitions. Property and Equipment Property and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets, which range from three to eight years. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is recognized in the period the transaction occurs. Fair Value of Financial Instruments The Company assesses the fair value of financial instruments based on the provisions of ASC 820, Fair Value Measurements ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1- Quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than Level 1 prices 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 full 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. The following table describes the valuation techniques used to calculate the fair value for assets in Level 3. The significant unobservable input used in the fair value measurement of the Company’s identifiable intangible assets is the discount rate. The change in this input could result in a change of fair value measurement (dollars in thousands): Fair Value at June 30, 2023 Customer relationships $ 4,683 Business intellectual properties 1,615 Derivative Liability 584 Fair Value at December 31, 2022 Customer relationships $ 4,857 Business intellectual properties 1,882 Derivative liability 255 Goodwill and Other Intangible Assets The Company accounts for acquisitions of businesses in accordance with the acquisition method of accounting which requires assets and liabilities to be recognized at their fair values on the acquisition date. Goodwill represents the excess of the purchase price of acquired businesses over the fair value of the identifiable assets acquired and liabilities assumed. Acquisition costs are expensed as incurred. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform an annual impairment testing for its reporting units on December 31 of each fiscal year. Goodwill and other intangible assets acquired in a business combination determined to have an indefinite useful life are generally not amortized, but instead are tested for impairment at least annually and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. Other intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values. Impairment of Long-Lived Assets The Company follows ASC 360 in accounting for finite-lived intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. As of June 30, 2023, the Company determined there were no indicators of impairment of its intangible assets. Long-lived assets are reviewed for impairment whenever management believes that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. To the extent that the carrying value is determined to be unrecoverable, an impairment loss is recognized through a charge to expense. As of June 30, 2023, other than a charge-off of the entire consideration paid in connection with the contracted acquisition of the Sky Financial portfolio, the Company performed an impairment analysis on the other acquired goodwill and other long-lived assets and concluded that their values are supportable and recoverable. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all the deferred tax assets will not be realized. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. We recognize an income 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 taxing authorities, based on the technical merits of the position. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As of June 30, 2023, and December 31, 2022, we have valuation allowances which serve to reduce net deferred tax assets. Earnings Per Share Basic income or (loss) per share is computed by dividing net income or loss by the weighted average number of common shares outstanding for the periods presented. Diluted earnings per share includes the effect of any potentially dilutive debt or equity under the treasury stock method, if including such instruments is dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the years ended December 31, 2022, and three and six-month periods ended June 30, 2023, and 2022, since there are no common stock equivalents outstanding that would have a dilutive effect. Leases On February 25, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the net present value of lease payments for all lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statements of operations and statements of changes in cash flows. ASC 842 supersedes nearly all existing lease accounting guidance under GAAP issued by the FASB including ASC Topic 840, Leases. For operating leases, we calculated right-of-use assets and lease liabilities based on the net present value of the remaining lease payments as of the adoption date using our incremental borrowing rate as of that date. Segment Reporting The Company has organized its operations into two segments: North America and International. These segments reflect the way management evaluates its business performance and manages its operations. Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. Management has determined that the operational data used by our CODM is that of the two reportable segments. Management bases strategic goals and decisions on these segments. Management evaluates the performance of its segments and allocates resources based on operating income or loss as compared to prior periods and current performance levels. Recent Accounting Standard Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses Recent Accounting Standards and Guidance Not Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers The FASB issued ASU 2020-06 (“Update”) to simplify the accounting for convertible instruments by eliminating large sections of the existing guidance in this area. It also eliminates several triggers for derivative accounting, including a requirement to settle certain contracts by delivering registered shares. These changes are intended to make GAAP easier to apply and, therefore, reduce the frequency of errors in this part of the literature. Early adoption is permitted for fiscal years beginning after December 15, 2020. For SEC filers, excluding smaller reporting companies, this Update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, this Update is effective for fiscal years beginning after December 15, 2023, including interim periods therein. The Company is evaluating the impact of this guidance on its consolidated financial statements. |
Restatements of Previously Issu
Restatements of Previously Issued Consolidated Financial Statements | 6 Months Ended |
Jun. 30, 2023 | |
Prior Period Adjustment [Abstract] | |
Error Correction [Text Block] | 3. Restatements of Previously Issued Consolidated Financial Statements During the preparation of its 2022 Annual Report on Form 10-K, the Company determined that it had not appropriately accounted for certain historical transactions under US GAAP. In accordance with Staff Accounting Bulletin (“SAB”) 99, Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2023 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | 4. Acquisitions Logicquest Technology, Inc. In April 2023, the Company executed a purchase agreement for 99.4 million shares of restricted common stock of Logicquest Technology, Inc., a Nevada corporation (“Logicquest”) representing ownership of 99.1% of Logicquest, 48 shares of Series C Convertible Non-Redeemable Preferred Stock of Logicquest and 10 shares of Series D Convertible Non-Redeemable Preferred Stock of Logicquest, in exchange for an aggregate purchase price of $225,000. Logicquest was a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) quoted on the OTC Pink Open Market under the symbol “LOGQ” and is required to file reports and other information with the Securities and Exchange Commission (the “SEC”) pursuant to the Exchange Act. In June 2023, the Company merged the assets of Coyni, Inc., a wholly-owned subsidiary of the Company (“Coyni PrivCo”), and Logicquest, with Logicquest as the surviving entity. Subsequently, Logicquest changed its name to Coyni, Inc. (“Coyni PubCo”). The Company expects to close on the purchase in Q3 2023. The Company intends to spin-off assets of the Company into Coyni PubCo at a later date. The details of the spin-off are being finalized and will be subject to corporate governance. There can be no assurance as to the timing or whether the Company will be able to consummate the spin-off of Logicquest. Since the timing or completion of the transaction is uncertain, the Company’s investment in Coyni has not been reclassified as assets held for sale, in accordance with ASC Topic 205. The Company has engaged Kingswood, a division of Kingswood Capital Partners, LLC (“Kingswood”) as the non-exclusive placement agent pursuant to an Engagement Agreement dated as of April 21, 2023, to advise the Company in connection with an offering on a reasonable best-efforts basis of Coyni PubCo as a separate publicly traded company (the “Offering”). The Offering is subject to completion of the anticipated spin-off, subject to market conditions. The Company expects to raise approximately $40 million in the Offering based on the valuation of Coyni PubCo’s assets and liabilities of approximately $200 million. The Company has not obtained an independent third-party valuation of Coyni PubCo. Merchant Payment Solutions LLC In November 2021, the Company executed a term sheet to acquire certain ACH business of Merchant Payment Solutions LLC (“MPS”). Upon execution of the term sheet, the Company made a refundable earnest money deposit in the amount of $725,000 toward the total purchase price. After conducting due diligence, the Company elected to terminate the term sheet on April 21, 2023. In June 2023, the Company and MPS agreed to finalize a Portfolio Purchase Agreement (“Purchase Agreement”). Pursuant to the Purchase Agreement, the Company acquired the ACH portfolio of MPS for $725,000. Transact Europe Holdings On April 1, 2022, the Company acquired Transact Europe Holdings for $28.8 million (€26.0 million) in cash. TEU, an EU-regulated electronic money institution headquartered in Sofia, Bulgaria, offers an array of licenses such as principal level membership of Visa, worldwide membership of MasterCard, and principal membership of China UnionPay. TEU is also part of the direct SEPA, a payment system enabling cashless payments across continental Europe. The following summarizes the estimated fair values of the net assets acquired which is recorded as of April 1, 2022 (dollars in thousands): Tangible assets (liabilities): Net assets and liabilities $ 7,339 Intangible assets: Customer relationships 1,267 Goodwill 20,205 21,472 Total net assets acquired $ 28,811 Sky Financial & Intelligence On March 31, 2022, the Company contracted to acquire a portfolio of merchant accounts from Sky Financial for $18.1 million. The Company paid $16.0 million in cash in March 2022 and issued 500,000 shares of restricted common stock for the transaction on May 12, 2022. The entire amount tendered in both cash and stock was recorded as a Customer Relationships asset. As of the date of this filing, the Company has not received delivery of the acquired merchant list and the associated ISO management portal access. The Company charged off the entire purchase price in 2022. Also, during 2022, the Company suspended its reporting of revenue from the Sky Financial portfolio. The Company is vigorously pursuing its entitlements under the purchase agreement. |
