XML 32 R19.htm IDEA: XBRL DOCUMENT
v3.23.1

Discontinued Operations and Assets Held for Sale | 12 Months Ended
--- | ---
Dec. 31, 2022
Discontinued Operations and Assets Held for Sale [Abstract] |
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | NOTE 11 – DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE The Board of Directors of authID considers it in the best interests of the Company to focus its business activities on providing biometric authentication products and services by means of our proprietary Verified platform. Accordingly, on May 4, 2022, the Board approved a plan to exit from certain non-core activities comprising the MultiPay correspondent bank, payments services in Colombia and the Cards Plus cards manufacturing and printing business in South Africa. Cards Plus business in South Africa The financial statements of Cards Plus are classified as a discontinued operation and an asset held for sale, as all required classification criteria under appropriate accounting standards were met as of December 31, 2022. On August 29, 2022, the Company completed the sale of Cards Plus for a price of $300,000 of which $150,000 was received and the remaining balance of $150,000 recorded in other current assets is expected to be received within one year, less $3,272 in costs to sell, and recognized a loss of $188,247 from the transaction. The following table summarizes the assets and liabilities of the Cards Plus sale and the consideration received:
Carrying value of net assets sold: |  | Amount |
Cash |  | $ | 299,505 |
Accounts receivable |  |  | 61,879 |
Inventory |  |  | 231,955 |
Other current assets |  |  | 1,490 |
Total current assets |  |  | 594,829 |
Property and equipment |  |  | 21,127 |
Total assets |  |  | 615,956 |
Accounts payable |  |  | 76,094 |
Accrued expenses |  |  | 43,728 |
Deferred revenue |  |  | 11,159 |
Total current liabilities |  |  | 130,981 |
Net assets sold |  | $ | 484,975 |
Sale Consideration on disposition of net assets: |  |  |  |
Proceeds |  | $ | 300,000 |
Legal fee |  |  | (5,511 | )
Write off net payable with CP |  |  | 2,239 |
Net Consideration |  |  | 296,728 |
Net loss on sale of a discontinued operation |  | $ | (188,247 | )
MultiPay business in Colombia The Company is exiting the MultiPay business in Colombia in an orderly fashion, honoring our obligations to employees, customers and under applicable laws and regulations. We maintain our customer support and operations team in Bogota, which performs essential functions to support the global operations of our Verified product. As of December 31, 2022, all impacted employees left the Company. The Company also paid to each employee their severance packages under the MultiPay’s retention plan and obligations under the appropriate statutes. As of December 31, 2022, MultiPay is working with a major customer to implement a transition plan to provide an essential service for certain bill pay services which will likely result in the sale of the Company’s proprietary software as well as the assumption of certain expenses. The Company incurred costs of $196,500 which was paid as of December 31, 2022 associated with the exit of the MultiPay business and approximately $41,000 for accelerated amortization (non-cash) for certain technology licenses. MultiPay has accelerated the depreciation of certain assets with the effective date of the announcement to reflect the estimated remaining useful life. The operations of Cards Plus and MultiPay for the years ended December 31, 2022 and 2021 on a consolidated basis are below:
|  | For the Year Ended December 31, |
Discontinued Operations |  | 2022 |  |  | 2021 |
Discontinued Operations Total Revenues, net |  | $ | 1,503,333 |  |  | $ | 1,678,780 |
Operating Expenses: |  |  |  |  |  |  |  |
Cost of sales |  |  | 665,269 |  |  |  | 653,773 |
General and administrative |  |  | 1,021,649 |  |  |  | 1,892,783 |
Impairment loss |  |  | 143,698 |  |  |  | - |
Depreciation and amortization |  |  | 41,850 |  |  |  | 102,513 |
Total operating expenses |  |  | 1,872,466 |  |  |  | 2,649,069 |
Loss from operations |  |  | (369,133 | ) |  |  | (970,289 | )
Other Income (Expense): |  |  |  |  |  |  |  |
Other income |  |  | 10,161 |  |  |  | 27,188 |
Interest expense, net |  |  | (364 | ) |  |  | (5,164 | )
