UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

 

FORM 10-K/A

(Amendment No. 1)

 

(Mark one) 

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal period ended December 31, 2023

 

or

 

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ________ to ________

 

Commission File Number – 000-55648

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada   33 - 1230229
(State or Other Jurisdiction of
Incorporation or Organization)		   (I.R.S. Employer
Identification No.)

 

56B 5th Street, Lot 1, #AT

Carmel by the Sea, CA 93921

(Address of principal executive offices) (Zip Code)

  

(866) 477-4729

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12 (g) of the Act: Common Stock, $0.0001 par value.

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐  No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐  No ☒

 

Indicate by check mark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes  No ☐

 

Indicate by check mark whether the registrant has submitted electronically every interactive data file required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer, “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

  Large accelerated filer ☐ Accelerated filer ☐  
  Non-accelerated filer ☒ Smaller reporting company ☒  
    Emerging growth company ☐  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

  

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

 

As of June 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $4,628,228 (based upon the closing sale price of the registrant’s common stock reported on June 30, 2023 of $0.42 per share). This calculation excludes shares held by the registrant’s current directors and executive officers and stockholders that the registrant has concluded are affiliates of the registrant.

 

As of April 16, 2024, the issuer had 13,819,889 shares of common stock outstanding.

 

Documents incorporated by reference: None

 

 

 

 

 

EXPLANATORY NOTE

 

This Amendment No. 1 on Form 10-K/A (“Amendment No. 1”) to the Annual Report on Form 10-K of Innovative Payment Solutions, Inc. (the “Company”) for the fiscal year ended December 31, 2023, originally filed with the Securities and Exchange Commission (“SEC”) on March 29, 2024 (the “Original Filing”), is being filed solely to correct a typographical error as to the signing date of the Report of Independent Registered Public Accounting Firm contained therein, which read March 29, 2023 instead of March 29, 2024.

 

This Amendment No. 1 includes: Item 8 of Part II, “Financial Statements and Supplementary Data” in its entirety and without change from the Original Filing other than the correction of the signing date of the Report of Independent Registered Public Accounting Firm.

 

In addition, pursuant to the rules of the SEC, the exhibit list included herein reflects currently-dated certifications from the Company’s principal executive officer and principal accounting officer, which are filed as exhibits to this Amendment No. 1.

 

Except for the foregoing amended information, this Amendment No. 1 does not amend or update any other information contained in the Original Filing, or reflect any events that have occurred after the filing date of the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing.

 

 

 

PART II

 

Item 8. Financial Statements and Supplementary Data

 

    Page
Report of the Independent, Registered Public Accounting firm   F-2
Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022   F-3
Consolidated Statements of Operations for the years ended December 31, 2023 and December 31, 2022   F-4
Consolidated Statements of Deficit for the years ended December 31, 2023 and December 31, 2022   F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and December 31, 2022   F-6
Notes to the Consolidated Financial Statements   F-7

 

F-1

 

 

805 Third Avenue
New York, NY 10022
Tel. 212.838.5100
Fax 212.838.2676
www.rbsmllp.com

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

Innovative Payment Solutions, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Innovative Payment Solutions, Inc. (the Company) as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for each of the two years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

 

The Company’s Ability to Continue as a Going Concern

 

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the accompanying consolidated financial statements, the Company has suffered recurring losses from operations, generated negative cash flows from operating activities, has an accumulated deficit and has stated that substantial doubt exists about Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans in regarding these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matters

 

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. Based on the previous year’s audits and the reviews performed by RBSM during year ended December 31, 2023, RBSM determined there were no CAM’s for the audit of the year ended December 31, 2023.

 

 

 

We have served as the Company’s auditor since 2014. PCAOB ID 587
New York, NY
March 29, 2024

  

F-2

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS

 

   December 31,   December 31, 
   2023   2022 
Assets        
         
Current Assets        
Cash  $50,433   $373,822 
Other current assets   38,818    97,042 
Assets held for sale   
-
    807,263 
Total Current Assets   89,251    1,278,127 
           
Non-current assets          
Plant and equipment   7,027    40,362 
Intangible assets   
-
    1,401,491 
Security deposit   5,000    32,592 
Equity method investment   703,938    
-
 
Total Non-Current Assets   715,965    1,474,445 
Total Assets  $805,216   $2,752,572 
           
Liabilities and Equity (Deficit)          
           
Current Liabilities          
Accounts payable  $2,023,375   $727,922 
Liabilities held for sale   
-
    33,810 
Federal relief loans – current portion   9,369    
-
 
Notes payable   1,062,007    964,268 
Convertible debt, net of unamortized discount of $687,503 and $263,200, respectively   3,704,280    2,266,602 
Derivative liability   1,434,196    2,550,642 
Total Current Liabilities   8,233,227    6,543,244 
           
Non-Current Liabilities          
Federal relief loans   150,000    163,978 
Total Non-Current Liabilities   150,000    163,978 
           
Total Liabilities   8,383,227    6,707,222 
           
Equity (Deficit)          
Preferred stock, $0.0001 par value, 25,000,000 shares authorized, and 0 shares issued and outstanding as of December 31, 2023 and December 31, 2022.   
-
    
-
 
Common stock, $0.0001 par value; 750,000,000 shares authorized, 13,819,889 and 12,563,426 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively.*   1,382    1,256 
Additional paid-in-capital*   50,656,225    48,442,355 
Accumulated deficit   (58,235,618)   (52,399,858)
Total equity (deficit) attributable to Innovative Payment Solutions, Inc. Stockholders   (7,578,011)   (3,956,247)
Non-controlling interest   
-
    1,597 
Total Equity (Deficit)   (7,578,011)   (3,954,650)
Total Liabilities and Equity (Deficit)  $805,216   $2,752,572 

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The accompanying notes are an integral part of these audited consolidated financial statements.