Settlement Processing
Settlement Processing | 6 Months Ended |
Jun. 30, 2023 | |
Settlement Processing Abstract | |
Settlement Processing [Text Block] | 5. Settlement Processing The Company’s proprietary blockchain-based technology serves as the settlement engine for all transactions within the Company’s ecosystem. The blockchain ledger provides a robust and secure platform to log large volumes of immutable transactional records in real time. In summary, blockchain is a distributed ledger that uses digitally encrypted keys to verify, secure and record details of each transaction conducted within an ecosystem. Unlike general blockchain-based systems, the Company uses proprietary, private ledger technology to verify every transaction conducted within the Company ecosystem. The verification of transaction data comes from trusted partners, all of whom have been extensively vetted by us. The Company facilitates all financial elements of our closed-loop ecosystem, and we act as the administrator for all related accounts. Using our TrustGateway technology, we seek authorization and settlement for each transaction from Gateways to the issuing bank responsible for the credit/debit card used in the transaction. When the Gateway settles the transaction, our TrustGateway technology composes a chain of blockchain instructions to our ledger manager system. When consumers use credit or debit cards to pay for transactions with merchants who use our ecosystem, the transaction starts with the consumer purchasing tokens from us. The issuance of tokens is accomplished when we load a virtual wallet with a token, which then transfers credits to the merchant’s wallet on a dollar-for-dollar basis, after which the merchant releases its goods or services to the consumer. These transfers take place instantaneously and seamlessly, allowing the transaction experience to seem like any other ordinary credit or debit card transaction to the consumer and merchant. While our blockchain ledger records transaction details instantaneously, the final cash settlement of each transaction can take days to weeks, depending upon contract terms between us and the gateways we use, between us and our ISOs, and between us and/or our ISOs and merchants who use our services. In the case where we have received transaction funds, but not yet paid a merchant or an ISO, we hold funds in either a trust account or as cash deemed restricted within our operating accounts. We record the total of such funds as cash due from Gateways, net – a current asset. Of these funds, we record the balance due to merchants and ISOs as payment processing liabilities, net – a current liability. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 6. Property and Equipment Property and equipment consisted of the following as of June 30, 2023, and December 31, 2022 (dollars in thousands): June 30, 2023 December 31, 2022 Buildings $ 1,360 $ 1,360 Computers and equipment 268 247 Furniture and fixtures 144 149 Improvements 164 164 Total property and equipment 1,936 1,920 Less: accumulated depreciation (300 ) (224 ) Net property and equipment $ 1,636 $ 1,696 Depreciation expense was $39,605 and $34,340 for the three months ended June 30, 2023 and the three months ended June 30, 2022, respectively and $76,065 and $67,117 for the six months ended June 30, 2023 and the six months ended June 30, 2022, respectively. |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2023 | |
Disclosure Text Block Supplement [Abstract] | |
Goodwill Disclosure [Text Block] | 7. Goodwill Goodwill assets consisted of the following, as of June 30, 2023, and December 31, 2022 (dollars in thousands): June 30, 2023 December 31, 2022 Acquisition of Northeast $ 2,793 $ 2,793 Acquisition of Charge Savvy 3,755 3,755 Acquisition of Transact Europe 20,205 20,205 Total goodwill $ 26,753 $ 26,753 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | 8. Intangible Assets Intangible assets consisted of the following, as of June 30, 2023, and December 31, 2022 (dollars in thousands): As of June 30, 2023 As of December 31, 2022 Intangible Assets Amortization Period Cost Accumulated Amortization Net Cost Accumulated Amortization Net Customer relationships – North America 5 years $ 6,545 $ (2,337 ) $ 4,208 $ 5,820 $ (1,755 ) $ 4,065 Customer relationships - International 2 years 1,267 (792 ) 475 1,267 (475 ) 792 Business technology/IP 5 years 2,675 (1,060 ) 1,615 2,675 (793 ) 1,882 Total intangible assets $ 10,487 $ (4,189 ) $ 6,298 $ 9,762 $ (3,023 ) $ 6,739 Amortization expense was $0.6 million and $2.1 million for the three months ended June 30, 2023 and the three months ended June 30, 2022, respectively and $1.2 million and $2.5 million for the six months ended June 30, 2023 and the six months ended June 30, 2022, respectively. Amortization expense for each of the years ending December 31 is as follows (dollars in thousands): Year Amount 2023 (remainder) $ 1,239 2024 2,002 2025 1,844 2026 992 2027 148 Thereafter 73 Total $ 6,298 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 9. Long-Term Debt Long-term debt consisted of the following, as of June 30, 2023, and December 31, 2022 (dollars in thousands): As of June 30, 2023 As of December 31, 2022 $100,000,000 8% senior convertible note due November 3, 2024 $ 66,314 $ 61,101 $149,900 Economic Injury Disaster Loan (EIDL), interest rate of 3.75%, due June 1, 2050 148 149 $500,000 EIDL, interest rate of 3.75%, due May 8, 2050 493 499 Total debt 66,955 61,749 Less: current portion (15 ) (14 ) Net long-term debt $ 66,940 $ 61,735 The following is a rollforward of the senior convertible note balance (dollars in thousands): Balance, December 31, 2020 $ - Convertible debentures issued 100,000 Derivative liability (21,580 ) Original Issue Discount of 16% (16,000 ) Placement fees and issuance costs (7,200 ) Amortization and write-off of debt discount 3,435 Balance, December 31, 2021 58,655 Repayments (14,550 ) Amortization of debt discount 16,996 Balance, December 31, 2022 61,101 Repayments (300 ) Amortization and write-off of debt discount 5,513 Balance, June 30, 2023 $ 66,314 Derivative liability The notes contain embedded derivatives representing the conversion features, redemption rights, and certain events of default. The Company determined that these embedded derivatives required bifurcation and separate valuation. The Company utilizes a binomial lattice model to value its bifurcated derivatives included in the notes. ASC 815 does not permit an issuer to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation and liability classification as derivative financial instruments. Rather, such terms and features must be combined together, and fair-valued as a single, compound embedded derivative. The Company selected a binomial lattice model to value the compound embedded derivative because it believes this technique is reflective of all significant assumptions that market participants would likely consider in negotiating the transfer of the notes. Such assumptions include, among other inputs, stock price volatility, risk-free rates, credit risk assumptions, early redemption and conversion assumptions, and the potential for future adjustment of the conversion price due to triggering events. Additionally, there are other embedded features of the notes requiring bifurcation, other than the conversion features, which had no value at December 31, 2020 due to management’s estimates of the likelihood of certain events, but that may have value in the future should those estimates change. The following is a rollforward of the derivative liability for the year ended December 31, 2022, and the six-month period ended June 30, 2023 (dollars in thousands): Senior Convertible Note On November 8, 2021, the Company sold and issued, in a registered direct offering, an 8% senior convertible note due November 3, 2023, and subsequently extended to November 5, 2024, in the aggregate original principal amount of $100 million (the “Note”). The Note had an original issue discount of sixteen percent (16%) resulting in gross proceeds of $84 million. The Note was sold pursuant to the terms of a Securities Purchase Agreement, dated November 2, 2021 (the “SPA”), between the Company and the investor in the Note (the “Investor”). On July 25, 2023, Company entered into an Exchange Agreement (the “Exchange Agreement”) under which the Company and the Investor have agreed to exchange (the “Exchanges”), in two separate exchanges, an aggregate of $22.703 million of the outstanding principal and interest under the Note for 15,000 shares of a newly authorized series of preferred stock of the Company designated as Series A Preferred Convertible Stock (the “Series A Preferred Stock”), further described in Note 10 - Series A Preferred Convertible Stock On July 31, 2023, pursuant to the terms of the Exchange Agreement, the Company closed the initial exchange (the “Initial Exchange”) and issued 6,000 shares of Series A Preferred Stock in exchange for $4,297,000 of the outstanding principal balance of the Note and $1,703,000 of accrued interest. Additionally, upon satisfaction of all applicable closing conditions, including, without limitation, the Company’s having obtained any stockholder approval required for the