Other income, net |  |  | 9,797 |  |  |  | 22,024 |
Loss before income taxes |  |  | (359,336 | ) |  |  | (948,265 | )
Income tax expense |  |  | (7,327 | ) |  |  | (6,030 | )
Loss from discontinued operations |  |  | (366,663 | ) |  |  | (954,295 | )
Loss from sale of discontinued operations |  |  | (188,247 | ) |  |  | - |
Total loss from discontinued operations |  | $ | (554,910 | ) |  | $ | (954,295 | )
|  | For the Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Cards Plus |  |  |  |  |  |
Total Revenues, net |  | $ | 1,263,672 |  |  | $ | 1,318,029 |
Operating Expenses: |  |  |  |  |  |  |  |
Cost of sales |  |  | 665,269 |  |  |  | 653,773 |
General and administrative |  |  | 412,243 |  |  |  | 606,110 |
Impairment loss |  |  | 143,698 |  |  |  | - |
Depreciation and amortization |  |  | 24,451 |  |  |  | 80,692 |
Total operating expenses |  |  | 1,245,661 |  |  |  | 1,340,575 |
Income (Loss) from operations |  |  | 18,011 |  |  |  | (22,546 | )
Other Income (Expense): |  |  |  |  |  |  |  |
Other income (expense), net |  |  | 8,919 |  |  |  | 6,867 |
Interest expense, net |  |  | (364 | ) |  |  | (5,164 | )
Other income, net |  |  | 8,555 |  |  |  | 1,703 |
Income (Loss) before income taxes |  |  | 26,566 |  |  |  | (20,843 | )
Income tax expense |  |  | (4,681 | ) |  |  | - |
Income (Loss) from discontinued operations |  |  | 21,885 |  |  |  | (20,843 | )
Loss from sale of discontinued operations |  |  | (188,247 | ) |  |  | - |
Total income (loss) from discontinued operations |  | $ | (166,362 | ) |  | $ | (20,843 | )
|  | For the Year Ended December 31, |
|  | 2022 |  |  | 2021 |
MultiPay |  |  |  |  |  |
Total Revenues, net |  | $ | 239,661 |  |  | $ | 360,751 |
Operating Expenses: |  |  |  |  |  |  |  |
General and administrative |  |  | 609,406 |  |  |  | 1,286,673 |
Depreciation and amortization |  |  | 17,399 |  |  |  | 21,821 |
Total operating expenses |  |  | 626,805 |  |  |  | 1,308,494 |
Loss from operations |  |  | (387,144 | ) |  |  | (947,743 | )
Other Income: |  |  |  |  |  |  |  |
Other income, net |  |  | 1,242 |  |  |  | 20,321 |
Other income |  |  | 1,242 |  |  |  | 20,321 |
Loss before income taxes |  |  | (385,902 | ) |  |  | (927,422 | )
Income tax expense |  |  | (2,646 | ) |  |  | (6,030 | )
Loss from discontinued operations |  | $ | (388,548 | ) |  | $ | (933,452 | )
As a result of meeting the discontinued operations/assets held for sale criteria for Cards Plus and the MultiPay operations, the assets and liabilities have been reclassified as assets held for sale as of the respective balance sheet date as follows:
|  | December 31, 2022 |  |  | December 31 2021 |
Discontinued Operations Current Assets: |  |  |  |  |  |
Cash |  | $ | 2,703 |  |  | $ | 270,707 |
Accounts receivable, net |  |  | 105,194 |  |  |  | 110,977 |
Inventory |  |  | - |  |  |  | 153,149 |
Other current assets |  |  | 10,562 |  |  |  | 94,919 |
Current assets held for sale |  |  | 118,459 |  |  |  | 629,752 |
Noncurrent Assets: |  |  |  |  |  |  |  |
Property and equipment, net |  |  | 27,595 |  |  |  | 93,132 |
Intangible assets |  |  | - |  |  |  | 153,004 |
Other assets |  |  | - |  |  |  | 66,695 |
Noncurrent assets held for sale |  |  | 27,595 |  |  |  | 312,831 |
Total assets held for sale |  | $ | 146,054 |  |  | $ | 942,583 |
Current Liabilities: |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 13,759 |  |  | $ | 235,348 |
Deferred revenue |  |  | - |  |  |  | 47,823 |
Notes payable obligation, current portion |  |  | - |  |  |  | 1,579 |
Capital lease obligation, current portion |  |  | - |  |  |  | 10,562 |
Total liabilities held for sale |  | $ | 13,759 |  |  | $ | 295,312 |
|  | December 31, 2022 |  |  | December 31 2021 |
Cards Plus Current Assets: |  |  |  |  |  |
Cash |  | $ | - |  |  | $ | 182,518 |
Accounts receivable, net |  |  | - |  |  |  | 88,235 |
Inventory |  |  | - |  |  |  | 153,149 |
Other current assets |  |  | - |  |  |  | 52,678 |
Current assets held for sale |  |  | - |  |  |  | 476,580 |
Noncurrent Assets: |  |  |  |  |  |  |  |
Property and equipment, net |  |  | - |  |  |  | 24,619 |
Intangible assets |  |  | - |  |  |  | 153,004 |
Noncurrent assets held for sale |  |  | - |  |  |  | 177,623 |
Total assets held for sale |  | $ | - |  |  | $ | 654,203 |
Current Liabilities: |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | - |  |  | $ | 122,725 |