 

F-3

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

   Twelve
months ended		   Twelve
months ended		 
   December   December 
   2023   2022 
Net Revenue  $410   $847 
           
Cost of Goods Sold   3,547    5,052 
           
Gross loss   (3,137)   (4,205)
           
General and administrative   3,576,352    5,452,579 
Depreciation   380,634    132,394 
Total Expense   3,956,986    5,584,973 
           
Loss from Operations   (3,960,123)   (5,589,178)
           
Investment impairment charge   
-
    (1)
Loss on debt conversion   (90,761)   
-
 
Loss on convertible notes   (73,562)   (4,602,709)
Loss on novation   (1,066,165)   
-
 
Fair value of warrants issued   (14,176)   
-
 
Interest expense, net   (424,117)   (199,788)
Amortization of debt discount   (770,372)   (263,200)
Derivative liability movements   1,501,446    411,752 
Loss before income taxes   (4,897,830)   (10,243,124)
           
Income taxes   
-
    
-
 
           
Net loss after income taxes   (4,897,830)   (10,243,124)
           
Net loss from equity method investments   (403,282)   
-
 
           
Net loss from continuing operations   (5,301,112)   (10,243,124)
           
Discontinued operations          
Operating loss from discontinued operations   (40,821)   (88,300)
Loss on disposal of subsidiary and investment   (495,424)   
-
 
Net loss from discontinued operations   (536,245)   (88,300)
           
Net loss   (5,837,357)   (10,331,424)
           
Net loss attributable to non-controlling interest   1,597    43,267 
           
Net loss attributable Innovative Payment Solutions, Inc. Stockholders’  $(5,835,760)  $(10,288,157)
           
Basic and diluted loss per share*          
Continuing operations*
  $(0.41)  $(0.83)
Discontinued operations*
   (0.04)   (0.00)
 
  $(0.45)  $(0.83)
           
Weighted Average Number of Shares Outstanding - Basic and diluted
   12,844,609    12,406,677 

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The accompanying notes are an integral part of these audited consolidated financial statements.

 

F-4

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE PERIOD JANUARY 1, 2022 TO DECEMBER 31, 2023

 

   Preferred
Stock
Shares		   Amount   Common
Stock
Shares*		   Amount*   Additional
Paid-in
Capital*		   Accumulated
Deficit		   Non-controlling
shareholders
interest		   Total
Stockholders’
Equity
(Deficit)		 
Balance at December 31, 2021   
-
   $
-
    12,263,426   $1,226   $45,806,576   $(42,111,701)  $35,211   $3,731,312 
Fair value of warrants issued   -    
-
    -    
-
    708,063    
-
    
-
    708,063 
Shares issued for services   -    
-
    233,333    23    332,977    
-
    
-
    333,000 
Stock based option expense   -    
-
    -    
-
    1,233,682    
-
    
-
    1,233,682 
Restricted stock awards   -    
-
    66,667    7    361,057    
-
    
-
    361,064 
Proceeds from non-controlling shareholders   -    
-
    -    
-
    
-
    
-
    9,653    9,653 
Net loss   -    
-
    -    
-
    
-
    (10,288,157)   (43,267)   (10,331,424)
Balance at December 31, 2022   
-
   $
-
    12,563,426   $1,256   $48,442,355   $(52,399,858)  $1,597   $(3,954,650)
Conversion of convertible debt   -    
-
    1,253,625    126    523,135    
-
    
-
    523,261 
Additional shares issued on reverse stock split   -    
-
    2,838    
-
    
-
    
-
    
-
    - 
Fair value of warrants issued for services   -    
-
    -    
-
    159,004    
-
    
-
    159,004 
Fair value of warrants issued to convertible debt holders   -    
-
    -    
-
    1,045,655    
-
    
-
    1,045,655 
Stock based compensation   -    
-
    -    
-
    377,856    
-
    
-
    377,856 
Fair value of warrants issued for equity method investments   -    
-
    -    
-
    108,220    
-
    
-
    108,220 
Net loss   -    
-
    -    
-
    
-
    (5,835,760)   (1,597)   (5,837,357)
Balance at December 31, 2023   
-
   $
-
    13,819,889   $1,382   $50,656,225   $(58,235,618)  $
-
   $(7,578,011)

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The accompanying notes are an integral part of these audited consolidated financial statements.

 

F-5

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

    Twelve
months ended		     Twelve
months ended		  
    December 31,     December 31,  
    2023     2022  
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net loss   $ (5,837,357 )   $ (10,331,424 )
Net loss from discontinued operations     536,245       88,300  
Net loss from continuing operations     (5,301,112 )     (10,243,124 )
Adjustment to reconcile net loss to net cash used in operating activities:                
Derivative liability movements     (1,501,446 )     (411,752 )
Depreciation     380,634       132,394  
Amortization of debt discount     770,372       263,200  
Loss on novation     1,066,165      
-
  
Investment impairment charge    
-
       1  
Loss on conversion of debt to equity     90,761      
-
  
Loss on convertible notes     73,562       4,602,709  
Fair value of warrants issued for services     159,004       359,125  
Unrealized loss on equity method investments     403,282      
-
  
Shares issued for services    
-
       333,000  
Stock based compensation     377,856       1,594,746  
Changes in Assets and Liabilities                
Other current assets     58,224       (12,008 )
Accounts payable and accrued expenses     1,577,888       288,018  
Interest accruals     392,714       111,528  
Cash used in operating activities - continuing operations     (1,452,096 )     (2,982,163 )
Cash generated by operating activities - discontinued operations     35,287       (79,790 )
CASH USED IN OPERATING ACTIVITIES     (1,416,809 )     (3,061,953 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Investment in equity method investment     (999,000 )    
-
  
Intangibles acquired     (44,405 )     (778,462 )
Investment in deposits    
-
       (12,792 )
Deposits refunded     14,800      
-
  
Plant and equipment purchased    
-
       (43,049 )
Net cash used in investing activities – continuing operations     (1,028,605 )     (834,303 )
Net cash used in investing activities – discontinued operations     (36,230 )     (41,320 )
NET CASH USED IN INVESTING ACTIVITIES     (1,064,835 )     (875,623 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from short term notes and convertible notes     2,461,666      
-
  
Repayment of convertible notes     (304,354 )     (1,147,063 )
Proceeds from non-controlling shareholders    
-
       9,653  
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES     2,157,312       (1,137,410 )
                 
NET DECREASE IN CASH     (324,332 )     (5,074,986 )
CASH AT BEGINNING OF YEAR     374,765       5,449,751  
CASH AT END OF YEAR   $ 50,433     $ 374,765  
                 
RECONCILIATION OF OPENING CASH WITHIN THE BALANCE SHEET TO THE STATEMENT OF CASH FLOWS                
Cash   $ 373,822     $ 5,367,551  
Cash included in assets held for resale     943       82,200  
CASH AT BEGINNING OF THE YEAR   $ 374,765     $ 5,449,751  
                 
RECONCILIATION OF CLOSING CASH WITHIN THE BALANCE SHEET TO THE STATEMENT OF CASH FLOWS                
Cash   $ 50,433     $ 373,822  
Cash included in assets held for resale    
-
       943  
CASH AT END OF THE YEAR   $ 50,433     $ 374,765  
                 
CASH PAID FOR INTEREST AND TAXES:                
Cash paid for income taxes   $
-
     $
-
  
Cash paid for interest   $ (31,403 )   $ 88,260  
                 
NON-CASH INVESTING AND FINANCING ACTIVITIES                
Warrants issued for software development   $
-
     $ 348,938  
Fair value of warrants issued with convertible notes   $ 1,045,655     $
-
  
Conversion of convertible debt to equity   $ 432,500     $
-
  
Fair value of warrants issued for equity method investments   $ 108,220     $
-
  

 

The accompanying notes are an integral part of these audited consolidated financial statements.

 

F-6

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1 ORGANIZATION AND DESCRIPTION OF BUSINESS

 

  a) Organization

 

On May 12, 2016, Innovative Payment Solutions, Inc., a Nevada corporation (“IPSI” or the “Company”) (originally formed on September 23, 2013 under the name “Asiya Pearls, Inc.”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Qpagos Corporation, a Delaware corporation (“Qpagos Corporation”), and Qpagos Merge, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”). Pursuant to the Merger Agreement, on May 12, 2016, the merger was consummated, and Qpagos Corporation and Merger Sub merged (the “Merger”), with Qpagos Corporation continuing as the surviving corporation of the Merger. On May 27, 2016, the Company’s name was changed from “Asiya Pearls, Inc.” to “QPAGOS”.

 

Pursuant to the Merger Agreement, upon consummation of the Merger, each share of Qpagos Corporation’s capital stock issued and outstanding immediately prior to the Merger was converted into the right to receive two shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). Additionally, pursuant to the Merger Agreement, upon consummation of the Merger, the Company assumed all of Qpagos Corporation’s warrants issued and outstanding immediately prior to the Merger, which were exercisable for an aggregate of approximately 621,920 shares of Common Stock as of the date of the Merger. Prior to and as a condition to the closing of the Merger, a then-current holder of 500,000 shares of Common Stock agreed to return 497,500 shares of Common Stock held by such holder to the Company and such holder retained an aggregate of 2,500 shares of Common Stock. The other then stockholders of the Company retained 500,000 shares of Common Stock. Therefore, immediately following the Merger, Qpagos Corporation’s former stockholders held 4,992,900 shares of Common Stock which represented approximately 91% of the outstanding Common Stock.

 

The Merger was treated as a reverse acquisition of the Company, then a public shell company, for financial accounting and reporting purposes. As such, Qpagos Corporation was treated as the acquirer for accounting and financial reporting purposes while the Company was treated as the acquired entity for accounting and financial reporting purposes.

 

Qpagos Corporation was incorporated on May 1, 2015 under the laws of the state of Delaware to effectuate a reverse merger transaction with Qpagos, S.A.P.I. de C.V. (“Qpagos Mexico”) and Redpag Electrónicos S.A.P.I. de C.V. (“Redpag”). Each of the entities were incorporated in November 2013 in Mexico. Qpagos Mexico was formed to process payment transactions for service providers it contracts with, and Redpag was formed to deploy and operate kiosks as a distributor. 

 

On June 1, 2016, the board of directors of the Company (the “Board”) changed the Company’s fiscal year end from October 31 to December 31.

 

On November 1, 2019, the Company changed its corporate name from “QPAGOS” to “Innovative Payment Solutions, Inc.” Additionally, and immediately following the name change, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada to effect a reverse split of the then outstanding Common Stock at a ratio of 1-for-10, effective on November 1, 2019 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each ten pre-split shares of Common Stock outstanding automatically combined into one new share of Common Stock without any further action on the part of the holders, and the number of outstanding shares of Common Stock was reduced from 320,477,867 shares to 32,047,817 after rounding for fractional shares.

 

On December 31, 2019, the Company consummated the disposal of Qpagos Corporation, Qpagos Mexico and Redpag in exchange for 2,250,000 shares (the “Vivi Shares”) of common stock of Vivi Holdings, Inc. (“Vivi. or “Vivi Holdings”) pursuant to a Stock Purchase Agreement dated August 5, 2019 (the “SPA”). Of the 2,250,000 shares of Vivi, nine percent (9%) was allocated as follows: Gaston Pereira (5%), Andrey Novikov (2.5%), and Joseph Abrams (1.5%). The transactions contemplated by the SPA closed on December 31, 2019 after the satisfaction of customary conditions, the receipt of a final fairness opinion and the approval of the Company’s shareholders. As a result, the Company no longer has any business operations in Mexico and has retained its U.S. operations, currently based in Carmel By The Sea, California.

 

F-7

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1 ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

 

  b) Description of current business

 

The Company is currently a fintech provider of digital payment solutions presently focused on, through its participation in IPSIPay Express (as defined below), developing a new account-to-account payment application called Instant Settlement in RealTime as well as traditional credit card processing services. The Company has in the past (under the name IPSIPay) and may in the future develop and operate “e-wallets” that enable consumers to deposit cash, convert it into a digital form and remit funds quickly and securely.

 

IPSIPay Express

 

On April 28, 2023, the Company formed a new company called IPSIPay Express LLC (“IPSIPay Express”). This entity was formed as a Delaware limited liability company joint venture with OpenPath, Inc. (“OpenPath”) and EfinityPay, LLC (“EfinityPay”, and the Company, collectively with OpenPath and EfinityPay, the “Members”) to develop and market a proprietary consumer to merchant real-time payment platform initially focused on the fast-growing online gaming and entertainment sectors.

 

On June 19, 2023, the Company entered into a Limited Liability Company Operating Agreement (the “Operating Agreement”) with OpenPath and EfinityPay to jointly provide for the governance of and rights of the Members with respect to IPSIPay Express. The effective date of the Operating Agreement is April 28, 2023.

 

IPSIPay Express was formed by the Members with the initial business purposes of providing credit card processing solutions and also a proprietary solution for real time bank-to-bank payment transactions in a manner that provides seamless and frictionless consumer and merchant experiences, with an initial focus on merchants operating in gaming and entertainment sectors. Such solutions are collectively referred to herein as “IPEX.”

 

Pursuant to the Operating Agreement, the Company agreed to contribute cash to or on behalf IPSIPay Express to be used for the IPEX business in the aggregate amount of up to $1,500,000 (the “IPSI Capital Contribution”). The Company is required to make the IPSIPay Capital Contribution in three tranches of $500,000 (each, a “Tranche”), or such lesser amounts as may be unanimously approved by the Board of Managers of IPSIPay Express. With the full funding of each Tranche, the Company will automatically receive an 11.11% membership interest in IPSIPay Express (or a pro rata portion thereof if less than a full Tranche is funded), and OpenPath and EfinityPay’s percentage interest in IPSIPay Express will be reduced pro rata accordingly. Should the Company contribute the full IPSI Capital Contribution, the Members will each own one-third (1/3) of the membership interests in IPSIPay Express. The IPSI Capital Contribution has been or will be made by the following dates and in the following amounts: (i) $200,000 of the initial Tranche was paid by the Company on June 21, 2023; (ii) the $300,000 balance of the initial Tranche was paid on August 4, 2023; (iii) the second $500,000 Tranche was paid in September 2023 and (iv) the third $500,000 Tranche was expected to be paid on or before November 30, 2023, subsequently, the Company’s management made a decision not to advance the third tranche to IPSIPay Express as the joint venture is not operational as yet. The need for any additional advances will be addressed with the joint venture partners once the joint venture becomes operational and begins generating revenue, our current shareholding in the joint venture remains at 22%.

 

Simultaneously with the funding of the initial Tranche, the Company issued to each of OpenPath and EfinityPay a five-year common stock purchase warrant (the “IPEX Warrant”) to purchase 133,334 shares of Common Stock with an exercise price of $0.45 per share. We are still obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 199,999 shares of common stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the initial Tranche. Simultaneously with the funding of the second Tranche, we are obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the second Tranche. Should we decide to fund a third Tranche, we will be obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the third Tranche. If the full IPSI Capital Contribution is funded, OpenPath and EfinityPay will receive IPEX Warrants to purchase an aggregate of 1,333,334 shares of Common Stock.

 

Frictionless Financial Technologies

 

On June 21, 2021. the Company acquired a 10% strategic interest in Frictionless Financial Technologies, Inc. (“Frictionless”). Frictionless agreed to deliver to the Company, a live fully compliant financial payment Software as a Service solution for use by the Company as a digital payment platform (which was subsequently branded as IPSIPay) that enables payments within the United States and abroad, including Mexico, together with a service agreement providing a full suite of product services to facilitate the Company’s anticipated product offerings. The Company had an irrevocable right to acquire up to an additional 41% of the outstanding common stock of Frictionless at a purchase price of $300,000 for each 1% acquired.

 

F-8

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1 ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

 

  b) Description of current business (continued)

 

On August 26, 2021, the Company formed a new subsidiary, Beyond Fintech, Inc. (“Beyond Fintech”), in which it owns a 51% stake, with Frictionless owning the remaining 49%. Beyond Fintech acquired an exclusive license to a product known as Beyond Wallet, to further its objective of providing virtual payment services allowing U.S. persons to transfer funds to Mexico and other countries.

 

On May 12, 2023, the Company entered into an Agreement with Frictionless (the “May 2023 Frictionless Agreement”) to unwind the equity ownership stakes that the Company and Frictionless have in each other and in Beyond Fintech. Pursuant to the May 2023 Frictionless Agreement: (i) the Company assigned to Frictionless all common stock of Frictionless owned by the Company; (ii) the warrant to purchase 1,000,000 (30,000,000 pre-split) shares of Common Stock previously issued by the Company to Frictionless as of December 30, 2022 was cancelled; (iii) the Company assigned to Frictionless all shares of common stock of Beyond Fintech owned by the Company (the “Beyond Fintech Shares”); and (iv) the rights previously granted to the Company to (a) acquire additional equity interests in Frictionless, (b) participate in future financings of Frictionless and (c) appoint a board member of Frictionless, were terminated. The consideration to the Company for the assignment of the Beyond Fintech Shares to Frictionless was a credit against potential future services to be provided by Frictionless to the Company in an amount up to $250,000. As a result of the novation agreement with Frictionless discussed below (see note 5), the Company no longer utilizes, and does not expect to utilize, the services of Frictionless for the foreseeable future. The collectability of the remaining credit receivable of $231,431 has been impaired.

 

On September 5, 2023, the Company’s entered into a novation agreement whereby it assigned all its rights and interest in its e-wallet product, IPSIPay, and its receivables and payables due from and to Frictionless, related to IPSIPay, to a third party in order to concentrate all of its efforts on the IPSIPay Express joint venture. See note 5 for further information.

 

2 ACCOUNTING POLICIES AND ESTIMATES

 

  a) Basis of Presentation

 

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

 

All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

 

  b) Principles of Consolidation

 

The consolidated financial statements as of December 31, 2023, include the financial statements of the Company and its subsidiary, Beyond Fintech, in which it had a majority voting interest, until May 12, 2023, the date of disposal. Pursuant to the May 2023 Frictionless Agreement, the Company disposed of its 51% interest in Beyond Fintech. Therefore, as of May 12, 2023 the Company has no subsidiaries. See note 4 for further information.

 

All significant inter-company accounts and transactions have been eliminated in the consolidated financial statements.

 

  c) Use of Estimates

 

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which are evaluated on an ongoing basis, that affect the amounts reported in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to, the estimated useful lives for plant and equipment, the fair value of long-lived investments, the fair value of warrants and stock options granted for services or compensation, convertible notes and amendments thereto, derivative liabilities, the valuation allowance for deferred tax assets due to continuing operating losses and the allowance for doubtful accounts.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

 

F-9

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

 

  d) Contingencies

 

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

 

The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

 

  e) Fair Value of Financial Instruments

 

The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

 

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

 

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

 

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

 

The carrying amounts reported in the balance sheets for cash, accounts receivable, other current assets, other assets, accounts payable, accrued liabilities, and notes payable, approximate fair value due to the relatively short period to maturity for these instruments. The Company has identified the short-term convertible notes and certain warrants attached to certain of the notes that are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.

 

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We evaluate the fair value of variably priced derivative liabilities on a quarterly basis and report any movements thereon in earnings.

 

  f) Risks and Uncertainties

 

The Company’s operations are and will be subject to significant risks and uncertainties including financial, operational, regulatory, and other risks, including the potential risk of business failure. The recent war in Ukraine and the global inflationary environment which has resulted in significant interest rate increases in the U.S and abroad has resulted in a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, and extreme volatility in credit, equity and fixed income markets. These conditions may not only limit the Company’s access to capital, but also make it difficult for its customers, vendors and the Company to accurately forecast and plan future business activities, which may have an adverse impact on its business and financial condition and may hamper the Company’s ability to generate revenue and access usual sources of liquidity on reasonable terms.

 

The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

 

F-10

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

 

  g) Recent accounting pronouncements

 

The Financial Accounting Standards Board (“FASB”) issued additional updates during the year ended December 31, 2023. None of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the Company’s consolidated financial statements upon adoption.

