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Discontinued Operations and Assets Held for Sale | 3 Months Ended
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Mar. 31, 2023
Discontinued Operations and Assets Held for Sale [Abstract] |
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | NOTE 9 – 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 June 30, 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 asset 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. 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 March 31, 2023, all impacted employees had left the Company. MultiPay is leasing out its software to its one major customer and working to finalize the sale of the Company’s proprietary software to this same customer. The transaction is expected to complete by June 30, 2023. The operations of Cards Plus and MultiPay for the three months ended March 31, 2023 and 2022 on a consolidated basis are below (unaudited):
|  | Three Months Ended March 31, |
Discontinued Operations |  | 2023 |  |  | 2022 |
Discontinued Operations Total Revenues, net |  | $ | 14,095 |  |  | $ | 442,310 |
Operating Expenses: |  |  |  |  |  |  |  |
Cost of sales |  |  | - |  |  |  | 183,524 |
General and administrative |  |  | 12,268 |  |  |  | 285,383 |
Impairment loss |  |  | - |  |  |  | 143,703 |
Depreciation and amortization |  |  | 3,909 |  |  |  | 28,202 |
Total operating expenses |  |  | 16,177 |  |  |  | 640,812 |
Loss from operations |  |  | (2,082 | ) |  |  | (198,502 | )
Other Income (Expense): |  |  |  |  |  |  |  |
Other income |  |  | 224 |  |  |  | 3,695 |
Interest expense, net |  |  | - |  |  |  | (364 | )
Other income, net |  |  | 224 |  |  |  | 3,331 |
Loss before income taxes |  |  | (1,858 | ) |  |  | (195,171 | )
Income tax expense |  |  | (397 | ) |  |  | (1,349 | )
Loss from discontinued operations |  | $ | (2,255 | ) |  | $ | (196,520 | )
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
Cards Plus |  |  |  |  |  |
Total Revenues, net |  | $ | - |  |  | $ | 373,158 |
Operating Expenses: |  |  |  |  |  |  |  |
Cost of sales |  |  | - |  |  |  | 183,524 |
General and administrative |  |  | - |  |  |  | 155,310 |
Impairment loss |  |  | - |  |  |  | 143,703 |
Depreciation and amortization |  |  | - |  |  |  | 21,230 |
Total operating expenses |  |  | - |  |  |  | 503,767 |
Loss from operations |  |  | - |  |  |  | (130,609 | )
Other Income (Expense): |  |  |  |  |  |  |  |
Other income (expense), net |  |  | - |  |  |  | 3,348 |
Interest expense, net |  |  | - |  |  |  | (364 | )
Other income, net |  |  | - |  |  |  | 2,984 |
Loss before income taxes |  |  | - |  |  |  | (127,625 | )
Income tax expense |  |  | - |  |  |  | 4,681 |
Loss from discontinued operations |  | $ | - |  |  | $ | (122,944 | )
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
MultiPay |  |  |  |  |  |
Total Revenues, net |  | $ | 14,095 |  |  | $ | 69,152 |
Operating Expenses: |  |  |  |  |  |  |  |
General and administrative |  |  | 12,268 |  |  |  | 130,073 |
Depreciation and amortization |  |  | 3,909 |  |  |  | 6,972 |
Total operating expenses |  |  | 16,177 |  |  |  | 137,045 |
Loss from operations |  |  | (2,082 | ) |  |  | (67,893 | )
Other Income: |  |  |  |  |  |  |  |
Other income |  |  | 224 |  |  |  | 347 |
Other income |  |  | 224 |  |  |  | 347 |
Loss before income taxes |  |  | (1,858 | ) |  |  | (67,546 | )
Income tax expense |  |  | (397 | ) |  |  | (6,030 | )
Loss from discontinued operations |  | $ | (2,255 | ) |  | $ | (73,576 | )
As a result of meeting the discontinued operations/assets held for sale criteria for the MultiPay operations, the assets and liabilities have been reclassified as assets held for sale as of the respective balance sheet date as follows:
|  | March 31, 2023 (unaudited) |  |  | December 31, 2022 |
Discontinued Operations Current Assets: |  |  |  |  |  |
Cash |  | $ | 3,025 |  |  | $ | 2,703 |
Accounts receivable, net |  |  | 61,646 |  |  |  | 105,194 |
Other current assets |  |  | - |  |  |  | 10,562 |
Current assets held for sale |  |  | 64,671 |  |  |  | 118,459 |
Noncurrent Assets: |  |  |  |  |  |  |  |
Property and equipment, net |  |  | 23,685 |  |  |  | 27,595 |
Noncurrent assets held for sale |  |  | 23,685 |  |  |  | 27,595 |
Total assets held for sale |  | $ | 88,356 |  |  | $ | 146,054 |
Current Liabilities: |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 17,795 |  |  | $ | 13,759 |
Total liabilities held for sale |  | $ | 17,795 |  |  | $ | 13,759 |
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 (unaudited):
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |
Net income loss |  | $ | (2,255 | ) |  | $ | (196,520 | )
Adjustments to reconcile net income loss with cash flows from operations: |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 3,909 |  |  |  | 28,202 |
Impairment of intangible assets |  |  | - |  |  |  | 143,703 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Accounts receivable |  |  | 41,987 |  |  |  | (27,464 | )
Net investment in direct financing lease Leases |  |  | - |  |  |  | 28,271 |
Other current assets |  |  | 10,562 |  |  |  | (351 | )
Inventory |  |  | - |  |  |  | (227,669 | )
Accounts payable and accrued expenses |  |  | 4,036 |  |  |  | 285,949 |
Deferred revenue |  |  | - |  |  |  | (4,872 | )
Adjustments relating to discontinued operations |  |  | 60,494 |  |  |  | 225,769 |
Net cash flows from discontinued operations |  | $ | 58,239 |  |  | $ | 29,249 |
Notes to Financial Statements – Discontinued Operations 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. 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.

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- 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 -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent + Details
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