consummation of the transactions and the issuance of the common stock issuable upon the conversion of all of the shares of Series A Preferred Stock (unless waived by the applicable other party), in the final exchange (the “Final Exchange”), the remaining $16,703,000 of outstanding principal balance subject to the Exchanges will be exchanged for 9,000 shares of Series A Preferred Stock on a date mutually agreed to by the Company and the Investor. The Company paid the Investor $6.0 million, $5.0 million and $3.6 million in principal in the first three quarters of 2022, respectively. These payments consisted of $12.2 million in cash and $2.4 million in interest which was paid with shares of the Company’s common stock. In May 2023, the Investor converted $0.3 million of the outstanding principal balance for 562,641 shares of the Company’s common stock at a conversion price of $0.53. SBA CARES Act Loans On June 9, 2020, the Company entered into a 30-year loan agreement with the SBA under the CARES Act in the amount of $149,900. The loan bears interest at 3.75% per annum and requires monthly principal and interest payments of $731 beginning June 9, 2021. Both the Chief Executive Officer and Chairman of the Company signed personal guarantees under this loan. On May 8, 2020, Charge Savvy executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the TNB’s business. Pursuant to that certain Loan Authorization and Agreement (the “SBA Loan Agreement”), Charge Savvy borrowed an aggregate principal amount of the EIDL Loan of $150,000, with proceeds to be used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue only on funds actually advanced from the date of each advance. Installment payments, including principal and interest, are due monthly beginning May 8, 2021 (twelve months from the date of the SBA Loan) in the amount of $731. The balance of principal and interest is payable thirty years from the date of the SBA Loan. In connection therewith, the Company also received a $10,000 grant, which does not have to be repaid. During the year ended December 31, 2020, $10,000 was recorded in EIDL grant income in the Statements of Operations. On Aug 24, 2021, Charge Savvy was granted an increase in loan principal in the amount of $350,000 on identical terms. In connection therewith, Charge Savvy executed (i) loans for the benefit of the SBA (the “SBA Loan”), which contains customary events of default and (ii) Security Agreements, granting the SBA a security interest in all tangible and intangible personal property of Charge Savvy, which also contains customary events of default (the “SBA Security Agreement”). |
Stock Option Awards
Stock Option Awards | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement [Text Block] | 10. Stock Option Awards The following table represents the employee stock option activity during the six months ended June 30, 2023 and 2022. Weighted Average Aggregate Shares Exercise Price Intrinsic Value Outstanding at December 31, 2021 391,562 $ 5.07 Granted - - Exercised (12,417 ) 0.42 Forfeited or expired (9,702 ) 9.24 Outstanding at June 30, 2022 369,443 $ 1.47 $ 387,916 Exercisable at June 30, 2022 369,443 $ 1.47 $ 387,916 Outstanding at December 31, 2022 319,627 $ 4.29 Granted - - Exercised - - Forfeited or expired - - Outstanding at June 30, 2023 319,627 $ 4.29 $ - Exercisable at June 30, 2023 319,627 $ 4.29 $ - The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based upon the Company’s closing stock price of $0.75 and $1.05 as of June 30, 2023 and 2022, respectively, which would have been received by the option holders had all option holders exercised their options as of that date. As of June 30, 2023, there was no unrecognized compensation cost related to non-vested stock options. The Company adopted the 2021 Restricted Stock Plan (“2021 Plan”) in November 2021, which provides for the grant of restricted stock awards and performance stock awards to executive officers, non-employee directors and other key employees of the Company. The 2021 Plan provides for up to 5,000,000 shares of common stock. These awards will have such vesting or other provisions as may be established by the Board of Directors at the time of each award. The following table represents the restricted stock award activity during the six months ended June 30, 2023 and 2022. Non-vested Restricted Stock Awards Weighted Average Grant Date Fair Value Non-vested at January 1, 2022 - Granted 39,413 $ 3.24 Vested (39,413 ) 3.24 Forfeited - - Non-vested at June 30, 2022 - - Non-vested at January 1, 2023 667,277 $ 1.20 Granted 131,658 0.76 Vested (347,537 ) 1.53 Forfeited (319,740 ) 1.46 Non-vested at June 30, 2023 131,658 $ 0.76 In addition, the Company issues stock with no exercise price to its employees and outside service providers. These stock grants typically do not have a vesting period and vest immediately upon issuances. The Company issued 86,194 and 548,039 shares of common stock with no vesting period during the six-month periods ended June 30, 2023 and 2022, respectively. The Company recognized stock-based compensation expense in the amount of $161,256 and $2,087,750 for the six months ended June 30, 2023 and 2022, respectively. |
Operating Leases
Operating Leases | 6 Months Ended |
Jun. 30, 2023 | |
Disclosure Text Block [Abstract] | |
Lessor, Operating Leases [Text Block] | 11. Operating Leases The Company leases office space at three locations in the United States (California, Florida and Massachusetts) and in one location in the European Union (Sofia, Bulgaria). On March 23, 2023, the Company executed a lease agreement with for the Company headquarters office commencing July 1, 2023 and terminating on December 31, 2028 with certain contingencies. The leased property is to provide for the continued operations and room for growth at its current location after the expiry on June 30, 2023 of its sublease with the sublandlord. The starting monthly rent is $45,593 in July 2023 for the Phase 1 premises. In May 2023, the Company entered into a sublease for its Florida office space. As of June 20, 2023, the Company determined that the right-of-use asset for the original operating lease was impaired by approximately $100,000. This impairment loss is included in general and administrative expenses during the three and six-month periods ended June 30, 2023. The Company had operating lease expense of $258,656 and $198,409 for the three months ended June 30, 2023 and 2023, respectively. The Company had operating lease expense of $459,535 and $357,831 for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the weighted-average remaining lease term was 4.5 years and the weighted average discount rate was 11.7%. Future minimum lease payments under the operating leases and reconciliation to the operating lease liability as of June 30, 2023 are as follows (in thousands): Year Amount 2023 (Remainder) $ 401 2024 1,167 2025 1,240 2026 1,162 2027 883 Thereafter 878 Total lease payments 5,731 Less: imputed interest (1,539 ) Present value of total lease liabilities 4,192 Less: current lease liabilities (358 ) Long-term lease liabilities $ 3,833 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 12. Related Party Transactions PrivCo The Company repurchased, in two separate repurchase transactions each consisting of 1 million shares of common stock, an aggregate of 2 million shares owned by PrivCo (an entity controlled by Messrs. Errez and Nisan). In October 2022, the Board unanimously ratified these two repurchase transactions between the Company and PrivCo. The Company repurchased 1,000,000 shares for a price per share of $5.59 (for total proceeds to PrivCo of $5.6 million) (the “First Repurchase”) and 1,000,000 shares for a price per share of $0.82 (for total proceeds to PrivCo of $820,000) (the “Second Repurchase”). The First Repurchase was based on the closing price of the common stock on November 24, 2021, and took place starting in February 2022 and ended in October 2022. The Second Repurchase was based on the closing price of the common stock on July 29, 2022, and was consummated in October 2022. The purpose of each of these transactions was to allow the Company to issue shares to new shareholders without increasing the Company’s shares outstanding. Family Relationships The Company employs two of our CEO’s brothers, Dan and Liron Nusonivich, who are paid approximately $200,000 and $110,000 per year, respectively. There are no family relationships between any of the other directors or executive officers and any other employees or directors or executive officers. The Company did not pay any commissions to the related parties mentioned above for the three-month and six-month periods ended June 30, 2023, June 30, 2022, or the year ended December 31, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 13. Commitments and Contingencies From time-to-time, the Company is involved in legal proceedings. The Company records a liability for those legal proceedings when it determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred however, the amount cannot be reasonably estimated. From time to time, the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders. The following is a summary of our current outstanding litigation. Note that references to GreenBox POS are for historical purposes. GreenBox POS changed its name to RYVYL Inc. on October 13, 2022. ● Corporate Performance Consulting, LLC (CPC) v. GreenBox POS – On April 7, 2021, CPC filed a complaint against GreenBox POS in San Diego Superior Court. Plaintiff CPC alleges breach of contract, breach of implied covenant of good faith and fair dealing, goods and services rendered, negligent misrepresentation, violation of CA Business and Professions Code Section 17200, and unjust enrichment. The crux of CPC’s claim is that GreenBox POS failed to compensate for certain consulting and corporate advisory services. GreenBox POS believes the claims are without merit and intends to defend itself vigorously. On June 17, 2021, GreenBox POS filed a Cross-Complaint for breach of contract, breach of implied covenant of good faith and fair dealing, negligent misrepresentation, unjust enrichment, and rescission. The parties attended mediation on December 15, 2022, and subsequently entered into a confidential settlement