 

  h) Reporting by Segment

 

No segmental information is required as the Company has only one operating segment.

 

  i) Cash and Cash Equivalents

 

The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. At December 31, 2023 and 2022, respectively, the Company had no cash equivalents.

 

The Company minimizes credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution in the United States. The balance at times may exceed federally insured limits. At December 31, 2023 and 2022, the balance exceeds the federally insured limit by $0 and $120,580, respectively.

 

  j) Accounts Receivable and Allowance for Doubtful Accounts

 

Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Revisions to the allowance for doubtful accounts estimates are recorded as an adjustment to bad debt expense. Receivables deemed uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written-off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. There were no recoveries during the period ended December 31, 2023 and 2022.

 

  k) Investments

 

The Company’s non-marketable equity securities are investments in privately held companies without readily determinable market values. The carrying value of our non-marketable equity securities is adjusted to fair value for observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative). All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. Non-marketable equity securities that have been remeasured during the period are classified within Level 3 in the fair value hierarchy because the Company estimates the value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities the Company holds. The cost method is used when the Company has a passive, long-term investment that doesn’t result in influence over the Company. The cost method is used when the investment results in an ownership stake of less than 20%, and there is no substantial influence. Under the cost method, the stock purchased is recorded on a balance sheet as a non-current asset at the historical acquisition/purchase price, and is not modified unless shares are sold, additional shares are purchased or there is evidence of the fair market value of the investment declining below carrying value. Any dividends received are recorded as income.

 

The Company recorded an impairment charge of $0 and $1 on its non-marketable equity securities for the years ended December 31, 2023 and 2022, respectively. The impairment charge was based on management’s determination that due to the lack of ability, to date, by Vivi Holdings (“Vivi”) to fulfill its capital raising requirements and implement its business strategy that there is a significant risk that Vivi may not be able to meet its obligations. 

 

F-11

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

  

  l) Plant and Equipment

 

Plant and equipment is stated at cost, less accumulated depreciation. Plant and equipment with costs greater than $1,000 are capitalized and depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:

 

Description   Estimated Useful Life
     
Kiosks   7 years
     
Computer equipment   3 years
     
Leasehold improvements   Lesser of estimated useful life or life of lease
     
Office equipment   10 years

 

The cost of repairs and maintenance is expensed as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition.

 

  m) Long-Term Assets

 

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

 

  n) Revenue Recognition

 

The Company’s revenue recognition policy is consistent with the requirements of FASB ASC 606, Revenue.

 

The Company’s revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services, as defined below. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions:

 

  i. identify the contract with a customer;

 

  ii. identify the performance obligations in the contract;

 

  iii. determine the transaction price;

 

  iv. allocate the transaction price to performance obligations in the contract; and

 

  v. recognize revenue as the performance obligation is satisfied.

 

The Company had minimal revenues of $410 and $847 during the years ended December 31, 2023 and 2022, respectively. 

 

F-12

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

 

  o) Share-Based Payment Arrangements

 

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments is recorded in operating expenses in the consolidated statement of operations.

 

Prior to the Company’s reverse merger which took place on May 12, 2016, all share-based payments were based on management’s estimate of market value of the Company’s equity. The factors considered in determining managements estimate of market value includes, assumptions of future revenues, expected cash flows, market acceptability of our technology and the current market conditions. These assumptions are complex and highly subjective, compounded by the business being in its early stage of development in a new market with limited data available.

 

Where equity transactions with arms-length third parties, who had applied their own assumptions and estimates in determining the market value of our equity, had taken place prior to and within a reasonable time frame of any share-based payments, the value of those share transactions have been used as the fair value for any share-based equity payments.

 

Where equity transactions with arms-length third parties, included both shares and warrants, the value of the warrants have been eliminated from the unit price of the securities using a Black-Scholes valuation model to determine the value of the warrants. The assumptions used in the Black Scholes valuation model includes market related interest rates for risk-free government issued treasury securities with similar maturities; the expected volatility of the Company’s common stock based on companies operating in similar industries and markets; the estimated stock price of the Company; the expected dividend yield of the Company and; the expected life of the warrants being valued.

 

Subsequent to the Company’s reverse merger which took place on May 12, 2016, the Company has utilized the market value of its common stock as quoted on the OTCQB, as an indicator of the fair value of its common stock in determining share- based payment arrangements.

 

  p) Derivative Liabilities

 

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

 

  q) Income Taxes

 

The Company is based in the US and currently enacted US tax laws are used in the calculation of income taxes.

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, 2023 and December 31, 2022, there have been no interest or penalties incurred on income taxes.

 

F-13

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

 

  r) Comprehensive income

 

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. The Company does not have any comprehensive income (loss) for the periods presented.

 

  s) Reclassification of prior year presentation

 

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

 

3 LIQUIDITY MATTERS AND GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. For and as of the year ended December 31, 2023, the Company had a net loss of $5,837,357. In connection with preparing the consolidated financial statements for the year ended December 31, 2023, management evaluated the risks described in Note 2(f) above on the Company’s business and its future liquidity for the next twelve months from the date of issuance of these financial statements.

 

The accompanying financial statements for the period ended December 31, 2023 have been prepared assuming the Company will continue as a going concern, but the ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, and reduce the scope of the Company’s development and operations. Continuing as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The Company has determined that there is substantial doubt about their ability to continue as a going concern.

  

4 DISPOSAL OF INVESTMENT IN FRICTIONLESS AND BEYOND FINTECH

 

On May 12, 2023, the Company entered into the May 2023 Frictionless Agreement to unwind the equity ownership stakes that the Company and Frictionless have in each other and in Beyond Fintech. Pursuant to the May 2023 Frictionless Agreement: (i) the Company assigned to Frictionless all common stock of Frictionless owned by the Company (representing a 10% ownership interest in Frictionless); (ii) the warrant to purchase 1,000,000 shares of Common Stock previously issued by the Company to Frictionless as of December 30, 2022 was cancelled; (iii) the Company assigned to Frictionless all shares of common stock of Beyond Fintech owned by the Company (representing a 51% ownership interest in Beyond Fintech) (the “Beyond Fintech Shares”); and (iv) the rights previously granted to the Company to (a) acquire additional equity interests in Frictionless, (b) participate in future financings of Frictionless and (c) appoint a board member of Frictionless were terminated. The consideration to the Company for the assignment of the Beyond Fintech Shares to Frictionless is $250,000, which will be paid by Frictionless exclusively in the form of 20% credits against invoices for work done by Frictionless for the Company for the 18-mobnth period following the closing under the existing software services between the Company and Frictionless. The May 2023 Frictionless Agreement has customary representations, indemnification and mutual release provisions. The closing of the transactions contemplated by the May 2023 Frictionless Agreement occurred on May 12, 2023.