Deferred revenue |  |  | - |  |  |  | 47,823 |
Notes payable obligation, current portion |  |  | - |  |  |  | 1,579 |
Capital lease obligation, current portion |  |  | - |  |  |  | 1,056 |
Total liabilities held for sale |  | $ | - |  |  | $ | 173,183 |
|  | December 31, 2022 |  |  | December 31 2021 |
MultiPay Current Assets: |  |  |  |  |  |
Cash |  | $ | 2,703 |  |  | $ | 88,189 |
Accounts receivable, net |  |  | 105,194 |  |  |  | 22,742 |
Other current assets |  |  | 10,562 |  |  |  | 42,241 |
Current assets held for sale |  |  | 118,459 |  |  |  | 153,172 |
Noncurrent Assets: |  |  |  |  |  |  |  |
Property and equipment, net |  |  | 27,595 |  |  |  | 68,513 |
Other assets |  |  | - |  |  |  | 66,695 |
Noncurrent assets held for sale |  |  | 27,595 |  |  |  | 135,208 |
Total assets held for sale |  | $ | 146,054 |  |  | $ | 288,380 |
Current Liabilities: |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 13,759 |  |  | $ | 112,623 |
Total liabilities held for sale |  | $ | 13,759 |  |  | $ | 112,623 |
As a result of meeting the discontinued operations/assets held for sale criteria for Cards Plus and the MultiPay operations, the cash flow activity related to discontinued operations is presented separately on the statement of cash flows as summarized below:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |
Net loss |  | $ | (366,663 | ) |  | $ | (954,295 | )
Adjustments to reconcile net loss with cash flows from operations: |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 41,850 |  |  |  | 102,513 |
Impairment of intangible assets |  |  | 143,698 |  |  |  | - |
Provision of Net Investment in direct financing lease |  |  | - |  |  |  | 422,022 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Accounts receivable |  |  | (50,598 | ) |  |  | 18,722 |
Net investment in direct financing lease |  |  | - |  |  |  | 96,487 |
Other current assets |  |  | 170,536 |  |  |  | 88,345 |
Inventory |  |  | (78,806 | ) |  |  | 96,930 |
Accounts payable and accrued expenses |  |  | (102,486 | ) |  |  | (115,870 | )
Deferred revenue |  |  | (36,664 | ) |  |  | (82,594 | )
Adjustments relating to discontinued operations |  |  | 87,530 |  |  |  | 626,555 |
Net cash flows from discontinued operations |  | $ | (279,133 | ) |  | $ | (327,740 | )
Notes to Financial Statements – Discontinued Operations Inventories Inventory of plastic/ID cards, digital printing material, which were held by Cards Plus Pty Ltd., were at the lower of cost (using the average method) or market. As of December 31, 2021, the Company recorded an inventory valuation allowance of approximately $20,000 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. As of December 31, 2022, inventories decreased to zero as the Company completed the sale of Cards Plus business on August 29, 2022. Revenue Recognition Cards Plus – The Company recognized 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 December 31, 2021, Cards Plus had approximately $48,000 of contract liability from payments received in advance that will be earned in future periods. Contract liability decreased to zero as the Company completed the sale of Cards Plus business on August 29, 2022. MultiPay 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, MultiPay also sells certain equipment from time to time for which revenue is recognized upon delivery to the customer. 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. Impairment loss During the year ended December 31, 2022, Cards Plus recorded an impairment loss of zero and approximately $143,000, respectively associated with its intangible assets. Leases In October 2021, MultiPay entered into a one-year lease for approximately $2,900 per month in Bogota, Colombia. MultiPay terminated the lease as of September 30, 2022. Cards Plus leased space for its operations in South Africa. The facility was rented on a month-to-month basis with monthly rent of approximately $8,000 through August 29, 2022 as the Company completed the sale of Cards Plus business. Cards Plus 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 was amortized on a straight-line basis over its lease term including the last payment (61 payments) and ownership transferred to the Company. The lease was fully paid off.

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration