Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 31, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | Ipsidy Inc. | |
Trading Symbol | AUID | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 23,204,488 | |
Amendment Flag | false | |
Entity Central Index Key | 0001534154 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-40747 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-2069547 | |
Entity Address, Address Line One | 670 Long Beach Boulevard | |
Entity Address, City or Town | Long Beach | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11561 | |
Title of 12(b) Security | Common Stock par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
City Area Code | 516 | |
Local Phone Number | 274-8700 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash | $ 9,233,399 | $ 3,765,277 |
Accounts receivable, net | 170,291 | 72,986 |
Current portion of net investment in direct financing lease | 78,731 | 72,682 |
Inventory | 214,289 | 254,951 |
Other current assets | 929,692 | 237,769 |
Total current assets | 10,626,402 | 4,403,665 |
Property and Equipment, net | 127,705 | 97,829 |
Other Assets | 73,243 | 240,223 |
Intangible Assets, net | 3,657,569 | 4,527,476 |
Goodwill | 4,183,232 | 4,183,232 |
Net investment in direct financing lease, net of current portion | 362,185 | 422,021 |
Total assets | 19,030,336 | 13,874,446 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 2,122,257 | 2,665,132 |
Notes payable obligation, current portion | 3,126 | 5,947 |
Capital lease obligation, current portion | 20,813 | 39,232 |
Convertible debt | 662,000 | |
Deferred revenue | 369,708 | 237,690 |
Total current liabilities | 3,177,904 | 2,948,001 |
Capital lease obligation, net of current portion | 10,562 | |
Notes payable, net of discounts and current portion | 487,339 | |
Convertible debt | 5,800,976 | |
Other liabilities | 47,809 | |
Total liabilities | 3,177,904 | 9,294,687 |
Stockholders’ Equity: | ||
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 23,198,419 and 19,642,401 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 2,319 | 1,964 |
Additional paid in capital | 124,609,145 | 102,651,304 |
Accumulated deficit | (108,980,665) | (98,234,151) |
Accumulated comprehensive income | 221,633 | 160,642 |
Total stockholders’ equity | 15,852,432 | 4,579,759 |
Total liabilities and stockholders’ equity | $ 19,030,336 | $ 13,874,446 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 23,198,419 | 19,642,401 |
Common stock, shares outstanding | 23,198,419 | 19,642,401 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Products and services | $ 516,218 | $ 501,700 | $ 1,657,296 | $ 1,587,330 |
Lease income | 12,131 | 13,992 | 37,833 | 43,270 |
Total revenues, net | 528,349 | 515,692 | 1,695,129 | 1,630,600 |
Operating Expenses: | ||||
Cost of Sales | 121,509 | 114,985 | 494,558 | 532,506 |
General and administrative | 5,331,159 | 1,527,723 | 10,308,785 | 5,400,639 |
Research and development | 419,313 | 308,038 | 1,088,496 | 928,778 |
Impairment loss | 1,035,629 | |||
Depreciation and amortization | 319,017 | 276,232 | 943,436 | 923,563 |
Total operating expenses | 6,190,998 | 2,226,978 | 12,835,275 | 8,821,115 |
Loss from operations | (5,662,649) | (1,711,286) | (11,140,146) | (7,190,515) |
Other Expense: | ||||
Warrant inducement expense | (366,795) | |||
Extinguishment of debt - gain (loss) | 485,762 | 971,522 | (985,842) | |
Other income | 6,736 | 16,779 | 14,394 | 51,445 |
Interest expense, net | (25,780) | (212,658) | (579,768) | (701,861) |
Other income (expense), net | 466,718 | (195,879) | 406,148 | (2,003,053) |
Loss before income taxes | (5,195,931) | (1,907,165) | (10,733,998) | (9,193,568) |
Income Tax Expense | (2,974) | (11,074) | (12,516) | (23,540) |
Net loss | $ (5,198,905) | $ (1,918,239) | $ (10,746,514) | $ (9,217,108) |
Net Loss Per Share - Basic and Diluted (in Dollars per share) | $ (0.24) | $ (0.11) | $ (0.52) | $ (0.52) |
Weighted Average Shares Outstanding - Basic and Diluted (in Shares) | 22,088,865 | 18,237,647 | 20,703,970 | 17,664,446 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Loss | $ (5,198,905) | $ (1,918,239) | $ (10,746,514) | $ (9,217,108) |
Foreign currency translation gain (loss) | 18,966 | 29,057 | 60,991 | (6,972) |
Comprehensive loss | $ (5,179,939) | $ (1,889,182) | $ (10,685,523) | $ (9,224,080) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total |
Balances at Dec. 31, 2019 | $ 1,727 | $ 95,032,252 | $ (86,935,593) | $ 177,385 | $ 8,275,771 |
Balances (in Shares) at Dec. 31, 2019 | 17,270,848 | ||||
Modification of warrants issued with debt | 95,223 | 95,223 | |||
Sale of common stock for cash | $ 12 | 199,988 | 200,000 | ||
Sale of common stock for cash (in Shares) | 114,719 | ||||
Stock-based compensation | $ 15 | 741,653 | 741,668 | ||
Stock-based compensation (in Shares) | 150,000 | ||||
Issuance of common stock to settle accounts payable | 8,270 | 8,270 | |||
Issuance of common stock to settle accounts payable (in Shares) | 3,540 | ||||
Warrant exercise for cash | $ 73 | 1,248,910 | 1,248,983 | ||
Warrant exercise for cash (in Shares) | 727,107 | ||||
Warrant exercise inducement | 366,795 | 366,795 | |||
Net loss | (9,217,108) | (9,217,108) | |||
Foreign currency translation | (6,972) | (6,972) | |||
Balances at Sep. 30, 2020 | $ 1,827 | 97,693,091 | (96,152,701) | 170,413 | 1,712,630 |
Balances (in Shares) at Sep. 30, 2020 | 18,266,214 | ||||
Balances at Jun. 30, 2020 | $ 1,822 | 97,581,421 | (94,234,462) | 141,356 | 3,490,137 |
Balances (in Shares) at Jun. 30, 2020 | 18,221,807 | ||||
Warrant and stock cashless exercises | $ 5 | (5) | |||
Warrant and stock cashless exercises (in Shares) | 44,407 | ||||
Stock-based compensation | 111,675 | 111,675 | |||
Net loss | (1,918,239) | (1,918,239) | |||
Foreign currency translation | 29,057 | 29,057 | |||
Balances at Sep. 30, 2020 | $ 1,827 | 97,693,091 | (96,152,701) | 170,413 | 1,712,630 |
Balances (in Shares) at Sep. 30, 2020 | 18,266,214 | ||||
Balances at Dec. 31, 2020 | $ 1,964 | 102,651,304 | (98,234,151) | 160,642 | 4,579,759 |
Balances (in Shares) at Dec. 31, 2020 | 19,642,401 | ||||
Sale of common stock for cash | $ 164 | 10,282,834 | 10,282,998 | ||
Sale of common stock for cash (in Shares) | 1,642,856 | ||||
Stock-based compensation | 4,795,069 | 4,795,069 | |||
Settlement of accrued expense with stock options | 349,376 | 349,376 | |||
Convertible notes converted to common stock | $ 117 | 6,232,223 | 6,232,340 | ||
Convertible notes converted to common stock (in Shares) | 1,171,296 | ||||
Stock option exercise for cash | $ 1 | 24,659 | $ 24,660 | ||
Stock option exercise for cash (in Shares) | 4,802 | 504,804 | |||
Warrant exercise for cash | $ 6 | 273,747 | $ 273,753 | ||
Warrant exercise for cash (in Shares) | 60,834 | ||||
Cashless stock option exercise | $ 40 | (40) | |||
Cashless stock option exercise (in Shares) | 412,569 | ||||
Cashless warrant exercise | $ 27 | (27) | |||
Cashless warrant exercise (in Shares) | 263,661 | ||||
Net loss | (10,746,514) | (10,746,514) | |||
Foreign currency translation | 60,991 | 60,991 | |||
Balances at Sep. 30, 2021 | $ 2,319 | 124,609,145 | (108,980,665) | 221,633 | 15,852,432 |
Balances (in Shares) at Sep. 30, 2021 | 23,198,419 | ||||
Balances at Jun. 30, 2021 | $ 2,137 | 111,493,973 | (103,781,760) | 202,667 | 7,917,017 |
Balances (in Shares) at Jun. 30, 2021 | 21,363,027 | ||||
Sale of common stock for cash | $ 164 | 10,282,834 | 10,282,998 | ||
Sale of common stock for cash (in Shares) | 1,642,856 | ||||
Stock-based compensation | 2,533,943 | 2,533,943 | |||
Stock option exercise for cash | $ 1 | 24,659 | 24,660 | ||
Stock option exercise for cash (in Shares) | 4,802 | ||||
Warrant exercise for cash | $ 6 | 273,747 | 273,753 | ||
Warrant exercise for cash (in Shares) | 60,834 | ||||
Cashless stock option exercise | $ 11 | (11) | |||
Cashless stock option exercise (in Shares) | 125,998 | ||||
Cashless warrant exercise | |||||
Cashless warrant exercise (in Shares) | 902 | ||||
Net loss | (5,198,905) | (5,198,905) | |||
Foreign currency translation | 18,966 | 18,966 | |||
Balances at Sep. 30, 2021 | $ 2,319 | $ 124,609,145 | $ (108,980,665) | $ 221,633 | $ 15,852,432 |
Balances (in Shares) at Sep. 30, 2021 | 23,198,419 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (10,746,514) | $ (9,217,108) |
Adjustments to reconcile net loss with cash flows from operations: | ||
Depreciation and amortization expense | 943,436 | 923,563 |
Stock-based compensation | 4,795,069 | 741,668 |
(Gain)/loss on extinguishment of note payable | (971,522) | 985,842 |
Amortization of debt discounts and issuance costs | 554,020 | 333,388 |
Impairment losses | 1,035,629 | |
Warrant exercise inducement | 366,795 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (92,993) | 73,442 |
Net investment in direct financing lease | 53,787 | 48,341 |
Other current assets | (524,943) | 450,755 |
Inventory | 47,480 | (70,040) |
Accounts payable and accrued expenses | 336,099 | 1,232,898 |
Deferred revenue | 132,018 | (36,902) |
Other liabilities | (47,809) | |
Net cash flows from operating activities | (5,521,872) | (3,131,729) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (79,703) | (8,643) |
Purchase of intangible assets | (23,702) | |
Investment in other assets | (172,880) | |
Net cash flows from investing activities | (103,405) | (181,523) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock, net of offering costs | 10,282,998 | |
Proceeds from exercise of warrants | 273,753 | 1,248,983 |
Proceeds from exercise of stock options | 24,660 | 1,510,000 |
Proceeds from paycheck protection program | 485,762 | 485,760 |
Payment of debt issuance costs | (104,800) | |
Payments on notes payable | (4,400) | |
Principal payments on capital lease obligation | (28,981) | (29,669) |
Net cash flows from financing activities | 11,033,792 | 3,110,274 |
Effect of Foreign Currencies | 59,607 | (96,653) |
Net Change in Cash | 5,468,122 | (299,631) |
Cash, Beginning of the Period | 3,765,277 | 567,081 |
Cash, End of the Period | 9,233,399 | 267,450 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 10,984 | 7,505 |
Cash paid for income taxes | 12,516 | 23,540 |
Non-cash Investing and Financing Activities: | ||
Reclass from other assets to intangible assets | 8,270 | |
Modification of warrants issued with convertible debt | 95,223 | |
Exchange of notes payable and accrued interest for convertible notes payable | 2,662,000 | |
Settlement of accounts payable with issuance of common stock | 349,376 | 8,270 |
Conversion of convertible note payable and accrued interest to common stock | $ 6,232,340 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION In the opinion of Management, the accompanying unaudited condensed consolidated financial statements are prepared in accordance with instructions for Form 10-Q and include all adjustments (consisting only of normal recurring accruals) which we considered as necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for future periods or the full year. The condensed consolidated financial statements include the accounts of Ipsidy Inc. and its wholly-owned subsidiaries MultiPay S.A.S., ID Global LATAM, IDGS S.A.S., ID Solutions, Inc., FIN Holdings Inc., Ipsidy Enterprises Limited, Cards Plus Pty Ltd. and Ipsidy Peru S.A.C. (collectively the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. Reverse Stock Split At the Annual Meeting of stockholders of the Company held on March 22, 2021, the stockholders approved an amendment to our certificate of incorporation to effect a reverse stock split at a ratio not less than 1-for-2 and not greater than 1-for-50, with the exact ratio to be set within that range at the discretion of our board of directors before December 31, 2021 On June 14, 2021 (the “Effective Time”), the Company completed a 1-for-30 reverse stock split of its Common Stock, as previously authorized at the Annual Meeting. Pursuant to the reverse stock split, at the Effective Time, every 30 issued shares of Common Stock were automatically combined into one share of Common Stock without any change in the par value per share. The par value of the Company’s Common Stock was unchanged at $0.0001 per share after the reverse stock split. As a result, on the effective date of the reverse stock split, the stated capital on the Company’s balance sheet attributable to Common Stock was reduced proportionately based on the reverse stock split ratio of 1-for-30 and the additional paid-in capital account was credited with the amount by which the stated capital was reduced. After the reverse stock split, net income or loss per share, and other per share amounts were adjusted because there are fewer shares of the Company’s Common Stock outstanding. The financial statements, net income or loss per share and other per share amounts for periods ending before the reverse stock split were recast to give retroactive effect to the reverse stock split. Going Concern As of September 30, 2021, the Company had an accumulated deficit of approximately $109.0 million. For the nine months ended September 30, 2021 the Company earned revenue of approximately $1.7 million and incurred a loss from operations of approximately $11.1 million. The reports of our independent registered public accounting firm on our consolidated financial statements for the years ended December 31, 2020 and 2019 contained an explanatory paragraph regarding our ability to continue as a going concern based upon our net losses. These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from the Company’s current shareholders, the ability of the Company to obtain additional financing to continue operations, the Company’s ability to generate sufficient cash flows from operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues and cash flows. On August 26, 2021, including 214,285 shares sold upon underwriter’s option to purchase additional shares, for gross proceeds of approximately $11.5 million, before deducting underwriting discounts and offering expenses. In November 2021, the Company filed an S-3 to register an indeterminate number of securities of each identified class of securities up to a proposed aggregate offering price of $200,000,000, which may from time to time be offered in unspecified numbers and at indeterminate prices. There is no assurance that the Company will ever be profitable or be able to secure funding or generate sufficient revenues to sustain operations. As such, there is substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Covid-19 Covid-19 emerged globally in December 2019, and it has been declared a pandemic. Covid-19 is still impacting customers, business, results and financial condition throughout the world. The Company’s day-to-day operations have been impacted differently depending on geographic location and services that are being performed. The Cards Plus business located in South Africa operations has had limitations on its operations as they are following the guidance and requirements of the South African government. Our operations in the United States and Colombia have suffered less immediate impact as most staff can work remotely and can continue to develop our product offerings. That said we have seen our business opportunities develop more slowly as business partners and potential customers include Covid-19 considerations. Furthermore, working remotely can cause a delay in decision making and finalization of negotiations and agreements. Net Loss per Common Share The Company computes net loss per share in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible notes and stock warrants, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options, warrants and conversion of convertible notes. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. The following potentially dilutive securities were excluded from the calculation of diluted loss per share for the three and nine months ended September 30, 2021 and 2020 because their effect was antidilutive: Security 2021 2020 Convertible notes payable 117,529 1,182,557 Warrants 1,413,611 1,581,774 Stock options 9,322,153 3,660,778 10,853,293 6,425,109 Inventories Inventory of plastic/ID cards, digital printing material, which are held by Cards Plus Pty Ltd., are at the lower of cost (using the average method) or market. The Plastic/ID cards and digital printing material are used to provide plastic loyal ID and other types of cards. Inventories at September 30, 2021 and December 31, 2020 consist of cards inventory. As of September 30, 2021 and December 31, 2020, the Company recorded an inventory valuation allowance of approximately $26,000 and $18,000 to reflect net realizable value of the cards inventory. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period. Revenue Recognition Cards Plus – The Company recognizes revenue for the design and production of cards at the point in time when products are shipped, or services have been performed due to the short term nature of the contracts. Additionally, the cards produced by the Company have no alternative use and the Company has an enforceable right to payment for work performed should the contract be cancelled. As of September 30, 2021 and December 31, 2020, Cards Plus had approximately $40,000 and $88,000, respectively, of contract liability from payments received in advance that will be earned in future periods. Payment Processing – The Company recognizes revenue for variable fees generated for payment processing solutions that are earned on a usage fee over time based on monthly transaction volumes or on a monthly flat fee rate. Additionally, the Company also sells certain equipment from time to time for which revenue is recognized upon delivery to the customer. Identity Solutions Software – The Company recognizes revenue based on the identified performance obligations over the performance period for fixed consideration and for variable fees generated that are earned on a usage fee based over time based on monthly transaction volumes or on a monthly flat fee rate. The Company had a contract liability of approximately $330,000 and $150,000 as of September 30, 2021 and December 31, 2020 relating to certain revenue that will be earned in future periods. The majority of the $150,000 of deferred revenue contract liability as of December 31, 2020 was earned in the first quarter of fiscal year 2021. As of September 30, 2021, the majority of the deferred revenue contract liability of $330,000 will be recognized in the ensuing two quarters. All contracts are reviewed for their respective performance obligations and related revenue and expense recognition implications. Certain of the revenues are derived from identity services that could include multiple performance obligations. A performance obligation is defined as a promise to provide a “distinct” good or service to a customer. The Company has determined that one possible treatment under U.S. GAAP is that these services will represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Further, the Company has determined that the performance obligation to provide account access and facilitate transactions should meet the criteria for the “as invoiced” practical expedient, in that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. As a result, the Company anticipates it may recognize revenue in the amount to which the Company has a right to invoice, based on completed performance at the relevant date. Additionally, the contracts could include implementation services, or support on an “as needed” basis and we will review each contract and determine whether such performance obligations are separate and distinct and apply the new standard accordingly to the revenue and expense derived from or related to each such service. Revenue related to direct financing leases is outside the scope of Topic 606 and is recognized over the term of the lease using the effective interest method. |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities, Current [Abstract] | |
OTHER CURRENT ASSETS | NOTE 2 – OTHER CURRENT ASSETS Other current assets consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Prepaid insurance $ 163,361 $ 39,117 Prepaid licensing fees 103,521 30,841 Operating lease right of use 99,667 131,568 Prepaid marketing expense 263,929 - Payroll tax receivable 85,735 - Prepaid services 175,000 - Other 38,479 36,243 $ 929,692 $ 237,769 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 3 – PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following as of September 30, 2021 and December 31, 2020: September 30, December 31, Property and equipment $ 377,622 $ 297,839 Equipment under finance lease 163,407 163,407 541,029 461,246 Less Accumulated depreciation (413,324 ) (363,417 ) Property and equipment, net $ 127,705 $ 97,829 Depreciation expense totaled $49,827 and $40,231 for the nine months ended September 30, 2021 and 2020, respectively. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2021 | |
Other Assets [Abstract] | |
OTHER ASSETS | NOTE 4 – OTHER ASSETS Other assets consisted of the following at September 30, 2021 and December 31, 2020: September 30, December 31, Operating lease right of use assets $ - $ 49,856 Other 73,243 190,367 $ 73,243 $ 240,223 |
Intangible Assets, Net (Other t