 

F-14

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

4 DISPOSAL OF INVESTMENT IN FRICTIONLESS AND BEYOND FINTECH (continued)

 

The assets and liabilities disposed of as of May 12, 2023 were as follows:

 

   Amount 
Assets    
     
Current Assets    
Cash  $339 
      
Non-current assets     
Intangible assets   327,211 
Security deposit   15,000 
Investment   500,000 
    842,211 
Total assets   842,550 
      
Liabilities     
      
Current Liabilities     
Accounts payable   97,126 
      
Net assets sold   745,424 
Proceeds due on disposal   (250,000)
Net loss on disposal  $495,424 

 

5 NOVATION  OF CERTAIN ASSETS AND LIABILITES

 

On September 5, 2023, the Company entered into a novation agreement with a third party whereby the third party assumed all of the Company’s debts, clients, and services and assumes all the rights and responsibilities of the Company under the SAAS Cloud Hosted Services Enablement Master Services Agreement, dated September 9, 2021 (the “SAAS Agreement”), including the information technology, supplier access, billing and rating technology, mobile wallet, debit card enablement, back-office support services, customer service, and consulting services related to the Company’s IPSIPay mobile application.

 

Pursuant to the novation agreement, Frictionless released the Company from all its obligations, debts, and liabilities under the SAAS Agreement as of September 5, 2023 and consented to the third party assuming these obligations. Each party agreed to indemnify the other party harmless for any damages, claims or expenses incurred by the other party.

 

The novation agreement also provided the third party a 30-day transition period in which the Company assisted the third party in transferring all the assets and obligations, including existing customers and wallets to the third party, thereafter the third party will no longer be permitted to operate the IPSIPay app under the brand name “IPSIPay”.

 

F-15

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

5 NOVATION  OF CERTAIN ASSETS AND LIABILITES (continued)

 

The assets and liabilities novated under the agreement as of September 5, 2023, were as follows:

 

   Amount 
Assets    
     
Current Assets    
Receivable on sale of subsidiary  $231,431 
      
Non-current assets     
Intangible assets   1,098,598 
Total assets   1,330,029 
      
Current Liabilities     
Accounts payable   263,864 
      
Net loss on novation  $1,066,165 

 

6 DISCONTINUED OPERATIONS

 

Effective May 12, 2023, the Company disposed of its investment in Beyond Fintech pursuant to the May 2023 Frictionless Agreement, as disclosed in note 4 above.

 

The following assets and liabilities are reported as discontinued operations:

 

   December 31, 
   2022 
Current assets    
Cash  $943 
Non-current assets     
Intangibles, net   291,320 
Investment   500,000 
Security deposit   15,000 
Assets held for sale  $807,263 
      
Current liabilities     
Accounts payable  $33,810 
Liabilities held for sale  $33,810 

 

The statement of operations from discontinued operations is as follows:

 

   Year ended December 31, 
   2023   2022 
         
Net Revenue  $
-
   $
-
 
           
Cost of Goods Sold   
-
    
-
 
           
Gross loss   
-
    
-
 
           
General and administrative   40,821    88,300 
Depreciation and amortization   
-
    
-
 
Total Expense   40,821    88,300 
           
Loss from operations before income taxes   (40,821)   (88,300)
           
Income Taxes   
-
    
-
 
Loss from discontinued operations, net of taxation  $(40,821)  $(88,300)

 

F-16

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

7 INTANGIBLES

 

On August 26, 2021, the Company formed Beyond Fintech to acquire a product known as Beyond Wallet from a third party for gross proceeds of $250,000, together with the logo, use of name and implementation of the product into the Company’s technology. The Company owned 51% of Beyond Fintech with the other 49% owned by Frictionless. During the year ended December 31, 2022 and the nine months ended September 30, 2023, an additional $41,320 and $35,891, respectively, was spent on the software to further enhance the Beyond Wallet product offering.  On May 12, 2023, Beyond Fintech was sold to Frictionless (see note 4 above).

 

During the year ended December 31, 2021, the Company paid gross proceeds of $375,000 to Frictionless for the development of the IPSIPay wallet, and during the year ended December 31, 2022 and the nine months ended September 30, 2023, an additional $1,127,400 and $44,405, respectively, was incurred by the Company to facilitate the functioning of the IPSIPay software in the cloud environment. On September 5, 2023, the Company novated all its rights and obligations to its IPSIPay wallet to a third party (see note 5 above).

 

   December 31,
2023		   December 31,
2022		 
   Cost   Accumulated
amortization		   Net Book
Value		   Net book
value		 
Purchased Technology - IPSIPay  $
-
   $
-
   $
-
   $1,401,491 

 

Amortization expense was $347,298 and $100,909 for the years ended December 31, 2023 and 2022, respectively.

 

8 EQUITY METHOD INVESTMENT

 

On April 28, 2023, the Company formed IPSIPay Express with OpenPath and EFinityPay (see note 1(b) above). As described in note 1(b), the Company has agreed to make the IPSI Capital Contributions to IPSIPay Express. As of December 31, 2023, the initial Tranche of $500,000 and the second Tranche of $500,000 of capital contributions was paid by the Company to or on behalf of IPSIPay Express.

 

The Company accounts for its investment in IPSIPay Express in accordance with ASC 323, Investments – Equity Method and Joint Ventures, the movement in equity method investments related to IPSIPay Express for the period ended December 31, 2023 is as follow:

 

   December 31,
2023		 
Cash contribution to IPSIPay Express  $999,000 
Fair value of warrants issued to third party joint venture partners   108,220 
    1,107,220 
Equity loss from joint venture   (403,282)
   $703,938 

    

9 INVESTMENTS

 

Investment in Frictionless Financial Technologies Inc.

 

On May 12, 2023, the Company assigned to Frictionless all common stock of Frictionless owned by the Company (representing a 10% ownership interest in Frictionless). refer Note 4 above.

  

10 LEASES

 

On March 22, 2021, the Company entered into a real property lease for an office located at 56B 5th Street, Lot 1, #AT, Carmel By The Sea, California. The lease commenced on April 1, 2021 and is for a twelve-month period, terminating on April 1, 2022. Following the expiry of the lease term, the landlord has agreed to continue the lease on a month-to-month basis at $4,800 per month. On January 1, 2023, the Company entered into a new month-to-month lease, with a 90-day termination clause, for a monthly rental of $5,088. The lease was terminated effective August 31, 2023.

 

The Company applied the practical expedient whereby operating leases with a duration of twelve months or less are expensed as incurred.

 

F-17

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

10 LEASES (continued)

 

Total Lease Cost

 

Individual components of the total lease cost incurred by the Company is as follows:

 

   Year ended December 31,
2023		   Year ended December 31,
2022		 
Operating lease expense  $40,704   $57,600 

 

Other lease information:

 

   Year ended December 31,
2023		   Year ended December 31,
2022		 
Cash paid for amounts included in the measurement of lease liabilities        
Operating cash flows from operating leases  $(40,704)  $(57,600)
           
Remaining lease term – operating lease   -    Monthly 

 

11 FEDERAL RELIEF LOANS

 

Small Business Administration Disaster Relief loan

 

On July 7, 2020, the Company received a Small Business Economic Injury Disaster loan amounting to $150,000, bearing interest at 3.75% per annum and repayable in monthly installments of $731 commencing twelve months after inception with the balance of interest and principal repayable on July 7, 2050. The loan is secured by all tangible and intangible assets of the Company. The proceeds are to be used for working capital purposes to alleviate economic injury caused by the COVID-19 pandemic.

 

The company has accrued interest of $9,369 and $13,978 on this loan as of December 31, 2023 and 2022, respectively.

 

12 NOTES PAYABLE

 

On February 16, 2021, the Company entered into separate Securities Purchase Agreements (the “SPAs”), with each of Cavalry Fund I LP (“Cavalry”) and Mercer Street Global Opportunity Fund, LLC (“Mercer”), pursuant to which the Company received $500,500 and $500,500 from Cavalry and Mercer, respectively, in exchange for the issuance of: (i) Original Issue Discount 12.5% Convertible Notes (the “Notes” and each a “Note”) in the principal amount of $572,000 to each of Cavalry and Mercer; and (ii) five-year warrants (the “Original Warrants”) issued to each of Cavalry and Mercer to purchase 2,486,957 shares of the Company’s common stock at an exercise price of $0.24 per share.

 

In terms of the December 30, 2022 Note Amendment Transaction, described in more detail in Note 9 below, the Original Warrants issued on February 16, 2021 were irrevocably exchanged for 12-month non-convertible promissory notes in the amount of $482,000 (the “Exchange Notes”) to each of Cavalry and Mercer. This exchange caused the cancellation of the Original Warrants for all purposes. The Company accounted for the aggregate value of the notes issued of $964,000, less the fair value of the warrants exchanged for these notes of $43,608, totaling $920,392 as a component of the loss on convertible debt.

 

The Exchange Notes have a maturity date of December 30, 2023 and carry an interest rate of ten percent (10%). The Company shall have the right, but not the obligation, in lieu of a cash payment upon maturity of the Exchange Notes, to issue 51,901,711 shares of common stock, as adjusted for any stock splits, dividends or other similar corporate events, in full satisfaction of its obligations under each of the Exchange Notes (or any pro rata portion of such number of shares in partial satisfaction of such obligations). The Company is under no legal obligation to reserve such number of shares for future issuance.

 

Subsequent to year end, the maturity date of the notes was extended to April 30, 2024, all other terms remain the same as the previous notes. The Company will perform an analysis to determine whether the amendment meets the definition of a debt extinguishment or modification in terms of ASC 470.

 

F-18

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

12 NOTES PAYABLE (continued)

 

Notes payable consists of the following:

 

Description  Interest
Rate		   Maturity
date		  Principal   Accrued
Interest		   December 31, Amount, net  

December 31,
2022
Amount,

net

 
Cavalry Fund I LP   10%  April 30, 2024   482,000    49,004    531,004    482,134 
Mercer Street Global Opportunity Fund, LLC   10%  April 30, 2024   482,000    49,003    531,003    482,134 
Total convertible notes payable          $964,000   $98,007   $1,062,007   $964,268 

    

Interest expense totaled $97,739 and $268 for the year ended December 31, 2023 and 2022, respectively.

  

13 CONVERTIBLE NOTES PAYABLE

 

December 2022 Note Amendment Transaction

 

The Company twice extended its indebtedness to each Cavalry and Mercer. On February 3, 2022, the Company agreed to extend the maturity date of the Cavalry/Mercer Notes to August 16, 2022. Additionally, on August 30, 2022, the Company entered agreements for an additional maturity date extension to November 16, 2022. In consideration for the second extension, the Company agreed to (i) increase the principal amount outstanding and due to Cavalry and Mercer under the Cavalry/Mercer Notes by twenty percent (20%) and (ii) issue to each of Cavalry and Mercer a new five-year warrant (each, an “Extension Warrant”) to purchase an additional 100,000 (3,000,000 pre-split) shares of Common Stock at an exercise price of $4.50 ($0.15 pre-split) per share. The Extension Warrant contains the same terms and provisions in all material respects as the Original Warrants, except for difference in exercise price.

 

On December 30, 2022, the Company again extended the maturity dates of each of the Cavalry/Mercer Notes to December 30, 2023. Each of Cavalry and Mercer entered into Note Amendment Letter Agreement with the Company (the “Note Amendment”) pursuant to which the parties agreed to the following:

 

  (1) The conversion price of the Cavalry/Mercer Notes was reduced from $4.50 ($0.15 pre-split) to $0.345 ($0.0115 pre-split) per share (such reduced conversion price being the current conversion price of the Notes give the passage of the November 16, 2022 maturity date of the Cavalry/Mercer Notes). As a result of this change in conversion price, under the existing terms of the Cavalry/Mercer Notes, the 100,000 (3,000,000 pre-split) shares of Common Stock underlying the Extension Warrants was increased to 1,304,348 (39,130,435 pre-split) shares;

 

  (2) The Original Warrants issued on February 16, 2021 were irrevocably exchanged for 12-month non-convertible promissory notes in the amount of $482,000 (the “Exchange Notes”). This exchange caused the cancellation of the Original Warrants for all purposes. The Exchange Notes have a maturity date of December 30, 2023 and carry an interest rate of ten percent (10%). The Company shall have the right, but not the obligation, in lieu of a cash payment upon maturity of the Exchange Notes, to issue 1,730,057 shares of Common Stock, as adjusted for any stock splits, dividends or other similar corporate events, in full satisfaction of its obligations under each of the Exchange Notes (or any pro rata portion of such number of shares in partial satisfaction of such obligations). The Company is under no legal obligation to reserve such number of shares for future issuance;

 

  (3) Each of Cavalry and Mercer agreed (i) not to convert all or any portion of the Cavalry/Mercer Notes until after March 30, 2023 and (ii) waive any events of default under the Cavalry/Mercer Notes and the Cavalry/Mercer SPAs;

 

  (4) Certain other warrants held by Cavalry and Mercer which contain a mandatory exercise provision allowing us to force exercise of such warrants if the price of the Common Stock is $1.80 ($0.06 pre-split) per share or above were amended effective December 30, 2022 to reduce such forced exercise price to $1.20 ($0.04 pre-split) per share; and

 

  (5) The Company was obligated to register the shares of Common Stock underlying the Cavalry/Mercer Notes and the shares underlying all warrants held by Cavalry and Mercer for resale with the Securities and Exchange Commission and the Company filed the registration statement to satisfy such registration obligation.