agreement. The parties have executed a request for dismissal with prejudice to be filed with the Court. ● The Good People Farms, LLC (“TGPF”) - TGPF initiated an arbitration in the American Arbitration Association (“AAA”) on or about April 20, 2020, against the Company, Fredi Nisan, Ben Errez, MTrac Tech Corp., Vanessa Luna, and Jason LeBlanc (the “Defendants”). The complaint generally alleged that the Defendants improperly breached contracts and withheld funds. The action sought damages, including interest, an injunction, and costs of suit incurred. On January 15, 2021, the Company filed a counterclaim in AAA for fraud, intentional misrepresentation, breach of contract, breach of covenant of good faith and fair dealing, violation of California Business and Professions Code Section 17200, and accounting. The complaint generally alleged that that TGPF fraudulently submitted transactions for processing not permissible within the terms of service and sought damages, including interest and costs of suit incurred. The individuals were dismissed from litigation. The parties attended binding arbitration from April 18 to 21, 2023. The AAA panel issued an interim award on July 10, 2023, in favor of TGPF awarding $579,393, plus attorneys’ fees, costs, and interest. As of June 30, 2023, the Company has accrued $800,000 related to this award which is included in other current liabilities. ● On April 27, 2022, Paul Levine (“Levine”), former Chief Executive Officer of Coyni, Inc. (“coyni”), a wholly-owned subsidiary of the Company, filed a charge with the Occupational Safety and Health Administration (“OSHA”) against respondents coyni and the Company. Levine alleged fraudulent payments to a product development vendor and retaliation in violation of the Sarbanes-Oxley Act of 2022, as amended, 18 U.S.C. §1514A and sought a ruling for damages, including interest and other relief the administration deemed proper. The OSHA claim was withdrawn on or around April 3, 2023. ● On November 8, 2022, the Company filed a complaint against its former Chief Operating Officer Vanessa Luna, Luna Consultant Group, LLC and John Does 1 through 50 in San Diego Superior Court. The Company is alleging Ms. Luna abused her position for additional compensation by failing to follow proper protocols and shirked her responsibilities by scheming and maintaining alternative employment. The action seeks damages, including interest and costs of suit incurred. The parties are currently in the discovery phase. ● On November 10, 2022, Vanessa Luna, former COO of the Company, filed a complaint against the Company and Fredi Nisan in San Diego Superior Court. Ms. Luna alleges that Mr. Nisan used contract negotiations to coerce her, that the Company improperly coded transactions and misled investors, and that when her concerns were reported to management, she was wrongfully terminated, resulting in a number of claims. Ms. Luna is seeking damages including compensatory damages, unpaid wages (past and future), loss of wages and benefits (past and future), expectation damages, and other damages to be proven at trial. The Company denies all allegations. As the Company cannot predict the outcome of the matter, the probability of an outcome cannot be determined. The Company intends to vigorously defend against all claims. The parties are currently in the discovery phase. ● On December 12, 2022, Jacqueline Dollar (aka Jacqueline Reynolds), former Chief Marketing Officer of the Company, filed a complaint against the Company, Fredi Nisan, and Does 1-20 in San Diego Superior Court. Ms. Dollar is alleging she was undercompensated compared to her male counterparts and retaliated against after raising concerns to management resulting in sex discrimination in violation of the California Fair Employment and Housing Act (“FEHA”) and failure to prevent discrimination in violation of FEHA. Ms. Dollar is also claiming intentional infliction of emotional distress. Ms. Dollar is seeking an unspecified amount of damages related to, among other things, payment of past and future lost wages, stock issuances, bonuses and benefits, compensatory damages, and general, economic, non-economic, and special damages. As the Company cannot predict the outcome of the matter, the probability of an outcome cannot be determined. The Company intends to vigorously defend against all claims. ● On February 1, 2023, a purported class action lawsuit titled Cullen V. RYVYL Inc. fka Greenbox POS, Inc., et al., Case No. 3:23-cv-00185-GPC-AGS, was filed in the United States District Court for the Southern District of California against several defendants, including the Company and certain of our current and former directors and officers (the “Defendants”). The complaint was filed on behalf of persons who purchased or otherwise acquired the Company’s publicly traded securities between January 29, 2021, and January 20, 2023 (the “Class Action”). The complaint generally alleges that the Defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (“Securities Act”) and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making false and/or misleading statements regarding the Company’s financial controls, performance and prospects. The action seeks damages, including interest, and the award of reasonable fees and costs to the putative class. The Company denies all allegations of liability and intends to vigorously defend against all claims. However, given the preliminary stage of the lawsuit, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome at this time or estimate a reasonably possible loss or range of loss that may result from this action. ● Merchant Payment Solutions LLC (“MPS”) – MPS and Manuel Sanchez, former Director of Business Development of the Company, filed a complaint on June 16, 2023 in the United States District Court for the Southern District of California against the Company, Coyni, Inc., certain of the Company’s officers and employees, and Does 1-10 (the “Defendants”). Allegations include failure of the Company to pay consideration in full under a purchase agreement, among other improper facilitations of payments among others, resulting in claims including breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, and conversion, among other claims. The Company denied all such allegations and the parties subsequently settled all matters. The complaint was dismissed with prejudice on June 26, 2023 and the Company has no further exposure with respect to the complaint. ● On June 22, 2023, a shareholder derivative complaint was filed in the United States District Court for the Southern District of California against certain of the Company’s current and/or former officers and directors (“the Defendants”), Christy Hertel, derivatively on behalf of RYVYL Inc., f/k/a Greenbox POS v. Ben Errez et al., Case No. 3:23-CV-01165-GPC-SBC. On August 4, 2023, a second shareholder derivative complaint was filed in the United States District Court for the Southern District of California against certain of the Company’s current and/or former officers and directors (the “Defendants”), Marcus Gazaway, derivatively on behalf of RYVYL Inc., f/k/a Greenbox POS v. Ben Errez et al., Case No. 3:23-CV-01425-LAB-BLM. Both derivative complaints generally allege that the Defendants failed to implement adequate internal controls that would prevent false and misleading financial information from being published by the Company and that controlling shareholders participated in overpayment misconduct resulting in violations of Sections 10(b), 14(a) and 20 of the Exchange Act and breached their fiduciary duties and, purportedly on behalf of the Company, seek damages and contribution from Defendants, and a direction that the Company and Defendants take actions to reform and improve corporate governance and internal procedures to comply with applicable laws. Defendants deny all allegations of liability and intend to vigorously defend against all claims. However, given the preliminary stage of the lawsuits, the uncertainty of litigation, and the legal standards that must be met for success on the merits, the Company cannot predict the outcome of either case at this time. This is a summary of our current commitments with respect to pending acquisitions: ● On July 27, 2022, the Company signed a letter of intent to acquire Fundstr UAB for their foreign exchange conversion and international payment capabilities and made a deposit payment of 685,000 euros. During the process of acquisition due diligence to meet corporate governance requirements, the Company assigned its executed letter of intent to wholly owned subsidiary RYVYL EU on August 7, 2023. Sale and Leaseback Agreement On March 28, 2023, the Company’s subsidiary, Charge Savvy executed an agreement to sell and subsequently leaseback its property located in South Chicago Heights, Illinois (the “Property”). The buyer has since defaulted under the agreement and the sale is no longer moving forward. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 14. Segment Reporting The Company has organized its operations into two segments: North America, and International. These segments reflect the way the Company evaluates its business performance and manages its operations. Our Chief Operating Decision Maker is our Chief Executive Officer. Management determined the operational data used by the CODM is that of the two reportable segments. Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Management evaluates the performance of its segments and allocates resources to them based on operating income or (loss) as compared to prior periods and current performance levels. The reportable segment operational data is presented in the tables below (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 as restated as restated Revenue North America $ 11,038 $ 5,934 $ 19,842 $ 10,144 International 3,810 1,031 6,298 1,031 $ 14,849 $ 6,966 $ 26,140 $ 11,176 Income (loss) from operations North America $ (5,972 ) $ (8,332 ) $ (9,699 ) $ (15,409 ) International 331 (534 ) 379 (534 ) $ (5,641 ) $ (8,866 ) $ (9,320 ) $ (15,943 ) Net income (loss) North America $ (12,409 ) $ 12,427 $ (20,297 ) $ (16,999 ) International 403 (336 ) 315 (336 ) $ (12,005 ) $ 12,092 $ (19,982 ) $ (17,335 ) Depreciation and amortization North America $ 461 $ 1,965 $ 919 $ 2,419 International 162 162 323 162 $ 623 $ 2,127 $ 1,242 $ 2,581 As of June 30, 2023 As of December 31, 2022 Long-lived assets, net North America $ 14,063 $ 14,236 International 20,623 20,951 $ 34,686 $ 35,187 As of June 30, 2023 As of December 31, 2022 Total assets North America $ 50,180 $ 50,528 International 65,245 47,129 $ 115,425 $ 97,657 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 15. Subsequent Events The Company follows the guidance in FASB ASC Topic 855, Subsequent Events In July 2023, the Company authorized a new class of Series A Preferred Convertible Stock (the “Series A Preferred Stock”), the terms of which are set forth in a Certificate of Designations of Rights and Preferences of Series A Convertible Preferred Stock of RYVYL, Inc. (the “Certificate of Designations”), which the Company filed with the Nevada Secretary of State on July 26, 2023. Under the terms of the Certificate of Designations, each share of Series A Preferred Stock will have a stated value of $1,000 per share, and will be convertible, at the holder’s option, either (a) at the fixed conversion price then in effect, which initially is $2.00 (subject to standard antidilution adjustments and adjustments as a result of subsequent issuances of securities where the effective price of the Common Stock is less than the then current fixed conversion price) or (b) at the Alternate Conversion Price (defined below). The Certificate of Designations also provides that in the event of certain “Triggering Events,” any holder may, at any time, convert any or all of such holder’s Series A Preferred Stock at a conversion rate equal to the product of (i) the Alternate Conversion Price and (ii) 115% of the value of the Preferred Stock subject to such conversion. “Triggering Events” include, among others, (i) a failure to timely deliver shares of Common Stock, upon a conversion, (ii) a suspension of trading on the principal trading market or the failure to be traded or listed on the principal market for five days or more, (iii) the failure to pay any dividend to the holders of Series A Preferred Stock when required, (iv) the failure to remove restrictive legends when required, (v) the Company’s default in payment of indebtedness in an aggregate amount of $2 million or more, (vi) proceedings for a bankruptcy, insolvency, reorganization or liquidation, which are not dismissed with 30 days, (vii) commencement of a voluntary bankruptcy proceeding, and (viii) final judgments against the Company for the payment of money in excess of $2 million. “Alternate Conversion Price” means the lower of (i) the applicable conversion price the in effect and (ii) the greater of (x) $0.24 (the “Floor Price”) and (y) 97.5% of the lowest volume weighted average price of the Common Stock during the five (5) consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable conversion notice. On July 31, 2023, the Company issued 6,000 shares of Series A Preferred Stock in exchange for $4,297,000 of the outstanding principal balance of the Note and $1,703,000 of accrued interest. See Note 9 – “ Long-Term Debt |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Reclassification, Comparability Adjustment [Policy Text Block] | Reclassifications Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flows. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Cash, Cash Equivalents and Restricted Cash The Company’s cash, cash equivalents and restricted cash represents the following: ● Cash and cash equivalents ● Restricted cash |
Receivable [Policy Text Block] | Cash Due from Gateways and Payment Processing Liabilities The Company’s primary source of revenues consists of payment processing services for its merchant clients. When a merchant makes a sale, the process of receiving the payment card information, engaging the banks for transferring the proceeds to the merchant’s account via digital gateways, and recording the transaction on a blockchain ledger are the activities for which the Company collects fees. The Company utilized several gateways during the six-months ended June 30, 2023 and the year ended December 31, 2022. These gateways have strict guidelines pertaining to scheduling of the release of funds to merchants which are based on several criteria, such as, and among other things, return and chargeback history, associated risks for specific business verticals, and average transaction size. To mitigate processing risks, these policies determine reserve requirements and payment-in-arrears strategies. While reserve and payment-in-arrears restrictions are in effect for a merchant payout, the Company records receivables from the gateways against these amounts until released. Cash due from gateways balances presented in the accompanying consolidated balance sheets represent the amount due to the Company for transactions processed wherein the funds have not been distributed. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development Costs Research and development costs are expensed as incurred. They consist primarily of salaries and benefits for research and development personnel, outsourced contracted services, as well as associated supplies and materials. |
Revenue [Policy Text Block] | Revenue Recognition Revenue is recognized upon transfer of control of promised goods or services to the Company’s customers or when the Company satisfies any performance obligations under contract. The amount of revenue represents consideration the Company expects to be entitled to in exchange for the respective goods or services provided. Under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, The Company’s primary revenue source is generated from payment processing services. Payment processing services revenue is based on a percentage of each transaction’s value and/or upon fixed amounts specified per each transaction or service and is recognized as such transactions or services are performed, at a point in time. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Accounts Receivable and Allowance for Credit Losses The Company maintains an allowance for credit losses for estimated losses from the inability of gateways to make required payments. The allowance for credit losses is evaluated periodically based on the aging of accounts receivable, the operational relationship with gateways and their payment history, historical charge-off experience and other assumptions, such as current assessment of economic conditions. |
Prepaid Expenses, Policy [Policy Text Block] | Prepaid Expenses Prepaid expenses primarily consist of deposits made with credit card companies under Transact Europe Holdings OOD and the prepayment associated with other acquisitions. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company assesses the fair value of financial instruments based on the provisions of ASC 820, Fair Value Measurements ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1- Quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than Level 1 prices 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 full 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. The following table describes the valuation techniques used to calculate the fair value for assets in Level 3. The significant unobservable input used in the fair value measurement of the Company’s identifiable intangible assets is the discount rate. The change in this input could result in a change of fair value measurement (dollars in thousands): Fair Value at June 30, 2023 Customer relationships $ 4,683 Business intellectual properties 1,615 Derivative Liability 584 Fair Value at December 31, 2022 Customer relationships $ 4,857 Business intellectual properties 1,882 Derivative liability 255 |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill and Other Intangible Assets The Company accounts for acquisitions of businesses in accordance with the acquisition method of accounting which requires assets and liabilities to be recognized at their fair values on the acquisition date. Goodwill represents the excess of the purchase price of acquired businesses over the fair value of the identifiable assets acquired and liabilities assumed. Acquisition costs are expensed as incurred. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform an annual impairment testing for its reporting units on December 31 of each fiscal year. Goodwill and other intangible assets acquired in a business combination determined to have an indefinite useful life are generally not amortized, but instead are tested for impairment at least annually and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. Other intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets The Company follows ASC 360 in accounting for finite-lived intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. As of June 30, 2023, the Company determined there were no indicators of impairment of its intangible assets. Long-lived assets are reviewed for impairment whenever management believes that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. To the extent that the carrying value is determined to be unrecoverable, an impairment loss is recognized through a charge to expense. As of June 30, 2023, other than a charge-off of the entire consideration paid in connection with the contracted acquisition of the Sky Financial portfolio, the Company performed an impairment analysis on the other acquired goodwill and other long-lived assets and concluded that their values are supportable and recoverable. |
Income Tax, Policy [Policy Text Block] | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all the deferred tax assets will not be realized. Judgment is required in determining and evaluating income tax provisions and valuation allowances for deferred income tax assets. We recognize an income 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 taxing authorities, based on the technical merits of the position. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As of June 30, 2023, and December 31, 2022, we have valuation allowances which serve to reduce net deferred tax assets. |
Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share Basic income or (loss) per share is computed by dividing net income or loss by the weighted average number of common shares outstanding for the periods presented. Diluted earnings per share includes the effect of any potentially dilutive debt or equity under the treasury stock method, if including such instruments is dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the years ended December 31, 2022, and three and six-month periods ended June 30, 2023, and 2022, since there are no common stock equivalents outstanding that would have a dilutive effect. |
Lessee, Leases [Policy Text Block] | Leases On February 25, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the net present value of lease payments for all lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statements of operations and statements of changes in cash flows. ASC 842 supersedes nearly all existing lease accounting guidance under GAAP issued by the FASB including ASC Topic 840, Leases. For operating leases, we calculated right-of-use assets and lease liabilities based on the net present value of the remaining lease payments as of the adoption date using our incremental borrowing rate as of that date. |
Segment Reporting, Policy [Policy Text Block] | Segment Reporting The Company has organized its operations into two segments: North America and International. These segments reflect the way management evaluates its business performance and manages its operations. Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. Management has determined that the operational data used by our CODM is that of the two reportable segments. Management bases strategic goals and decisions on these segments. Management evaluates the performance of its segments and allocates resources based on operating income or loss as compared to prior periods and current performance levels. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Standard Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses Recent Accounting Standards and Guidance Not Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers The FASB issued ASU 2020-06 (“Update”) to simplify the accounting for convertible instruments by eliminating large sections of the existing guidance in this area. It also eliminates several triggers for derivative accounting, including a requirement to settle certain contracts by delivering registered shares. These changes are intended to make GAAP easier to apply and, therefore, reduce the frequency of errors in this part of the literature. Early adoption is permitted for fiscal years beginning after December 15, 2020. For SEC filers, excluding smaller reporting companies, this Update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, this Update is effective for fiscal years beginning after December 15, 2023, including interim periods therein. The Company is evaluating the impact of this guidance on its consolidated financial statements. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets, which range from three to eight years. Leasehold improvements are amortized over the shorter of the useful life of the related assets or the lease term. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is recognized in the period the transaction occurs. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table describes the valuation techniques used to calculate the fair value for assets in Level 3. The significant unobservable input used in the fair value measurement of the Company’s identifiable intangible assets is the discount rate. The change in this input could result in a change of fair value measurement (dollars in thousands): Fair Value at June 30, 2023 Customer relationships $ 4,683 Business intellectual properties 1,615 Derivative Liability 584 Fair Value at December 31, 2022 Customer relationships $ 4,857 Business intellectual properties 1,882 Derivative liability 255 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Northeast Merchant Systems, Inc. (“Northeast”) [Member] | |
Acquisitions (Tables) [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following summarizes the estimated fair values of the net assets acquired which is recorded as of April 1, 2022 (dollars in thousands): Tangible assets (liabilities): Net assets and liabilities $ 7,339 Intangible assets: Customer relationships 1,267 Goodwill 20,205 21,472 Total net assets acquired $ 28,811 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment consisted of the following as of June 30, 2023, and December 31, 2022 (dollars in thousands): June 30, 2023 December 31, 2022 Buildings $ 1,360 $ 1,360 Computers and equipment 268 247 Furniture and fixtures 144 149 Improvements 164 164 Total property and equipment 1,936 1,920 Less: accumulated depreciation (300 ) (224 ) Net property and equipment $ 1,636 $ 1,696 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Goodwill [Table Text Block] | Goodwill assets consisted of the following, as of June 30, 2023, and December 31, 2022 (dollars in thousands): June 30, 2023 December 31, 2022 Acquisition of Northeast $ 2,793 $ 2,793 Acquisition of Charge Savvy 3,755 3,755 Acquisition of Transact Europe 20,205 20,205 Total goodwill $ 26,753 $ 26,753 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Intangible assets consisted of the following, as of June 30, 2023, and December 31, 2022 (dollars in thousands): As of June 30, 2023 As of December 31, 2022 Intangible Assets Amortization Period Cost Accumulated Amortization Net Cost Accumulated Amortization Net Customer relationships – North America 5 years $ 6,545 $ (2,337 ) $ 4,208 $ 5,820 $ (1,755 ) $ 4,065 Customer relationships - International 2 years 1,267 (792 ) 475 1,267 (475 ) 792 Business technology/IP 5 years 2,675 (1,060 ) 1,615 2,675 (793 ) 1,882 Total intangible assets $ 10,487 $ (4,189 ) $ 6,298 $ 9,762 $ (3,023 ) $ 6,739 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Amortization expense for each of the years ending December 31 is as follows (dollars in thousands): Year Amount 2023 (remainder) $ 1,239 2024 2,002 2025 1,844 2026 992 2027 148 Thereafter 73 Total $ 6,298 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | Long-term debt consisted of the following, as of June 30, 2023, and December 31, 2022 (dollars in thousands): As of June 30, 2023 As of December 31, 2022 $100,000,000 8% senior convertible note due November 3, 2024 $ 66,314 $ 61,101 $149,900 Economic Injury Disaster Loan (EIDL), interest rate of 3.75%, due June 1, 2050 148 149 $500,000 EIDL, interest rate of 3.75%, due May 8, 2050 493 499 Total debt 66,955 61,749 Less: current portion (15 ) (14 ) Net long-term debt $ 66,940 $ 61,735 |
Convertible Debt [Table Text Block] | The following is a rollforward of the senior convertible note balance (dollars in thousands): Balance, December 31, 2020 $ - Convertible debentures issued 100,000 Derivative liability (21,580 ) Original Issue Discount of 16% (16,000 ) Placement fees and issuance costs (7,200 ) Amortization and write-off of debt discount 3,435 Balance, December 31, 2021 58,655 Repayments (14,550 ) Amortization of debt discount 16,996 Balance, December 31, 2022 61,101 Repayments (300 ) Amortization and write-off of debt discount 5,513 Balance, June 30, 2023 $ 66,314 |
Stock Option Awards (Tables)
Stock Option Awards (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | The following table represents the employee stock option activity during the six months ended June 30, 2023 and 2022. Weighted Average Aggregate Shares Exercise Price Intrinsic Value Outstanding at December 31, 2021 391,562 $ 5.07 Granted - - Exercised (12,417 ) 0.42 Forfeited or expired (9,702 ) 9.24 Outstanding at June 30, 2022 369,443 $ 1.47 $ 387,916 Exercisable at June 30, 2022 369,443 $ 1.47 $ 387,916 Outstanding at December 31, 2022 319,627 $ 4.29 Granted - - Exercised - - Forfeited or expired - - Outstanding at June 30, 2023 319,627 $ 4.29 $ - Exercisable at June 30, 2023 319,627 $ 4.29 $ - |
Nonvested Restricted Stock Shares Activity [Table Text Block] | The following table represents the restricted stock award activity during the six months ended June 30, 2023 and 2022. Non-vested Restricted Stock Awards Weighted Average Grant Date Fair Value Non-vested at January 1, 2022 - Granted 39,413 $ 3.24 Vested (39,413 ) 3.24 Forfeited - - Non-vested at June 30, 2022 - - Non-vested at January 1, 2023 667,277 $ 1.20 Granted 131,658 0.76 Vested (347,537 ) 1.53 Forfeited (319,740 ) 1.46 Non-vested at June 30, 2023 131,658 $ 0.76 |
Operating Leases (Tables)
Operating Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block] | Future minimum lease payments under the operating leases and reconciliation to the operating lease liability as of June 30, 2023 are as follows (in thousands): Year Amount 2023 (Remainder) $ 401 2024 1,167 2025 1,240 2026 1,162 2027 883 Thereafter 878 Total lease payments 5,731 Less: imputed interest (1,539 ) Present value of total lease liabilities 4,192 Less: current lease liabilities (358 ) Long-term lease liabilities $ 3,833 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 as restated as restated Revenue North America $ 11,038 $ 5,934 $ 19,842 $ 10,144 International 3,810 1,031 6,298 1,031 $ 14,849 $ 6,966 $ 26,140 $ 11,176 Income (loss) from operations North America $ (5,972 ) $ (8,332 ) $ (9,699 ) $ (15,409 ) International 331 (534 ) 379 (534 ) $ (5,641 ) $ (8,866 ) $ (9,320 ) $ (15,943 ) Net income (loss) North America $ (12,409 ) $ 12,427 $ (20,297 ) $ (16,999 ) International 403 (336 ) 315 (336 ) $ (12,005 ) $ 12,092 $ (19,982 ) $ (17,335 ) Depreciation and amortization North America $ 461 $ 1,965 $ 919 $ 2,419 International 162 162 323 162 $ 623 $ 2,127 $ 1,242 $ 2,581 |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | As of June 30, 2023 As of December 31, 2022 Long-lived assets, net North America $ 14,063 $ 14,236 International 20,623 20,951 $ 34,686 $ 35,187 As of June 30, 2023 As of December 31, 2022 Total assets North America $ 50,180 $ 50,528 International 65,245 47,129 $ 115,425 $ 97,657 |
Description of the Business a_2
Description of the Business and Basis of Presentation (Details) $ / shares in Units, $ in Thousands, € in Millions | 6 Months Ended | |||||
Apr. 01, 2022 USD ($) | Apr. 01, 2022 EUR (€) | Jul. 13, 2021 ft² $ / shares shares | Jun. 30, 2023 USD ($) $ / shares | Jun. 30, 2022 USD ($) | Dec. 31, 2022 $ / shares | |
Description of the Business and Basis of Presentation (Details) [Line Items] | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||||
Payments to Acquire Businesses, Gross | $ 28,800 | € 26 | $ 0 | $ 28,811 | ||
Charge Savvy LLC [Member] | ||||||
Description of the Business and Basis of Presentation (Details) [Line Items] | ||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | shares | 1,000,000 | |||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | |||||
Shares Issued, Price Per Share | $ 12.14 | |||||
Area of Real Estate Property (in Square Feet) | ft² | 64,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Jun. 30, 2023 |
Minimum [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum [Member] | |
Summary of Significant Accounting Policies (Details) [Line Items] | |
Property, Plant and Equipment, Useful Life | 8 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | $ 584 | $ 255 |
Customer Relationships [Member] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 4,683 | 4,857 |
Technology-Based Intangible Assets [Member] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | $ 1,615 | $ 1,882 |
Acquisitions (Details)
Acquisitions (Details) € in Millions | 1 Months Ended | 6 Months Ended | ||||||
Apr. 21, 2023 USD ($) | Apr. 01, 2022 USD ($) | Apr. 01, 2022 EUR (€) | Mar. 31, 2022 USD ($) shares | Jun. 30, 2023 USD ($) | Apr. 30, 2023 USD ($) shares | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Acquisitions (Details) [Line Items] | ||||||||
Offering, Value | $ 40,000,000 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | $ 200,000,000 | |||||||
Payments to Acquire Businesses, Gross | $ 28,800,000 | € 26 | $ 0 | $ 28,811,000 | ||||
Logicquest Technology, Inc. [Member] | ||||||||
Acquisitions (Details) [Line Items] | ||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | shares | 99,400,000 | |||||||
Equity Method Investment, Ownership Percentage | 99.10% | |||||||
Business Combination, Consideration Transferred | $ 225,000 | |||||||
Logicquest Technology, Inc. [Member] | Series C Preferred Stock [Member] | ||||||||
Acquisitions (Details) [Line Items] | ||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | shares | 48 | |||||||
Logicquest Technology, Inc. [Member] | Series D Preferred Stock [Member] | ||||||||
Acquisitions (Details) [Line Items] | ||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | shares | 10 | |||||||
Merchant Payment Solutions LLC [Member] | ||||||||
Acquisitions (Details) [Line Items] | ||||||||
Business Combination, Consideration Transferred | $ 725,000 | |||||||
Transact Europe Holdings [Member] | ||||||||
Acquisitions (Details) [Line Items] | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 7,339 | |||||||
Payments to Acquire Businesses, Gross | $ 28,800,000 | € 26 | ||||||
Sky Financial & Intelligence [Member] | ||||||||
Acquisitions (Details) [Line Items] | ||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | shares | 500,000 | |||||||
Business Combination, Consideration Transferred | $ 18.1 | |||||||
Payments to Acquire Businesses, Gross | $ 16 |
Acquisitions (Details) - Schedu
Acquisitions (Details) - Schedule of Business Acquisitions, by Acquisition - Transact Europe Holdings [Member] | Apr. 01, 2022 USD ($) |
Tangible assets (liabilities): | |
Net assets and liabilities | $ 7,339 |
Intangible assets: | |
Intangible assets | 21,472 |
Total net assets acquired | 28,811 |
Goodwill [Member] | |
Intangible assets: | |
Intangible assets | 20,205 |
Customer Relationships [Member] | |
Intangible assets: | |
Intangible assets | $ 1,267 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 39,605 | $ 34,340 | $ 76,065 | $ 67,117 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Property, Plant and Equipment - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,936 | $ 1,920 |
Less: accumulated depreciation | (300) | (224) |
Net property and equipment | 1,636 | 1,696 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,360 | 1,360 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 268 | 247 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 144 | 149 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 164 | $ 164 |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of Goodwill - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill [Line Items] | ||
Goodwill | $ 26,753 | $ 26,753 |
Northeast Merchant Systems, Inc. (“Northeast”) [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 2,793 | 2,793 |
Charge Savvy LLC [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 3,755 | 3,755 |
Transact Europe Holdings [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 20,205 | $ 20,205 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of Intangible Assets | $ 0.6 | $ 2.1 | $ 2.5 |
Finite-Lived Intangible Assets, Amortization Expense, Next Rolling 12 Months | $ 1.2 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of Finite-Lived Intangible Assets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 10,487 | $ 9,762 |
Accumulated Amortization | (4,189) | (3,023) |
Net | $ 6,298 | 6,739 |
Technology-Based Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Cost | $ 2,675 | 2,675 |
Accumulated Amortization | (1,060) | (793) |
Net | $ 1,615 | 1,882 |
Northeast and Charge Savvy [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Cost | $ 6,545 | 5,820 |
Accumulated Amortization | (2,337) | (1,755) |
Net | $ 4,208 | 4,065 |
Transact Europe Holdings [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 2 years | |
Cost | $ 1,267 | 1,267 |
Accumulated Amortization | (792) | (475) |
Net | $ 475 | $ 792 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule Of Finite Lived Intangible Assets Future Amortization Expense Abstract | ||
2023 | $ 1,239 | |
2024 | 2,002 | |
2025 | 1,844 | |
2026 | 992 | |
2027 | 148 | |
Thereafter | 73 | |
Total | $ 6,298 | $ 6,739 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||
Jul. 31, 2023 | Jul. 25, 2023 | Nov. 08, 2021 | Nov. 02, 2021 | Jun. 09, 2020 | May 08, 2020 | May 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | |
Long-Term Debt (Details) [Line Items] | |||||||||||||
Debt Conversion, Original Debt, Amount | $ 22,703,000 | $ 300,000 | $ 2,110,000 | ||||||||||
Debt Instrument, Maturity Date | Nov. 05, 2024 | ||||||||||||
Series A Preferred Stock [Member] | |||||||||||||
Long-Term Debt (Details) [Line Items] | |||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 6,000 | 15,000 | |||||||||||
Principal [Member] | |||||||||||||
Long-Term Debt (Details) [Line Items] | |||||||||||||
Debt Conversion, Original Debt, Amount | $ 4,297,000 | ||||||||||||
Interest Expense [Member] | |||||||||||||
Long-Term Debt (Details) [Line Items] | |||||||||||||
Debt Conversion, Original Debt, Amount | $ 1,703,000 | ||||||||||||
Senior Convertible Debt ]Member] | |||||||||||||
Long-Term Debt (Details) [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 100,000,000 | $ 100,000,000,000 | |||||||||||
Debt, Original Issue Discount Rate | 16% | ||||||||||||
Proceeds from Debt, Net of Issuance Costs | $ 84,000,000 | ||||||||||||
Debt Conversion, Original Debt, Amount | $ 300,000 | ||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 562,641 | ||||||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | upon satisfaction of all applicable closing conditions, including, without limitation, the Company’s having obtained any stockholder approval required for the consummation of the transactions and the issuance of the common stock issuable upon the conversion of all of the shares of Series A Preferred Stock (unless waived by the applicable other party), in the final exchange (the “Final Exchange”), the remaining $16,703,000 of outstanding principal balance subject to the Exchanges will be exchanged for 9,000 shares of Series A Preferred Stock on a date mutually agreed to by the Company and the Investor. | ||||||||||||
Repayments of Debt | $ 5,000,000 | $ 6,000,000 | $ 3,600,000 | ||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ 0.53 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8% | 8% | |||||||||||
Debt Instrument, Maturity Date | Nov. 03, 2024 | ||||||||||||
Senior Convertible Debt ]Member] | Principal [Member] | |||||||||||||
Long-Term Debt (Details) [Line Items] | |||||||||||||
Repayments of Debt | $ 12,200,000 | ||||||||||||
Senior Convertible Debt ]Member] | Interest Expense [Member] | |||||||||||||
Long-Term Debt (Details) [Line Items] | |||||||||||||
Repayments of Debt | $ 2,400,000 | ||||||||||||
SBA CARES Act Loan [Member] | |||||||||||||
Long-Term Debt (Details) [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 149,900 | $ 149,900,000 | |||||||||||
Debt Instrument, Term | 30 years | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | 3.75% | |||||||||||
Debt Instrument, Periodic Payment | $ 731 | ||||||||||||
Debt Instrument, Maturity Date | Jun. 01, 2050 | ||||||||||||
Economic Injury Disaster Loan (“EIDL”) [Member] | |||||||||||||
Long-Term Debt (Details) [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 150,000 | $ 500,000,000 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | 3.75% | |||||||||||
Debt Instrument, Periodic Payment | $ 731 | ||||||||||||
Proceeds from Other Debt | 10,000 | ||||||||||||
Other Nonrecurring Income | 10,000 | ||||||||||||
Debt Instrument, Increase (Decrease), Net | $ 350,000 | ||||||||||||
Debt Instrument, Maturity Date | May 08, 2050 |
Long-Term Debt (Details) - Sche
Long-Term Debt (Details) - Schedule of Debt - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Long-Term Debt (Details) - Schedule of Debt [Line Items] | ||||
Total debt | $ 66,955 | $ 61,749 | ||
Less: current portion | (15) | (14) | ||
Net long-term debt | 66,940 | 61,735 | ||
Senior Convertible Debt ]Member] | ||||
Long-Term Debt (Details) - Schedule of Debt [Line Items] | ||||
$100,000,000 8% senior convertible note due November 3, 2024 | 66,314 | 61,101 | $ 58,655 | $ 0 |
SBA CARES Act Loan [Member] | ||||
Long-Term Debt (Details) - Schedule of Debt [Line Items] | ||||
Notes payable | 148 | 149 | ||
Economic Injury Disaster Loan (“EIDL”) [Member] | ||||
Long-Term Debt (Details) - Schedule of Debt [Line Items] | ||||
Notes payable | $ 493 | $ 499 |
Long-Term Debt (Details) - Sc_2
Long-Term Debt (Details) - Schedule of Debt (Parentheticals) - USD ($) | 6 Months Ended | |||
Jun. 30, 2023 | Nov. 02, 2021 | Jun. 09, 2020 | May 08, 2020 | |
Senior Convertible Debt ]Member] | ||||
Long-Term Debt (Details) - Schedule of Debt (Parentheticals) [Line Items] | ||||
$ 100,000,000,000 | $ 100,000,000 | |||
8% | 8% | |||
due | Nov. 03, 2024 | |||
SBA CARES Act Loan [Member] | ||||
Long-Term Debt (Details) - Schedule of Debt (Parentheticals) [Line Items] | ||||
$ 149,900,000 | $ 149,900 | |||
3.75% | 3.75% | |||
due | Jun. 01, 2050 | |||
Economic Injury Disaster Loan (“EIDL”) [Member] | ||||
Long-Term Debt (Details) - Schedule of Debt (Parentheticals) [Line Items] | ||||
$ 500,000,000 | $ 150,000 | |||
3.75% | 3.75% | |||
due | May 08, 2050 |
Long-Term Debt (Details) - Conv
Long-Term Debt (Details) - Convertible Debt - Senior Convertible Debt ]Member] - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Long-Term Debt (Details) - Convertible Debt [Line Items] | |||
Balance | $ 61,101 | $ 58,655 | $ 0 |
Repayments | (300) | (14,550) | |
Convertible debentures issued | 100,000 | ||
Derivative liability | (21,580) | ||
Original Issue Discount of 16% | (16,000) | ||
Placement fees and issuance costs | (7,200) | ||
Amortization | 5,513 | 16,996 | 3,435 |
Balance | $ 66,314 | $ 61,101 | $ 58,655 |
Stock Option Awards (Details)
Stock Option Awards (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock Option Awards (Details) [Line Items] | ||||
Share Price (in Dollars per share) | $ 0.75 | $ 0.75 | ||
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture | 86,194 | 548,039 | ||
Share-Based Payment Arrangement, Expense (in Dollars) | $ 0 | $ 79,000 | $ 0 | $ 206,000 |
Share-Based Payment Arrangement, Option [Member] | ||||
Stock Option Awards (Details) [Line Items] | ||||
Share Price (in Dollars per share) | $ 1.05 | $ 1.05 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 5,000,000 | 5,000,000 | ||
Share-Based Payment Arrangement, Expense (in Dollars) | $ 161,256 | $ 2,087,750 |
Stock Option Awards (Details) -
Stock Option Awards (Details) - Share-based Payment Arrangement, Option, Activity - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Share Based Payment Arrangement Option Activity Abstract | ||
Outstanding, Shares | 319,627 | 391,562 |
Outstanding, Weighted-Average Exercise Price | $ 4.29 | $ 5.07 |
Granted, Shares | 0 | 0 |
Granted, Weighted-Average Exercise Price | $ 0 | $ 0 |
Exercise, Shares | 0 | (12,417) |
Exercised, Weighted-Average Exercise Price | $ 0 | $ 0.42 |
Forfeited or Expired, Shares | 0 | (9,702) |
Forfeited or Expired, Weighted-Average Exercise Price | $ 0 | $ 9.24 |
Outstanding, Shares | 319,627 | 369,443 |
Outstanding, Weighted-Average Exercise Price | $ 4.29 | $ 1.47 |
Aggregate Intrinsic Value | $ 0 | $ 387,916 |
Exercisable, Shares | 319,627 | 369,443 |
Exercisable, Weighted-Average Exercise Price | $ 4.29 | $ 1.47 |
Exercisable, Aggregate Intrinsic Value | $ 0 | $ 387,916 |
Stock Option Awards (Details)_2
Stock Option Awards (Details) - Nonvested Restriced Stock Shares Activity - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Nonvested Restriced Stock Shares Activity Abstract | ||
Non-vested Restricted Stock Awards, Balance | 667,277 | 0 |
Weighted Average Grant Date Fair Value, Balance (in Dollars per share) | $ 1.2 | |
Non-vested Restricted Stock Awards, Granted | 131,658 | 39,413 |
Weighted Average Grant Date Fair Value, Granted (in Dollars per share) | $ 0.76 | $ 3.24 |
Non-vested Restricted Stock Awards, Vested | (347,537) | (39,413) |
Weighted Average Grant Date Fair Value, Vested (in Dollars per share) | $ 1.53 | $ 3.24 |
Non-vested Restricted Stock Awards, Forfeited | (319,740) | 0 |
Weighted Average Grant Date Fair Value, Forfeited (in Dollars per share) | $ 1.46 | $ 0 |
Non-vested Restricted Stock Awards, Balance | 131,658 | 0 |
Weighted Average Grant Date Fair Value, Balance (in Dollars per share) | $ 0.76 | $ 0 |
Operating Leases (Details)
Operating Leases (Details) | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Operating Leases (Details) [Line Items] | |||||
Property Subject to or Available for Operating Lease, Number of Units | 3 | 3 | |||
Operating Lease, Expense | $ 45,593 | $ 258,656 | $ 198,409 | $ 459,535 | $ 357,831 |
Operating Lease, Impairment Loss | $ 100,000 | ||||
Operating Lease, Weighted Average Remaining Lease Term | 4 years 6 months | 4 years 6 months | |||
Operating Lease, Weighted Average Discount Rate, Percent | 11.70% | 11.70% | |||
Europe [Member] | |||||
Operating Leases (Details) [Line Items] | |||||
Property Subject to or Available for Operating Lease, Number of Units | 1 | 1 |
Operating Leases (Details) - Le
Operating Leases (Details) - Lessee, Operating Lease, Liability, to be Paid, Maturity - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Lessee Operating Lease Liability To Be Paid Maturity Abstract | ||
2023 (Remainder) | $ 401 | |
2024 | 1,167 | |
2025 | 1,240 | |
2026 | 1,162 | |
2027 | 883 | |
Thereafter | 878 | |
Total lease payments | 5,731 | |
Less: imputed interest | (1,539) | |
Present value of total lease liabilities | 4,192 | |
Less: current lease liabilities | (358) | $ (534) |
Long-term lease liabilities | $ 3,833 | $ 1,109 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Oct. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | |
Related Party Transactions (Details) [Line Items] | |||
Stock Repurchased During Period, Value | $ 315,000 | ||
First Repurchase [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Stock Repurchased During Period, Shares (in Shares) | 1,000,000 | ||
Shares Acquired, Average Cost Per Share (in Dollars per share) | $ 5.59 | ||
Stock Repurchased During Period, Value | $ 5,600,000 | ||
Second Repurchase [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Stock Repurchased During Period, Shares (in Shares) | 1,000,000 | ||
Shares Acquired, Average Cost Per Share (in Dollars per share) | $ 0.82 | ||
Stock Repurchased During Period, Value | $ 820,000 | ||
Family of CEO #1 [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold | $ 200,000 | ||
Family of CEO #2 [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold | $ 110,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jul. 10, 2023 USD ($) | Jul. 27, 2022 EUR (€) |
Commitments and Contingencies Disclosure [Abstract] | ||
Loss Contingency, Damages Awarded, Value | $ 579,393 | |
Settlement Liabilities, Current | $ 800,000 | |
Deposits (in Euro) | € | € 685,000 |
Segment Reporting (Details)
Segment Reporting (Details) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 2 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of Segment Reporting Information, by Segment - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue | |||||
Revenues | $ 14,849 | $ 6,966 | $ 26,140 | $ 11,176 | |
Income (loss) from operations | |||||
Income (loss) from operations | (5,641) | (8,866) | (9,320) | (15,943) | |
Net income (loss) | |||||
Net income (loss) | (12,005) | 12,092 | $ (29,427) | (19,982) | (17,335) |
Depreciation and amortization | |||||
Depreciation and amortization | 623 | 2,127 | 1,242 | 2,581 | |
North America [Member] | |||||
Revenue | |||||
Revenues | 11,038 | 5,934 | 19,842 | 10,144 | |
Income (loss) from operations | |||||
Income (loss) from operations | (5,972) | (8,332) | (9,699) | (15,409) | |
Net income (loss) | |||||
Net income (loss) | (12,409) | 12,427 | (20,297) | (16,999) | |
Depreciation and amortization | |||||
Depreciation and amortization | 461 | 1,965 | 919 | 2,419 | |
International [Member] | |||||
Revenue | |||||
Revenues | 3,810 | 1,031 | 6,298 | 1,031 | |
Income (loss) from operations | |||||
Income (loss) from operations | 331 | (534) | 379 | (534) | |
Net income (loss) | |||||
Net income (loss) | 403 | (336) | 315 | (336) | |
Depreciation and amortization | |||||
Depreciation and amortization | $ 162 | $ 162 | $ 323 | $ 162 |
Segment Reporting (Details) - R
Segment Reporting (Details) - Reconciliation of Assets from Segment to Consolidated - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Long-lived assets, net | ||
Long-lived assets, net | $ 34,686 | $ 35,187 |
Total assets | ||
Total assets | 115,425 | 97,657 |
North America [Member] | ||
Long-lived assets, net | ||
Long-lived assets, net | 14,063 | 14,236 |
Total assets | ||
Total assets | 50,180 | 50,528 |
International [Member] | ||
Long-lived assets, net | ||
Long-lived assets, net | 20,623 | 20,951 |
Total assets | ||
Total assets | $ 65,245 | $ 47,129 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Jul. 31, 2023 | Jul. 26, 2023 |
Subsequent Events (Details) [Line Items] | ||
Debt Conversion, Converted Instrument, Shares Issued | 6,000 | |
Series A Preferred Stock [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | |
Preferred Stock, Convertible, Conversion Price | $ 2 | |
Preferred Stock, Convertible, Terms | in the event of certain “Triggering Events,” any holder may, at any time, convert any or all of such holder’s Series A Preferred Stock at a conversion rate equal to the product of (i) the Alternate Conversion Price and (ii) 115% of the value of the Preferred Stock subject to such conversion. “Triggering Events” include, among others, (i) a failure to timely deliver shares of Common Stock, upon a conversion, (ii) a suspension of trading on the principal trading market or the failure to be traded or listed on the principal market for five days or more, (iii) the failure to pay any dividend to the holders of Series A Preferred Stock when required, (iv) the failure to remove restrictive legends when required, (v) the Company’s default in payment of indebtedness in an aggregate amount of $2 million or more, (vi) proceedings for a bankruptcy, insolvency, reorganization or liquidation, which are not dismissed with 30 days, (vii) commencement of a voluntary bankruptcy proceeding, and (viii) final judgments against the Company for the payment of money in excess of $2 million. “Alternate Conversion Price” means the lower of (i) the applicable conversion price the in effect and (ii) the greater of (x) $0.24 (the “Floor Price”) and (y) 97.5% of the lowest volume weighted average price of the Common Stock during the five (5) consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable conversion notice. | |
Principal [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Debt Conversion, Original Debt, Amount | $ 4,297,000 | |
Interest Expense [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Debt Conversion, Original Debt, Amount | $ 1,703,000 |