Intangible Assets, Net (Other than Goodwill) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) | NOTE 5 – INTANGIBLE ASSETS, NET (OTHER THAN GOODWILL) The Company’s intangible assets consist primarily of acquired and developed software as well as intellectual property acquired from previous acquisitions and are amortized over their estimated useful lives as indicated below. The following is a summary of activity related to intangible assets for the nine months ended September 30, 2021: Customer Relationships Acquired and Developed Software Intellectual Property Patents Total Useful Lives 10 Years 5 Years 10 Years - Carrying Value at December 31, 2020 $ 811,303 $ 3,171,394 $ 416,471 $ 128,308 $ 4,527,476 Additions - - - 23,702 23,702 Amortization (122,645 ) (699,442 ) (61,018 ) (10,504 ) (893,609 ) Carrying Value at September 30, 2021 $ 688,658 $ 2,471,952 $ 355,453 $ 141,506 $ 3,657,569 The following is a summary of intangible assets as of September 30, 2021 Customer Acquired and Intellectual Patents Total Cost $ 1,587,159 $ 4,476,273 $ 828,577 $ 155,297 $ 7,047,306 Accumulated amortization (898,501 ) (2,004,321 ) (473,124 ) (13,791 ) (3,389,737 ) Carrying Value at September 30, 2021 $ 688,658 $ 2,471,952 $ 355,453 $ 141,506 $ 3,657,569 Amortization expense totaled approximately $894,000 and $883,000 for the nine months ended September 30, 2021 and 2020, respectively. Future expected amortization of intangible assets is as follows: Fiscal Year Ending December 31, Remainder of 2021 $ 297,060 2022 1,094,905 2023 1,043,916 2024 819,604 2025 302,986 Thereafter 99,098 $ 3,657,569 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following as of September 30, 2021 and December 31, 2020: September 30, December 31, Trade payables $ 769,602 $ 311,024 Accrued interest* 17,469 554,755 Accrued payroll and related obligations 656,938 891,790 Current portion of operating lease liabilities 100,290 117,414 Other** 577,958 790,149 Total $ 2,122,257 $ 2,665,132 * In June 2021, the majority of the accrued interest was converted into common stock. See Note 8. * * Included in Other expenses was accrued non-employee Directors’ Compensation of approximately $349,000 at December 31, 2020. In May 2021, the non-employee Directors were compensated for their service through a grant of stock options and therefore the balance of the accrual for Director’s Compensation was $ 0 as of September 30, 2021. See Note 10. |
Notes Payable, Net
Notes Payable, Net | 9 Months Ended |
Sep. 30, 2021 | |
Notes Payable [Abstract] | |
NOTES PAYABLE, NET | NOTE 7 - NOTES PAYABLE, NET The following is a summary of notes payable as of September 30, 2021 and December 31, 2020: September 30, December 31, Paycheck Protection Program Loan #1 $ - $ 485,760 Paycheck Protection Program Loan #2 - - Installment loan payable related to a vehicle acquisition payable in monthly payments of $539 per month at an interest rate of 10.8% per annum payable for 36 months 3,126 7,526 Notes Payable, Net $ 3,126 $ 493,286 Notes Payable, current portion, $ 3,126 $ 5,947 Notes Payable, net of current portion - 487,339 $ 3,126 $ 493,286 Paycheck Protection Program Loans In May 2020, the Company received a loan of approximately $486,000 under the Paycheck Protection Program (“PPP”) as part of the Coronavirus Aid, Relief and Economic Security Act which is administered by the U.S. Small Business Association (“USSBA”) related to its U.S. Operations. The Company received notice from the USSBA in May 2021, that the May 2020 PPP loan was forgiven as we met the applicable requirements. In January 2021, the Company received a second loan of approximately $486,000 under the PPP related to its U.S. Operations. The Company received notice from the USSBA in August 2021, that the January 2021 PPP loan was forgiven as the Company met the applicable requirements. In accordance with ASC 470, extinguishment accounting, the amount forgiven by the USSBA is recorded as other income – gain on extinguishment of notes payable. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 8 – CONVERTIBLE NOTES PAYABLE On December 13, 2019, the Company entered into Securities Purchase Agreements with several accredited investors (the “8% Note Investors”) providing for the sale by the Company to the 8% Note Investors of 8% Convertible Notes in the aggregate amount of $428,000 (the “8% Notes”). The 8% Notes were to mature on November 30, 2021 and were a general unsecured obligation of the Company. In February 2020, the Company and the holders of the 8% Notes entered into an amendment agreement pursuant to which the principal and interest due under the 8% Notes will remain due and payable on the same terms as exist in the 8% Notes prior to modification, that the maturity shall be extended to the same maturity date as the 2020 Notes, namely February 28, 2022, and the 8% Notes became a secured obligation of the Company. On February 14, 2020 the Company, entered into Securities Purchase Agreements with several accredited investors (the “2020 Note Investors”) providing for the sale by the Company to the 2020 Note Investors of 15% Senior Secured Convertible Notes in the aggregate amount of $1,510,000 (the “2020 Notes”). Philip D. Beck, Chief Executive Officer and Chairman of the Board, invested $50,000 in consideration of a 2020 Note in the principal amount of $50,000 paid by a deduction from his salary. Theodore Stern, a former director of the Company, invested $50,000 in consideration of a 2020 Note in the principal amount of $50,000. Herbert Selzer, a former director of the Company invested $100,000 in consideration of a 2020 Note in the principal amount of $100,000. Mr. Selzer provided $50,000 on the closing date and provided the balance of the funding in April 2020. The 2020 Notes mature February 28, 2022 and are a secured obligation of the Company. At the option of the 2020 Note Investors, they may at any time convert the 2020 Notes. The number of shares delivered shall be equal to 150% of the amount of the principal converted divided by the conversion price of $6.00 per share. The Company may require that the 2020 Note Investors convert all or a portion of the 2020 Notes, if the Company’s volume weighted average price for any preceding 20-day period is equal to or greater than $9.00. In connection with this private offering, the Company paid Network 1 Financial Securities, Inc., a registered broker-dealer, a cash fee of approximately $104,800. During the first quarter of 2021, convertible notes totaling $120,000 and a portion of their accrued interest at the option of the noteholders were converted into approximately 33,000 shares of common stock of the Company. Additionally, during the nine months ended September 30, 2021, the Company received conversion notices from (i) the Stern Trust converting the principal amount, repayment premium and interest in the amount of approximately $3.5 million payable under the Restated Stern Note into approximately 561,000 shares of common stock, (ii) the 8% Note Investors converting principal and interest in the amount of approximately $0.4 million into approximately 180,000 shares of common stock and (iii) the 2020 Note Investors converting principal, repayment premium and interest in the amount of approximately $2.5 million into approximately 398,000 shares of common stock. The Stern Trust is owed approximately $0.7 million in interest under the Restated Stern Note, which has not been converted and remains outstanding. As a result, a total of approximately $6.1 million of Company net indebtedness was converted and the Company issued approximately 1,138,000 shares of common stock in the aggregate. The following is a summary of the convertible notes payable outstanding at September 30, 2021: 8% convertible notes payable issued December 2019 $ - 15% convertible notes payable issued February 2020 - 10% convertible notes payable issued February 2020 662,000 $ 662,000 Future maturities of convertible notes payable are as follows: 2021 $ - 2022 662,000 $ 662,000 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 – RELATED PARTY TRANSACTIONS Convertible Notes Payable In 2021, the Company received conversion notices from Stern Trust of which Theodore Stern, (a former member of the Board of Directors until June 9, 2021) is the Trustee, converting the principal amount, repayment premium and interest in the amount of approximately $3.5 million payable under the Restated Stern Note into approximately 561,000 shares of common stock. Additionally, Theodore Stern and Herbert Selzer (also a former member of the Board of Directors until June 9, 2021) provided conversion notices for their respective 2020 Notes converting the principal, repayment premium and interest in the amount of approximately $256,000 into approximately 41,000 shares of common stock. The Stern Trust is owed approximately $0.7 million in interest under the Restated Stern Note, which has not been converted and remains outstanding. Executive Officers On June 14, 2021, Phillip L. Kumnick resigned as Chief Executive Officer of Ipsidy Inc., and Thomas L. Thimot was appointed Chief Executive Officer in his place. Further, Philip R. Broenniman resigned as President and Chief Operating Officer and Cecil N. Smith III (Tripp) was appointed President and Chief Technology Officer. In May 2021 the Company granted to each of Mr. Kumnick and Mr. Broenniman options (the “May 2021 Options”) to acquire a total of 1,166,667 shares of common stock at an exercise price of $7.20 per share for a term of ten years that vest upon the achievement of certain market capitalization thresholds, or performance conditions. In November 2021 Mr. Kumnick and Mr. Broenniman agreed to cancel 300,000 and 200,000, respectively, of these stock options in consideration of removing certain service conditions. Mr. Thomas Thimot and Mr. Cecil Smith, became employed by the Company as Chief Executive Officer and President and Chief Technology Officer effective June 14, 2021. Mr. Thimot and the Company entered into an Offer Letter pursuant to which Mr. Thimot will earn an annual salary of $325,000 with a bonus target at 50% of the base salary (pro-rated for 2021) upon terms to be agreed with the Compensation Committee for 2021 and on the understanding that the 2022 target will include a requirement of the Company achieving three times the annual revenue of 2021. Additionally, Mr. Thimot was granted an option to acquire 1,200,000 shares of common stock at an exercise price of $7.80 per share for a term of ten years of which half of the options vest monthly over four years and the balance is subject to certain performance vesting requirements. On June 14, 2021, Mr. Smith and the Company entered an into an Offer Letter pursuant to which Mr. Smith will earn an annual salary of $275,000 with a bonus target at 50% of the base salary (pro-rated for 2021) upon terms to be agreed with the Compensation Committee for 2021. In addition, Mr. Smith will receive a bonus of $50,000 after 90 days of service. Additionally. Mr. Smith was granted an option to acquire 600,000 shares of common stock at an exercise price of $7.80 per share for a term of ten years of which half of the options vest monthly over four years and the balance is subject to certain performance vesting requirements. Appointment of Board of Directors On June 9, 2021 Theodore Stern, Herbert Selzer and Thomas Szoke resigned as directors of the Company. The size of the Board of directors was increased to seven and Dr. Michael A. Gorriz, Michael L. Koehneman, Sanjay Puri, Mr. Thimot and Jacqueline L. White were appointed as additional directors of the Company. Messrs. Stern, Selzer and Szoke did not advise the Company of any disagreement with the Company on any matter relating to its operations, policies or practices. Mr. Szoke will continue with the Company as Chief Solutions Architect. The Company granted each of the four new Board of Directors as of June 2021 stock options to acquire 62,500 shares of common stock or a total of 250,000 at an exercise price of $7.80 per share for a term of ten years that vest one third per year after each Annual Meeting. The Company granted the previously serving Board of Directors stock options to acquire 93,470 common shares that are vested as the services were previously rendered. The stock options were granted in lieu of other forms of Board of Director Compensation. The Company also granted Mr. Selzer and Mr. Stern 22,388 stock options to acquire common shares for service in 2021 prior to their resignation as Board Members. Upon their resignation as directors in June 2021, 13,992 stock options were vested and the balance was cancelled. Other In the third quarter of 2021, the Company and Progress Partners Inc. (“Progress”) modified their Business Advisory Agreement dated May 6, 2020 (“Progress Agreement”). The amended Progress Agreement provides for Progress to undertake continuing business development activities for the Company, for which the Company agreed to pay Progress $350,000 which was paid, October 15, 2021. Additionally, the Company agreed to pay Progress, another $115,000 for additional consulting services. Mr. Puri, a Director of the Company beginning June 9, 2021 is an employee and Managing Director of Progress but is not a principal shareholder nor an executive officer of Progress. |
Stockholder's Equity
Stockholder's Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDER'S EQUITY | NOTE 10 STOCKHOLDER’S EQUITY Common Stock On August 26, 2021, the Company completed the Offering of 1,642,856 shares of its common stock at a public offering price of $7.00 per share, including 214,285 shares sold upon underwriter’s option to purchase additional shares, for gross proceeds of approximately $11.5 million, before deducting underwriting discounts and offering expenses. During the nine months ended September 30, 2021, shares of common stock were issued as a result of the following non-cash transactions: ● In the first quarter of 2021, convertible notes totaling $120,000 and a portion of their accrued interest at the option of the noteholders were converted into approximately 33,000 shares of common stock of the Company ● Additionally, during the three and nine months ended September 30, 2021, the Company received conversion notices from (i) the Stern Trust converting the principal amount, repayment premium and interest in the amount of approximately $3.5 million payable under the Restated Stern Note into approximately 561,000 shares of common stock, (ii) the 8% Note Investors converting principal and interest in the amount of approximately $0.4 million into approximately 180,000 shares of common stock and (iii) the 2020 Note Investors converting principal, repayment premium and interest in the amount of approximately $2.5 million into approximately 398,000 shares of common stock. The Stern Trust is owed approximately $0.7 million in interest under the Restated Stern Note, which has not been converted and remains outstanding. As a result, a total of approximately $6.1 million of Company indebtedness was converted and the Company issued approximately 1,138,000 shares of common stock in the aggregate. ● Certain warrant and stock option holders exercised their respective warrants and stock options by means of the cashless exercise feature and were issued approximately 549,000 common shares of the Company. Warrants The following is a summary of the Company’s warrant activity for the nine months ended September 30, 2021: Weighted Weighted Number of Exercise Remaining Shares Price Life Outstanding at December 31, 2020 1,823,267 $ 4.20 3.4 Years Granted 64,286 $ 8.75 4.3 Years Exercised/cancelled (473,942 ) $ 3.20 4.2 years Outstanding at September 30, 2021 1,413,611 $ 4.61 3.2 Years Under the terms of the Underwriting Agreement in connection with the Offering, the Company issued underwriters warrants (the “Representative’s Warrants”) to purchase an aggregate of 64,286 shares of common stock (4.5% of the total shares issued in the Offering). The Representative’s Warrants are exercisable at a per share price of $8.75 (equal to 125% of the Offering price of the Company’s common stock). The Representative’s Warrants are exercisable for a term of four and one half years beginning on February 23, 2022. Stock Options During the nine months ended September 30, 2021, the Company determined the grant date fair value of the options granted using the Black Scholes Method and use the following assumptions: Expected Volatility – 68-75% Expected Term – 5.0 Years Risk Free Rate – 0.70- 0.78% Dividend Rate – 0.00% Activity related to stock options for the nine months ended September 30, 2021 is summarized as follows: ● The Company granted Mr. Thimot and Mr. Smith stock options to acquire 1,200,000 and 600,000 shares of common stock respectively upon their employment of which half of the options vest monthly over four years and the balance vest upon the achievement of certain market capitalization thresholds or performance conditions. ● The Company granted each of Mr. Kumnick and Mr. Broenniman stock options to acquire 583,333 shares of common stock that vest upon the achievement of certain market capitalization thresholds or performance conditions. In November 2021 Mr. Kumnick and Mr. Broenniman agreed to cancel 300,000 and 200,000, respectively, of these stock options in consideration of removing certain service conditions. ● The Company granted each of the four new Board of Directors as of June 2021 stock options to acquire 62,500 shares of common stock or a total of 250,000 that vest one third a year after each Annual Meeting. ● The Company granted the previously serving Board of Directors stock options to acquire 93,470 common shares that are vested as the services were rendered. The stock options were granted in lieu of other forms of Board of Director Compensation and was used to eliminate previously accrued Board of Director compensation. The Company also granted to each of Mr. Selzer and Mr. Stern 22,388 stock options to acquire common shares for service in 2021 prior to their resignation as Board Members. Upon their resignation as directors in June 2021, 6,997 stock options to each of them were vested and the balance was cancelled. ● The Company granted options to acquire 1,003,334 shares of common stock to employees. The options for 803,334 vest annually over a three-year period, 100,000 vest equally over a four-year period, and the balance of 100,000 vest upon the achievement of certain market capitalization thresholds or performance conditions. The options have a term of ten years and all options were granted at market value. Activity related to stock options for the nine months ended September 30, 2021, is summarized as follows: Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding as of December 31, 2020 5,645,802 $ 4.50 7.5 $ 8,823,639 Granted 4,358,246 $ 7.95 10.0 - Exercised (504,804 ) $ 1.54 5.0 $ 3,485,482 Forfeited/cancelled (177,091 ) $ 4.30 8.8 - Outstanding as of September 30, 2021 9,322,153 $ 6.28 7.1 $ 48,380,894 Exercisable as of September 30, 2021 4,708,113 $ 5.15 4.5 $ 30,866,033 The following table summarizes stock option information as of September 30, 2021: Exercise Price Outstanding Weighted Exercisable $.03 - $4.00 3,664,901 4.9 3,208,347 $4.01 - $7.00 162,784 4.7 162,784 $7.01 - $10.00 4,007,801 9.6 270,315 $10.01 - $13.50 1,486,667 4.3 1,066,667 9,322,153 7.1 4,708,113 During the nine months ended September 30, 2021, the Company recognized approximately $3,567,000 of stock option compensation expense of which approximately $2,388,000 relates to performance-based awards of directors and officers. As of September 30, 2021, there was approximately $15,443,000 of unrecognized compensation costs related to stock options outstanding that are expected to be expensed through 2025. Additionally, the Company recorded approximately $1,228,000 for restricted stock expense as the Company met certain performance thresholds. Total stock-based compensation expense consisting of stock options and restricted stock in the nine months ended September 30, 2021 was approximately $4,795,000. At the Annual Meeting of Stockholders held on March 22, 2021, the stockholders approved and ratified an increase of 2,500,000 shares of common stock allocated to the Company’s 2017 Incentive Stock Plan. See Note 6 for additional information regarding accrued Directors’ compensation. |
Direct Financing Lease
Direct Financing Lease | 9 Months Ended |
Sep. 30, 2021 | |
Direct Financing Lease [Abstract] | |
DIRECT FINANCING LEASE | NOTE 11 – DIRECT FINANCING LEASE The Company and an entity in Colombia entered into a rental contract for the rental of 78 kiosks to provide cash collection and fare services at transportation stations. The lease term began in May 2016 when the kiosk was installed and operational and when the lease commenced. The term of the rental contract is ten years at an approximate monthly rental of $11,900. The lease has the option at the end of the lease term to purchase each unit for approximately $40. The term of the lease approximates the expected economic life of the kiosks. The lease was accounted for as a direct financing lease. The Company has recorded the transaction as its net investment in the lease and will receive monthly payments of $11,856 before estimated executory costs, or $142,272, annually, to reduce investment in the lease and record income associated with the related amount due. Executory costs are estimated to be $1,677 per month and initial direct costs are not considered significant. The transaction resulted in incremental revenue in the quarter ended September 30, 2021 of approximately $38,000. The equipment is subject to a direct lease valued at approximately $748,000. At the inception of the lease term, the aggregate minimum future lease payments to be received is approximately $1,422,000 before executory cost. Unearned income recorded at the inception of this lease was approximately $474,000 and will be recorded over the term of the lease using the effective income rate method. Future minimum lease payments to be received under the lease for the next five years and thereafter are as follows: Year ending December 31 Remainder of 2021 30,537 2022 122,148 2023 122,148 2024 122,148 2025 122,148 Thereafter 40,716 Sub-total 559,845 Less deferred revenue (118,929 ) Net investment in lease $ 440,916 |
Lease Obligation Payable
Lease Obligation Payable | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
LEASE OBLIGATION PAYABLE | NOTE 12 – LEASE OBLIGATION PAYABLE The Company entered into a lease in March 2017 for the rental of its printer for its secured plastic and credential card products business under an arrangement that is classified as a finance lease. The leased equipment is amortized on a straight-line basis over its lease term including the last payment (61 payments) which would transfer ownership to the Company. The cost basis of the lease equipment is $163,407 and the accumulated amortization as of September 30, 2021 is $147,334. The following is a schedule showing the future minimum lease payments under finance lease by year and the present value of the minimum lease payments as of September 30, 2021. The interest rate related to the lease obligation is 12% and the maturity date is March 31, 2022. Year ending December 31 Remainder of 2021 $ 10,774 2022 10,774 Total minimum lease payments 21,548 Less: Amount representing interest (735 ) Present value of minimum lease payments $ 20,813 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company is a party to various legal or administrative proceedings arising in the ordinary course of our business. While any litigation contains an element of uncertainty, we have no reason to believe the outcome of such proceedings will have a material adverse effect on the financial condition or results of operations of the Company. Leases For the nine months ended September 30, 2021, lease expense was approximately $141,000 inclusive of short-term leases. The lease related balances included in the Condensed Consolidated Balance Sheet as of September 30, 2021 were as follows: Assets: Current portion of operating lease ROU assets - included in other current assets $ 99,667 Operating lease ROU assets – included in Other Assets $ - Total operating lease assets $ 99,667 Liabilities: Current portion of ROU liabilities – included in Accounts payable and accrued expenses $ 100,290 Long-term portion of ROU liabilities – included in Other liabilities - Total operating lease liabilities $ 100,290 The weighted average lease of the remaining term is 1.0 year or less and weighted average discount rate used in the calculations was 13.55%. The following table presents the maturity of the Company’s operating lease liabilities as of September 30, 2021: Remainder of 2021 $ 34,692 2022 66,564 Total operating lease payments 101,256 Imputed interest (966 ) Total operating lease liabilities $ 100,290 The Company rents office space in Long Beach, New York at a monthly cost of $2,500. The agreement is month to month and can be terminated on 30 days’ notice. The Company leased an office location in Bogota, Colombia with a base rent of approximately $8,500 per month which was adjusted for inflation when compared to its initial lease date in 2017. The lease expired in April 2021. In April 2021, MultiPay entered into a six-month lease for a monthly rental of approximately $1,375 which terminated in September 2021. In October 2021, MultiPay entered into a one-year lease for approximately $2,900 per month. The Company also leases space for its operation in South Africa. The current lease is through June 30, 2022 and the approximate monthly rent is $8,000. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 14 – SEGMENT INFORMATION General information The segment and geographic information provided in the table below is being reported consistent with the Company’s method of internal reporting. Operating segments are defined as components of an enterprise for which separate financial information is available and which is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM regularly reviews net revenue and gross profit by geographic regions. The Company’s products and services operate in two reportable segments; identity management and payment processing. Information about revenue, profit/loss and assets The CODM evaluates performance and allocates resources based on net revenue and operating results of the geographic region as the current operations of each geography are either primarily identity management or payment processing. Identity management revenue is generated in North America and Africa and payment processing revenue is earned in South America which are the three geographic regions of the Company. We have included the lease income in payment processing as the leases are related to unattended ticketing kiosks. Long lived assets are in North America, South America and Africa. Most assets are intangible assets recorded from the acquisition of MultiPay (South America) in 2015 and FIN Holdings (North America and Africa) in 2016. Long-lived assets for North America, South America and Africa amounted to approximately $7.7 million, $0.1 million and $0.2 million consisting of property and equipment – net, intangible assets – net and goodwill. Analysis of revenue by segment and geographic region and reconciliation to consolidated revenue, gross profit, and net loss are provided below. The Company has included in the schedule below an allocation of corporate overhead based on management’s estimate of resource requirements. (Unaudited) Three Months Ended Nine Months Ended September September, September, September, 2021 2020 2021 2020 Net Revenues: North America $ 162,433 $ 176,448 $ 464,181 $ 445,700 South America 89,581 106,453 275,179 292,208 Africa 276,335 232,791 955,769 892,692 528,349 515,692 1,695,129 1,630,600 Identity Management 438,768 409,239 1,419,950 1,338,392 Payment Processing 89,581 106,453 275,179 292,208 528,349 515,692 1,695,129 1,630,600 Loss From Operations North America (3,614,358 ) (562,729 ) (6,902,429 ) (1,536,138 ) South America (1,655,667 ) (937,281 ) (3,440,771 ) (4,852,094 ) Africa (392,624 ) (211,276 ) (796,946 ) (802,283 ) (5,662,649 ) (1,711,286 ) (11,140,146 ) (7,190,515 ) Identity Management (4,010,982 ) (774,005 ) (7,699,375 ) (2,338,421 ) Payment Processing (1,655,667 ) (937,281 ) (3,440,771 ) (4,852,094 ) (5,662,649 ) (1,711,286 ) (11,140,146 ) (7,190,515 ) Interest Expense (25,780 ) (212,658 ) (579,768 ) (701,861 ) Other income/(expense) 492,498 16,779 985,916 (1,301,192 ) Loss before income taxes (3,015,256 ) (1,907,165 ) (10,733,998 ) (9,193,568 ) Income tax expense (2,974 ) (11,074 ) (12,516 ) (23,540 ) Net loss $ (5,198,905 ) $ (1,918,239 ) $ (10,746,514 ) $ (9,217,108 ) |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of potentially dilutive securities | Security 2021 2020 Convertible notes payable 117,529 1,182,557 Warrants 1,413,611 1,581,774 Stock options 9,322,153 3,660,778 10,853,293 6,425,109 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities, Current [Abstract] | |
Schedule of other current assets | September 30, 2021 December 31, 2020 Prepaid insurance $ 163,361 $ 39,117 Prepaid licensing fees 103,521 30,841 Operating lease right of use 99,667 131,568 Prepaid marketing expense 263,929 - Payroll tax receivable 85,735 - Prepaid services 175,000 - Other 38,479 36,243 $ 929,692 $ 237,769 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, December 31, Property and equipment $ 377,622 $ 297,839 Equipment under finance lease 163,407 163,407 541,029 461,246 Less Accumulated depreciation (413,324 ) (363,417 ) Property and equipment, net $ 127,705 $ 97,829 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Assets [Abstract] | |
Schedule of other assets | September 30, December 31, Operating lease right of use assets $ - $ 49,856 Other 73,243 190,367 $ 73,243 $ 240,223 |
Intangible Assets, Net (Other_2
Intangible Assets, Net (Other than Goodwill) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | Customer Relationships Acquired and Developed Software Intellectual Property Patents Total Useful Lives 10 Years 5 Years 10 Years - Carrying Value at December 31, 2020 $ 811,303 $ 3,171,394 $ 416,471 $ 128,308 $ 4,527,476 Additions - - - 23,702 23,702 Amortization (122,645 ) (699,442 ) (61,018 ) (10,504 ) (893,609 ) Carrying Value at September 30, 2021 $ 688,658 $ 2,471,952 $ 355,453 $ 141,506 $ 3,657,569 Customer Acquired and Intellectual Patents Total Cost $ 1,587,159 $ 4,476,273 $ 828,577 $ 155,297 $ 7,047,306 Accumulated amortization (898,501 ) (2,004,321 ) (473,124 ) (13,791 ) (3,389,737 ) Carrying Value at September 30, 2021 $ 688,658 $ 2,471,952 $ 355,453 $ 141,506 $ 3,657,569 |
Schedule of future expected amortization of intangible assets | Fiscal Year Ending December 31, Remainder of 2021 $ 297,060 2022 1,094,905 2023 1,043,916 2024 819,604 2025 302,986 Thereafter 99,098 $ 3,657,569 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | September 30, December 31, Trade payables $ 769,602 $ 311,024 Accrued interest* 17,469 554,755 Accrued payroll and related obligations 656,938 891,790 Current portion of operating lease liabilities 100,290 117,414 Other** 577,958 790,149 Total $ 2,122,257 $ 2,665,132 * In June 2021, the majority of the accrued interest was converted into common stock. See Note 8. * * Included in Other expenses was accrued non-employee Directors’ Compensation of approximately $349,000 at December 31, 2020. In May 2021, the non-employee Directors were compensated for their service through a grant of stock options and therefore the balance of the accrual for Director’s Compensation was $ 0 as of September 30, 2021. See Note 10. |
Notes Payable, Net (Tables)
Notes Payable, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Notes Payable [Abstract] | |
Schedule of notes payable | September 30, December 31, Paycheck Protection Program Loan #1 $ - $ 485,760 Paycheck Protection Program Loan #2 - - Installment loan payable related to a vehicle acquisition payable in monthly payments of $539 per month at an interest rate of 10.8% per annum payable for 36 months 3,126 7,526 Notes Payable, Net $ 3,126 $ 493,286 Notes Payable, current portion, $ 3,126 $ 5,947 Notes Payable, net of current portion - 487,339 $ 3,126 $ 493,286 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable outstanding | 8% convertible notes payable issued December 2019 $ - 15% convertible notes payable issued February 2020 - 10% convertible notes payable issued February 2020 662,000 $ 662,000 |
Schedule of future maturities of convertible note payable | 2021 $ - 2022 662,000 $ 662,000 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of warrant activity | Weighted Weighted Number of Exercise Remaining Shares Price Life Outstanding at December 31, 2020 1,823,267 $ 4.20 3.4 Years Granted 64,286 $ 8.75 4.3 Years Exercised/cancelled (473,942 ) $ 3.20 4.2 years Outstanding at September 30, 2021 1,413,611 $ 4.61 3.2 Years |
Schedule of outstanding stock options | Weighted Weighted Average Average Aggregate Number of Exercise Contractual Intrinsic Shares Price Term (Yrs.) Value Outstanding as of December 31, 2020 5,645,802 $ 4.50 7.5 $ 8,823,639 Granted 4,358,246 $ 7.95 10.0 - Exercised (504,804 ) $ 1.54 5.0 $ 3,485,482 Forfeited/cancelled (177,091 ) $ 4.30 8.8 - Outstanding as of September 30, 2021 9,322,153 $ 6.28 7.1 $ 48,380,894 Exercisable as of September 30, 2021 4,708,113 $ 5.15 4.5 $ 30,866,033 |
Schedule of stock option | Exercise Price Outstanding Weighted Exercisable $.03 - $4.00 3,664,901 4.9 3,208,347 $4.01 - $7.00 162,784 4.7 162,784 $7.01 - $10.00 4,007,801 9.6 270,315 $10.01 - $13.50 1,486,667 4.3 1,066,667 9,322,153 7.1 4,708,113 |
Direct Financing Lease (Tables)
Direct Financing Lease (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Direct Financing Lease [Abstract] | |
Schedule of future minimum lease payments to be received | Year ending December 31 Remainder of 2021 30,537 2022 122,148 2023 122,148 2024 122,148 2025 122,148 Thereafter 40,716 Sub-total 559,845 Less deferred revenue (118,929 ) Net investment in lease $ 440,916 |
Lease Obligation Payable (Table
Lease Obligation Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of lease obligation payable | Year ending December 31 Remainder of 2021 $ 10,774 2022 10,774 Total minimum lease payments 21,548 Less: Amount representing interest (735 ) Present value of minimum lease payments $ 20,813 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of related lease balance | Current portion of operating lease ROU assets - included in other current assets $ 99,667 Operating lease ROU assets – included in Other Assets $ - Total operating lease assets $ 99,667 Current portion of ROU liabilities – included in Accounts payable and accrued expenses $ 100,290 Long-term portion of ROU liabilities – included in Other liabilities - Total operating lease liabilities $ 100,290 |
Schedule of maturity of the company's operating lease liabilities | Remainder of 2021 $ 34,692 2022 66,564 Total operating lease payments 101,256 Imputed interest (966 ) Total operating lease liabilities $ 100,290 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of geographic region and reconciliation consolidated revenue, gross profit, and net loss | (Unaudited) Three Months Ended Nine Months Ended September September, September, September, 2021 2020 2021 2020 Net Revenues: North America $ 162,433 $ 176,448 $ 464,181 $ 445,700 South America 89,581 106,453 275,179 292,208 Africa 276,335 232,791 955,769 892,692 528,349 515,692 1,695,129 1,630,600 Identity Management 438,768 409,239 1,419,950 1,338,392 Payment Processing 89,581 106,453 275,179 292,208 528,349 515,692 1,695,129 1,630,600 Loss From Operations North America (3,614,358 ) (562,729 ) (6,902,429 ) (1,536,138 ) South America (1,655,667 ) (937,281 ) (3,440,771 ) (4,852,094 ) Africa (392,624 ) (211,276 ) (796,946 ) (802,283 ) (5,662,649 ) (1,711,286 ) (11,140,146 ) (7,190,515 ) Identity Management (4,010,982 ) (774,005 ) (7,699,375 ) (2,338,421 ) Payment Processing (1,655,667 ) (937,281 ) (3,440,771 ) (4,852,094 ) (5,662,649 ) (1,711,286 ) (11,140,146 ) (7,190,515 ) Interest Expense (25,780 ) (212,658 ) (579,768 ) (701,861 ) Other income/(expense) 492,498 16,779 985,916 (1,301,192 ) Loss before income taxes (3,015,256 ) (1,907,165 ) (10,733,998 ) (9,193,568 ) Income tax expense (2,974 ) (11,074 ) (12,516 ) (23,540 ) Net loss $ (5,198,905 ) $ (1,918,239 ) $ (10,746,514 ) $ (9,217,108 ) |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Nov. 30, 2021 | Aug. 26, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Basis of Presentation (Details) [Line Items] | ||||
Stock price (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||
Accumulated deficit | $ 109,000,000 | |||
Earned revenue amount | 1,700,000 | |||
Loss from operation | 11,100,000 | |||
Aggregate offering price | $ 200,000,000 | |||
Inventory valuation allowance | 26,000 | $ 18,000 | ||
Cards Plus | 40,000 | 88,000 | ||
Contract liability | 330,000 | 150,000 | ||
Deferred revenue contract liability | $ 330,000 | $ 150,000 | ||
Public Offering [Member] | ||||
Basis of Presentation (Details) [Line Items] | ||||
Shares of common stock (in Shares) | 1,642,856 | |||
Share issued, per share (in Dollars per share) | $ 7 | |||
Sale of stock (in Shares) | 214,285 | |||
Gross proceeds | $ 11,500,000 |
Basis of Presentation (Detail_2
Basis of Presentation (Details) - Schedule of potentially dilutive securities - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Basis of Presentation (Details) - Schedule of potentially dilutive securities [Line Items] | ||
Number of shares | 10,853,293 | 6,425,109 |
Convertible notes payable [Member] | ||
Basis of Presentation (Details) - Schedule of potentially dilutive securities [Line Items] | ||
Number of shares | 117,529 | 1,182,557 |
Warrants [Member] | ||
Basis of Presentation (Details) - Schedule of potentially dilutive securities [Line Items] | ||
Number of shares | 1,413,611 | 1,581,774 |
Stock options [Member] | ||
Basis of Presentation (Details) - Schedule of potentially dilutive securities [Line Items] | ||
Number of shares | 9,322,153 | 3,660,778 |
Other Current Assets (Details)
Other Current Assets (Details) - Schedule of other current assets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of other current assets [Abstract] | ||
Prepaid insurance | $ 163,361 | $ 39,117 |
Prepaid licensing fees | 103,521 | 30,841 |
Operating lease right of use | 99,667 | 131,568 |
Prepaid marketing expense | 263,929 | |
Payroll tax receivable | 85,735 | |
Prepaid services | 175,000 | |
Other | 38,479 | 36,243 |
Total | $ 929,692 | $ 237,769 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 49,827 | $ 40,231 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of property and equipment - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 541,029 | $ 461,246 |
Less Accumulated depreciation | (413,324) | (363,417) |
Property and equipment, net | 127,705 | 97,829 |
Property and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 377,622 | 297,839 |
Equipment under finance lease [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 163,407 | $ 163,407 |
Other Assets (Details) - Schedu
Other Assets (Details) - Schedule of other assets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of other assets [Abstract] | ||
Operating lease right of use assets | $ 49,856 | |
Other | 73,243 | 190,367 |
Total other assets | $ 73,243 | $ 240,223 |
Intangible Assets, Net (Other_3
Intangible Assets, Net (Other than Goodwill) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 894,000 | $ 883,000 |
Intangible Assets, Net (Other_4
Intangible Assets, Net (Other than Goodwill) (Details) - Schedule of intangible assets, net | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Carrying Value at beginning | $ 4,527,476 |
Additions | 23,702 |
Amortization | (893,609) |
Carrying Value at ending | 3,657,569 |
Cost | 7,047,306 |
Accumulated amortization | $ (3,389,737) |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | 10 years |
Carrying Value at beginning | $ 811,303 |
Additions | |
Amortization | (122,645) |
Carrying Value at ending | 688,658 |
Cost | 1,587,159 |
Accumulated amortization | $ (898,501) |
Acquired and Developed Software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | 5 years |
Carrying Value at beginning | $ 3,171,394 |
Additions | |
Amortization | (699,442) |
Carrying Value at ending | 2,471,952 |
Cost | 4,476,273 |
Accumulated amortization | $ (2,004,321) |
Intellectual Property [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | 10 years |
Carrying Value at beginning | $ 416,471 |
Additions | |
Amortization | (61,018) |
Carrying Value at ending | 355,453 |
Cost | 828,577 |
Accumulated amortization | $ (473,124) |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Lives | |
Carrying Value at beginning | $ 128,308 |
Additions | 23,702 |
Amortization | (10,504) |
Carrying Value at ending | 141,506 |
Cost | 155,297 |
Accumulated amortization | $ (13,791) |
Intangible Assets, Net (Other_5
Intangible Assets, Net (Other than Goodwill) (Details) - Schedule of future expected amortization of intangible assets | Sep. 30, 2021USD ($) |
Schedule of future expected amortization of intangible assets [Abstract] | |
Remainder of 2021 | $ 297,060 |
2022 | 1,094,905 |
2023 | 1,043,916 |
2024 | 819,604 |
2025 | 302,986 |
Thereafter | 99,098 |
Total | $ 3,657,569 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Non-employee directors’ compensation | $ 0 | $ 349,000 |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of accounts payable and accrued expenses [Abstract] | |||
Trade payables | $ 769,602 | $ 311,024 | |
Accrued interest | [1] | 17,469 | 554,755 |
Accrued payroll and related obligations | 656,938 | 891,790 | |
Current portion of operating lease liabilities | 100,290 | 117,414 | |
Other | [1],[2] | 577,958 | 790,149 |
Total | $ 2,122,257 | $ 2,665,132 | |
[1] | In June 2021, the majority of the accrued interest was converted into common stock. See Note 8. | ||
[2] | Included in Other expenses was accrued non-employee Directors’ Compensation of approximately $349,000 at December 31, 2020. In May 2021, the non-employee Directors were compensated for their service through a grant of stock options and therefore the balance of the accrual for Director’s Compensation was $ 0 as of September 30, 2021. See Note 10. |
Notes Payable, Net (Details)
Notes Payable, Net (Details) - USD ($) | Jan. 31, 2021 | May 31, 2020 |
Senior Unsecured Note [Member] | ||
Notes Payable, Net (Details) [Line Items] | ||
Loan amount | $ 486,000 | $ 486,000 |
Notes Payable, Net (Details) -
Notes Payable, Net (Details) - Schedule of notes payable - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of notes payable [Abstract] | ||
Paycheck Protection Program Loan #1 | $ 485,760 | |
Paycheck Protection Program Loan #2 | ||
Installment loan payable related to a vehicle acquisition payable in monthly payments of $539 per month at an interest rate of 10.8% per annum payable for 36 months | 3,126 | 7,526 |
Notes Payable, Net | 3,126 | 493,286 |
Notes Payable, current portion, | 3,126 | 5,947 |
Notes Payable, net of current portion | 487,339 | |
Total | $ 3,126 | $ 493,286 |
Notes Payable, Net (Details) _2
Notes Payable, Net (Details) - Schedule of notes payable (Parentheticals) - Vehicle [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Notes Payable, Net (Details) - Schedule of notes payable (Parentheticals) [Line Items] | ||
Monthly payments | $ 539 | $ 539 |
Interest rate | 10.80% | 10.80% |
Debt term | 36 months | 36 months |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2020 | Feb. 14, 2020 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Dec. 13, 2019 | |
Convertible Notes Payable (Details) [Line Items] | ||||||
Interest rate | 15.00% | |||||
Notes maturity date | Nov. 30, 2021 | |||||
Amendment agreement, description | In February 2020, the Company and the holders of the 8% Notes entered into an amendment agreement pursuant to which the principal and interest due under the 8% Notes will remain due and payable on the same terms as exist in the 8% Notes prior to modification, that the maturity shall be extended to the same maturity date as the 2020 Notes, namely February 28, 2022, and the 8% Notes became a secured obligation of the Company. | the Company, entered into Securities Purchase Agreements with several accredited investors (the “2020 Note Investors”) providing for the sale by the Company to the 2020 Note Investors of 15% Senior Secured Convertible Notes in the aggregate amount of $1,510,000 (the “2020 Notes”). Philip D. Beck, Chief Executive Officer and Chairman of the Board, invested $50,000 in consideration of a 2020 Note in the principal amount of $50,000 paid by a deduction from his salary. Theodore Stern, a former director of the Company, invested $50,000 in consideration of a 2020 Note in the principal amount of $50,000. Herbert Selzer, a former director of the Company invested $100,000 in consideration of a 2020 Note in the principal amount of $100,000. Mr. Selzer provided $50,000 on the closing date and provided the balance of the funding in April 2020.The 2020 Notes mature February 28, 2022 and are a secured obligation of the Company. At the option of the 2020 Note Investors, they may at any time convert the 2020 Notes. The number of shares delivered shall be equal to 150% of the amount of the principal converted divided by the conversion price of $6.00 per share. The Company may require that the 2020 Note Investors convert all or a portion of the 2020 Notes, if the Company’s volume weighted average price for any preceding 20-day period is equal to or greater than $9.00. In connection with this private offering, the Company paid Network 1 Financial Securities, Inc., a registered broker-dealer, a cash fee of approximately $104,800. During the first quarter of 2021, convertible notes totaling $120,000 and a portion of their accrued interest at the option of the noteholders were converted into approximately 33,000 shares of common stock of the Company. Additionally, during the nine months ended September 30, 2021, the Company received conversion notices from (i) the Stern Trust converting the principal amount, repayment premium and interest in the amount of approximately $3.5 million payable under the Restated Stern Note into approximately 561,000 shares of common stock, (ii) the 8% Note Investors converting principal and interest in the amount of approximately $0.4 million into approximately 180,000 shares of common stock and (iii) the 2020 Note Investors converting principal, repayment premium and interest in the amount of approximately $2.5 million into approximately 398,000 shares of common stock. | ||||
Aggregate amount | $ 1,510,000 | |||||
Required to pay | 150.00% | 150.00% | ||||
Conversion price per share (in Dollars per share) | $ 6 | $ 6 | ||||
Cash fee of approximately | $ 104,800 | |||||
Conversion of stock, shares converted (in Shares) | 33,000 | |||||
Interest payable | $ 3,500,000 | 3,500,000 | ||||
Investors converting principal and interest | 400,000 | 400,000 | ||||
Interest amount | $ 700,000 | 700,000 | ||||
Indebtedness amount | 6,100,000 | |||||
Aggregate shares of common stock | $ 1,138,000 | |||||
Investor [Member] | ||||||
Convertible Notes Payable (Details) [Line Items] | ||||||
Interest rate | 8.00% | |||||
Convertible notes aggregate amount | $ 428,000 | |||||
Philip D. Beck [Member] | ||||||
Convertible Notes Payable (Details) [Line Items] | ||||||
Consideration amount | 50,000 | |||||
Principal amount | 50,000 | |||||
Theodore Stern [Member] | ||||||
Convertible Notes Payable (Details) [Line Items] | ||||||
Consideration amount | 50,000 | |||||
Principal amount | 50,000 | |||||
Herbert Selzer [Member] | ||||||
Convertible Notes Payable (Details) [Line Items] | ||||||
Consideration amount | 100,000 | |||||
Principal amount | 100,000 | |||||
Mr. Selzer [Member] | ||||||
Convertible Notes Payable (Details) [Line Items] | ||||||
Principal amount | $ 50,000 | |||||
Convertible Debt [Member] | ||||||
Convertible Notes Payable (Details) [Line Items] | ||||||
Convertible notes aggregate amount | $ 120,000 | |||||
Common Stock [Member] | ||||||
Convertible Notes Payable (Details) [Line Items] | ||||||
Shares of common stock (in Shares) | 561,000 | 561,000 | ||||
Shares of common stock (in Shares) | 180,000 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details) - Schedule of convertible notes payable outstanding | Sep. 30, 2021USD ($) |
Convertible Notes Payable (Details) - Schedule of convertible notes payable outstanding [Line Items] | |
Convertible notes payable | $ 662,000 |
8% convertible notes payable issued December 2019 [Member] | |
Convertible Notes Payable (Details) - Schedule of convertible notes payable outstanding [Line Items] | |
Convertible notes payable | |
15% convertible notes payable issued February 2020 [Member] | |
Convertible Notes Payable (Details) - Schedule of convertible notes payable outstanding [Line Items] | |
Convertible notes payable | |
10% convertible notes payable issued February 2020 [Member] | |
Convertible Notes Payable (Details) - Schedule of convertible notes payable outstanding [Line Items] | |
Convertible notes payable | $ 662,000 |
Convertible Notes Payable (De_3
Convertible Notes Payable (Details) - Schedule of future maturities of convertible note payable | Sep. 30, 2021USD ($) |
Schedule of future maturities of convertible note payable [Abstract] | |
2021 | |
2022 | 662,000 |
Total convertible notes payable | $ 662,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Oct. 15, 2021 | Jun. 14, 2021 | Nov. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Related Party Transactions (Details) [Line Items] | ||||||
Remain due and payable amount (in Dollars) | $ 662,000 | $ 662,000 | ||||
Invested in consideration (in Dollars) | $ 10,282,998 | $ 10,282,998 | $ 200,000 | |||
Exercise price (in Dollars per share) | $ 8.75 | $ 8.75 | ||||
Progress Partners Inc. [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Agreement date | May 6, 2020 | |||||
Additional consulting services (in Dollars) | $ 115,000 | |||||
Stern Trust [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Invested in consideration (in Dollars) | $ 700,000 | |||||
Mr. Broenniman [Member] | Subsequent Event [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Cancellation shares | 200,000 | |||||
Mr. Kumnick [Member] | Subsequent Event [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Cancellation shares | 300,000 | |||||
Mr. Thimot [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Share issued | 1,200,000 | |||||
Exercise price (in Dollars per share) | $ 7.8 | |||||
Warrant term | 10 years | |||||
Principal amount (in Dollars) | $ 325,000 | |||||
Bearing interest rate | 50.00% | |||||
Mr. Smith [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Share issued | 600,000 | |||||
Exercise price (in Dollars per share) | $ 7.8 | |||||
Warrant term | 10 years | |||||
Principal amount (in Dollars) | $ 275,000 | |||||
Bearing interest rate | 50.00% | |||||
Receive from bonus (in Dollars) | $ 50,000 | |||||
Mr. Szoke [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Share issued | 62,500 | |||||
Invested in consideration (in Dollars) | $ 250,000 | |||||
Exercise price (in Dollars per share) | $ 7.8 | $ 7.8 | ||||
Warrant term | 10 years | |||||
Board of director [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Share issued | 93,470 | |||||
Related Party Transaction, Description of Transaction | The Company also granted Mr. Selzer and Mr. Stern 22,388 stock options to acquire common shares for service in 2021 prior to their resignation as Board Members. | |||||
Stock option vested | 13,992 | |||||
Progress Partners Inc. [Member] | Subsequent Event [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Agreed to pay for business activity (in Dollars) | $ 350,000 | |||||
Stern Trust [Member] | Theodore Stern [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Remain due and payable amount (in Dollars) | $ 3,500,000 | $ 3,500,000 | ||||
Share issued | 561,000 | |||||
Theodore Stern [Member] | Herbert Selzer [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Remain due and payable amount (in Dollars) | $ 256,000 | $ 256,000 | ||||
Share issued | 41,000 | |||||
Mr. Kumnick [Member] | Mr. Broenniman [Member] | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Share issued | 1,166,667 | |||||
Exercise price (in Dollars per share) | $ 7.2 | |||||
Warrant term | 10 years |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 26, 2021 | Mar. 22, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | |
Stockholder's Equity (Details) [Line Items] | |||||
Number of common shares issued for convertible notes, amount | $ 120,000 | ||||
Number of common shares issued for convertible notes, shares (in Shares) | 33,000 | ||||
Interest payable | $ 3,500,000 | ||||
Investors converting principal Amount | 400,000 | $ 400,000 | |||
Converting principal, repayment premium and interest | $ 2,500,000 | ||||
Aggregate shares of common stock (in Shares) | 1,138,000 | 1,138,000 | |||
Interest | $ 700,000 | ||||
Total indebt converted | $ 6,100,000 | ||||
Common stock issued for warrants exercised (in Shares) | 549,000 | ||||
Shares issued percentage | 4.50% | ||||
Warrants exercisable per share (in Dollars per share) | $ 8.75 | $ 8.75 | |||
Offering price percentage | 125.00% | ||||
Expected term | 5 years | ||||
Dividend rate | 0.00% | ||||
Stock option Compensation expense | $ 3,567,000 | ||||
Restricted stock expense | 1,228,000 | ||||
Total stock Option and restricted stock | 4,795,000 | ||||
Employee Stock Option [Member] | |||||
Stockholder's Equity (Details) [Line Items] | |||||
Unrecognized compensation costs | $ 15,443,000 | $ 15,443,000 | |||
Directors and Officers [Member] | |||||
Stockholder's Equity (Details) [Line Items] | |||||
Shares of common stock (in Shares) | 93,470 | ||||
Stock option Compensation expense | $ 2,388,000 | ||||
Public Offering [Member] | |||||
Stockholder's Equity (Details) [Line Items] | |||||
Shares of common stock (in Shares) | 1,642,856 | ||||
Share issued, per share (in Dollars per share) | $ 7 | ||||
Sale of stock (in Shares) | 214,285 | ||||
Gross proceeds | $ 11,500,000 | ||||
Stock Options [Member] | |||||
Stockholder's Equity (Details) [Line Items] | |||||
Stock options, description | ●The Company granted Mr. Thimot and Mr. Smith stock options to acquire 1,200,000 and 600,000 shares of common stock respectively upon their employment of which half of the options vest monthly over four years and the balance vest upon the achievement of certain market capitalization thresholds or performance conditions. ●The Company granted each of Mr. Kumnick and Mr. Broenniman stock options to acquire 583,333 shares of common stock that vest upon the achievement of certain market capitalization thresholds or performance conditions. In November 2021 Mr. Kumnick and Mr. Broenniman agreed to cancel 300,000 and 200,000, respectively, of these stock options in consideration of removing certain service conditions. ● The Company granted each of the four new Board of Directors as of June 2021 stock options to acquire 62,500 shares of common stock or a total of 250,000 that vest one third a year after each Annual Meeting. ● The Company granted the previously serving Board of Directors stock options to acquire 93,470 common shares that are vested as the services were rendered. The stock options were granted in lieu of other forms of Board of Director Compensation and was used to eliminate previously accrued Board of Director compensation. The Company also granted to each of Mr. Selzer and Mr. Stern 22,388 stock options to acquire common shares for service in 2021 prior to their resignation as Board Members. Upon their resignation as directors in June 2021, 6,997 stock options to each of them were vested and the balance was cancelled. ●The Company granted options to acquire 1,003,334 shares of common stock to employees. The options for 803,334 vest annually over a three-year period, 100,000 vest equally over a four-year period, and the balance of 100,000 vest upon the achievement of certain market capitalization thresholds or performance conditions. | ||||
Minimum [Member] | |||||
Stockholder's Equity (Details) [Line Items] | |||||
Expected volatility | 68.00% | ||||
Risk free rate | 0.70% | ||||
Maximum [Member] | |||||
Stockholder's Equity (Details) [Line Items] | |||||
Expected volatility | 75.00% | ||||
Risk free rate | 0.78% | ||||
2017 Incentive Stock Plan [Member] | |||||
Stockholder's Equity (Details) [Line Items] | |||||
Increase in shares of common stock (in Shares) | 2,500,000 | ||||
Common Stock [Member] | |||||
Stockholder's Equity (Details) [Line Items] | |||||
Increase in shares of common stock (in Shares) | 561,000 | ||||
Shares of common stock (in Shares) | 180,000 | ||||
Aggregate shares of common stock (in Shares) | 398,000 | ||||
Warrant [Member] | |||||
Stockholder's Equity (Details) [Line Items] | |||||
Aggregate shares of common stock (in Shares) | 64,286 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - Schedule of warrant activity | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Schedule of warrant activity [Abstract] | |
Number of Shares, Outstanding, balance at beginning | shares | 1,823,267 |
Weighted Average Exercise Price, Outstanding, balance at beginning | $ / shares | $ 4.2 |
Weighted Average Remaining Life, Outstanding, balance at beginning | 3 years 4 months 24 days |
Number of Shares, Granted | shares | 64,286 |
Weighted Average Exercise Price, Granted | $ / shares | $ 8.75 |
Weighted Average Remaining Life, Granted | 4 years 3 months 18 days |
Number of Shares, Exercised/cancelled | shares | (473,942) |
Weighted Average Exercise Price, Exercised/cancelled | $ / shares | $ 3.2 |
Weighted Average Remaining Life, Exercised/cancelled | 4 years 2 months 12 days |
Number of Shares, Outstanding, balance at ending | shares | 1,413,611 |
Weighted Average Exercise Price, Outstanding, balance at ending | $ / shares | $ 4.61 |
Weighted Average Remaining Life, Outstanding, balance at ending | 3 years 2 months 12 days |
Stockholder's Equity (Details_2
Stockholder's Equity (Details) - Schedule of outstanding stock options - USD ($) | 9 Months Ended |
Sep. 30, 2021 | |
Schedule of outstanding stock options [Abstract] | |
Number of Shares, Outstanding at beginning | 5,645,802 |
Weighted Average Exercise Price, Outstanding at beginning | $ 4.5 |
Weighted Average Contractual Term (Yrs.), Outstanding at beginning | 7 years 6 months |
Aggregate Intrinsic Value, Outstanding at beginning | $ 8,823,639 |
Number of Shares, Granted | 4,358,246 |
Weighted Average Exercise Price, Granted | $ 7.95 |
Weighted Average Contractual Term (Yrs.), Granted | 10 years |
Aggregate Intrinsic Value, Granted | |
Number of Shares, Exercised | (504,804) |
Weighted Average Exercise Price, Exercised | $ 1.54 |
Weighted Average Contractual Term (Yrs.), Exercised | 5 years |
Aggregate Intrinsic Value, Exercised | $ 3,485,482 |
Number of Shares, Foreited/cancelled | (177,091) |
Weighted Average Exercise Price, Foreited/cancelled | $ 4.3 |
Weighted Average Contractual Term (Yrs.), Foreited/cancelled | 8 years 9 months 18 days |
Aggregate Intrinsic Value, Foreited/cancelled | |
Number of Shares, Outstanding at ending | 9,322,153 |
Weighted Average Exercise Price, Outstanding at ending | $ 6.28 |
Weighted Average Contractual Term (Yrs.), Outstanding at ending | 7 years 1 month 6 days |
Aggregate Intrinsic Value, Outstanding at ending | $ 48,380,894 |
Number of Shares, Exercisable at ending | 4,708,113 |
Weighted Average Exercise Price, Exercisable at ending | $ 5.15 |
Weighted Average Contractual Term (Yrs.), Exercisable at ending | 4 years 6 months |
Aggregate Intrinsic Value, Exercisable at ending | $ 30,866,033 |
Stockholder's Equity (Details_3
Stockholder's Equity (Details) - Schedule of stock option | 9 Months Ended |
Sep. 30, 2021shares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 9,322,153 |
Weighted Average Contractual Life (Yrs.) | 7 years 1 month 6 days |
Exercisable | 4,708,113 |
Exercise Price $.03 - $4.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 3,664,901 |
Weighted Average Contractual Life (Yrs.) | 4 years 10 months 24 days |
Exercisable | 3,208,347 |
Exercise Price $4.01 - $7.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 162,784 |
Weighted Average Contractual Life (Yrs.) | 4 years 8 months 12 days |
Exercisable | 162,784 |
Exercise Price $7.01 - $10.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 4,007,801 |
Weighted Average Contractual Life (Yrs.) | 9 years 7 months 6 days |
Exercisable | 270,315 |
Exercise Price $10.01 - $13.50 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding | 1,486,667 |
Weighted Average Contractual Life (Yrs.) | 4 years 3 months 18 days |
Exercisable | 1,066,667 |
Direct Financing Lease (Details
Direct Financing Lease (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / shares | |
Direct Financing Lease (Details) [Line Items] | |
Incremental revenue | $ 38,000 |
Estimated under direct lease | 748,000 |
Aggregate minimum future lease payments | 1,422,000 |
Unearned income | $ 474,000 |
Cash Collection Services (the "Contract") [Member] | |
Direct Financing Lease (Details) [Line Items] | |
Lease contract term | 10 years |
Lease monthly rental | $ 11,900 |
Purchase price at the end of lease term (in Dollars per share) | $ / shares | $ 40 |
Receive monthly payments | $ 11,856 |
Lease rent expense | 142,272 |
Estimated executory costs | $ 1,677 |
Direct Financing Lease (Detai_2
Direct Financing Lease (Details) - Schedule of future minimum lease payments to be received | Sep. 30, 2021USD ($) |
Schedule of future minimum lease payments to be received [Abstract] | |
Remainder of 2021 | $ 30,537 |
2022 | 122,148 |
2023 | 122,148 |
2024 | 122,148 |
2025 | 122,148 |
Thereafter | 40,716 |
Sub-total | 559,845 |
Less deferred revenue | (118,929) |
Net investment in lease | $ 440,916 |
Lease Obligation Payable (Detai
Lease Obligation Payable (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Leases [Abstract] | |
Lease equipment | $ 163,407 |
Accumulated amortization | $ 147,334 |
Maturity date | Mar. 31, 2022 |
Lease obligation interest rate | 12.00% |
Lease Obligation Payable (Det_2
Lease Obligation Payable (Details) - Schedule of lease obligation payable | Sep. 30, 2021USD ($) |
Schedule of lease obligation payable [Abstract] | |
Remainder of 2021 | $ 10,774 |
2022 | 10,774 |
Total minimum lease payments | 21,548 |
Less: Amount representing interest | (735) |
Present value of minimum lease payments | $ 20,813 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2021 | Apr. 30, 2021 | Sep. 30, 2021 | |
Commitments and Contingencies (Details) [Line Items] | |||
Short term lease expense | $ 141,000 | ||
Weighted average lease term | 1 year | ||
Weighted average discount rate | 13.55% | ||
Lease expired, description | The lease expired in April 2021. | ||
New Office Facilities [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Monthly rental payments | $ 2,900 | $ 1,375 | |
Long Beach, New York [Member] | New Office Facilities [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Monthly rental payments | $ 2,500 | ||
Agreement term | 30 days | ||
COLOMBIA [Member] | MultiPay S.A.S [Member] | New Office Facilities [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Monthly rental payments | $ 8,500 | ||
South Africa [Member] | New Office Facilities [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Monthly rental payments | $ 8,000 | ||
Lease term | Jun. 30, 2022 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of related lease balance | Sep. 30, 2021USD ($) |
Schedule of related lease balance [Abstract] | |
Current portion of operating lease ROU assets - included in other current assets | $ 99,667 |
Operating lease ROU assets – included in Other Assets | |
Total operating lease assets | 99,667 |
Current portion of ROU liabilities – included in Accounts payable and accrued expenses | 100,290 |
Long-term portion of ROU liabilities – included in Other liabilities | |
Total operating lease liabilities | $ 100,290 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of maturity of the company's operating lease liabilities | Sep. 30, 2021USD ($) |
Schedule of maturity of the company's operating lease liabilities [Abstract] | |
Remainder of 2021 | $ 34,692 |
2022 | 66,564 |
Total operating lease payments | 101,256 |
Imputed interest | (966) |
Total operating lease liabilities | $ 100,290 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Segment Information (Details) [Line Items] | |
Number of reportable segments | 2 |
North America [Member] | |
Segment Information (Details) [Line Items] | |
Gross long lived assets | $ 7.7 |
South America [Member] | |
Segment Information (Details) [Line Items] | |
Gross long lived assets | 0.1 |
Africa [Member] | |
Segment Information (Details) [Line Items] | |
Gross long lived assets | $ 0.2 |
Segment Information (Details) -
Segment Information (Details) - Schedule of geographic region and reconciliation consolidated revenue, gross profit, and net loss - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Revenues: | ||||
Revenues, net | $ 528,349 | $ 515,692 | $ 1,695,129 | $ 1,630,600 |
Loss From Operations | ||||
Loss From Operations | (5,662,649) | (1,711,286) | (11,140,146) | (7,190,515) |
Interest Expense | (25,780) | (212,658) | (579,768) | (701,861) |
Other income/(expense) | 492,498 | 16,779 | 985,916 | (1,301,192) |
Loss before income taxes | (3,015,256) | (1,907,165) | (10,733,998) | (9,193,568) |
Income tax expense | (2,974) | (11,074) | (12,516) | (23,540) |
Net loss | (5,198,905) | (1,918,239) | (10,746,514) | (9,217,108) |
Identity Management [Member] | ||||
Net Revenues: | ||||
Revenues, net | 438,768 | 409,239 | 1,419,950 | 1,338,392 |
Loss From Operations | ||||
Loss From Operations | (4,010,982) | (774,005) | (7,699,375) | (2,338,421) |
Payment Processing [Member] | ||||
Net Revenues: | ||||
Revenues, net | 89,581 | 106,453 | 275,179 | 292,208 |
Loss From Operations | ||||
Loss From Operations | (1,655,667) | (937,281) | (3,440,771) | (4,852,094) |
North America [Member] | ||||
Net Revenues: | ||||
Revenues, net | 162,433 | 176,448 | 464,181 | 445,700 |
Loss From Operations | ||||
Loss From Operations | (3,614,358) | (562,729) | (6,902,429) | (1,536,138) |
South America [Member] | ||||
Net Revenues: | ||||
Revenues, net | 89,581 | 106,453 | 275,179 | 292,208 |
Loss From Operations | ||||
Loss From Operations | (1,655,667) | (937,281) | (3,440,771) | (4,852,094) |
Africa [Member] | ||||
Net Revenues: | ||||
Revenues, net | 276,335 | 232,791 | 955,769 | 892,692 |
Loss From Operations | ||||
Loss From Operations | $ (392,624) | $ (211,276) | $ (796,946) | $ (802,283) |