 

F-19

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

13 CONVERTIBLE NOTES PAYABLE (continued)

 

December 2022 Note Amendment Transaction (continued)

 

The parties also acknowledged that the principal and accrued interest under the Cavalry/Mercer Notes as of December 28, 2022 is equal to an aggregate of $2,264,784, or $1,132,392 for each of Cavalry and Mercer. In addition, as a result of the reduction in the conversion price of the Cavalry/Mercer Notes, certain other warrants held by third parties have their exercise price of such warrants reduced to $0.345 ($0.0115 pre-split) per share. All of the shares of our Common Stock underlying the Cavalry/Mercer Notes as amended and all warrants held by Cavalry and Mercer as adjusted were registered for resale pursuant to a registration statement that was declared effective on February 6, 2023.

 

The amendments to the Cavalry/Mercer Notes were evaluated in terms of ASC 470, Debt, to determine if the amendments to the Cavalry/Mercer Notes were considered a modification of the debt or an extinguishment of the debt. Based on the penalty interest incurred on the convertible notes of $836,414, the reduction in the conversion price of the Cavalry/Mercer Notes from $4.50 ($0.15 pre-split) to $0.345 ($0.0115 pre-split) per share, which was valued at $1,499,577 using a Black-Scholes valuation model, the issuance of additional warrants to the Cavalry and Mercer valued at $238,182 using a Black-Scholes valuation model and the conversion of certain warrants held by Cavalry and Mercer to notes payable, resulting in an additional charge of $920,392, consisting of a mark-to-market warrant cost of $(43,608) and the value of the notes of $964,000 (see note 11 above) and the value of full rachet provisions of certain of the warrants issued to the Cavalry and Mercer amounting to $841,003 (see note 14 below), the amendment of the Cavalry/Mercer Notes was determined to be a debt extinguishment.

 

Effective December 30, 2023 on February 27, 2024, the Company again extended the maturity dates of each of the Cavalry/Mercer Notes to April 30, 2024, other than the maturity date all other terms remained the same. The Company will perform an analysis to determine whether the amendment meets the definition of a debt extinguishment or modification in terms of ASC 470.

 

Convertible notes payable consists of the following:

 

Description   Interest
Rate		     Maturity
date		   Principal     Accrued
Interest		     Unamortized
debt discount		     December 31,
2023
Amount,
net		     December  31,
2022
Amount,
net		  
Cavalry Fund I LP     10.00 %   April 30, 2024     898,980       10,238       -       909,218       1,133,301  
                                                     
Mercer Street Global 
Opportunity Fund, LLC		     10.00 %   April 30, 2024     991,754       148,010       -       1,139,764       1,133,301  
                                                     
Red Road Holdings Corporation     29.32 *%   June 15, 2024     101,679       1,393       (61,301 )     41,771       -  
      27.77 *%   July 30 2024     66,606       1,622       (49,545 )     18,683       -  
      32.04 *%   September 30, 2024     63,250       668       (60,809 )     3,109       -  
                                                     
2023 convertible notes      8.00 to 12.00 %   December 31, 2023 to September 14, 2024     2,026,666       80,916       (515,847 )     1,591,735       -  
                                                     
Total convertible notes payable               $ 4,148,935     $ 242,847     $ (687,502 )   $ 3,704,280     $ 2,266,602  

 

*The red Road Holdings Corporation interest rate is an effective interest rate as these convertible notes have a fixed interest charge which is earned on the issuance date, regardless of when payments are made.

 

Interest expense totaled $319,543 and $193,886 for the years ended December 31, 2023 and 2022, respectively.

 

Amortization of debt discount totaled $770,372 and $263,200  for the years ended December 31, 2023 and 2022, respectively.

 

The Cavalry, Mercer and Red Road Holdings convertible notes have variable conversion prices based on a discount to market price of trading activity over a specified period of time. The variable conversion features were valued using a Black Scholes valuation model. The difference between the fair market value of the Common Stock and the calculated conversion price on the issuance date was recorded as a debt discount with a corresponding credit to derivative financial liability.

 

F-20

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

13 CONVERTIBLE NOTES PAYABLE (continued)

 

Cavalry Fund LLP

 

On February 16, 2021, the Company closed a transaction with Cavalry pursuant to which the Company received net proceeds of $500,500, after an original issue discount of $71,500 in exchange for the issuance of a $572,000 Senior Secured Convertible Note, bearing interest at 10% per annum and maturing on February 16, 2022. The Note was convertible into shares of Common Stock at an initial conversion price of $0.23 per share, in addition, the Company issued a warrant exercisable for 82,899 shares of Common Stock at an initial exercise price of $7.20 per share.

 

As described more fully above, the maturity date of the note was extended to August 16, 2022, additionally to November 16, 2022 and again to December 30, 2023. In consideration for the November 16, 2022 extension, the Company agreed to (i) increase the principal amount outstanding and due to Cavalry by twenty percent (20%) and (ii) issue a new five-year warrant to purchase an additional 100,000 shares of Common Stock at an exercise price of $4.50 per share. In consideration of the December 30, 2022 extension, the Company agreed to the following terms; (i) the conversion price of the Note was reduced from $4.50 to $0.345 per share; (ii) Cavalry agreed (a) not to convert all or any portion of the Notes until after March 30, 2023 and (b) waive any events of default under the Note and the SPA; (iii) the Company agreed to and registered the shares of Common Stock underlying the Note and the shares underlying all warrants held by Cavalry for resale with the Securities and Exchange Commission and filed the registration statement to satisfy the Company’s registration obligation.  

 

Between August 24, 2023 and November 20, 2023, Cavalry converted $139,726 of interest and $192,774 of interest into 963,769 shares of Common Stock at a conversion price of $0.345 per share realizing a loss on conversion of $42,210.

 

Subsequent to year end, on February 27, 2024, the maturity date of the notes was extended to April 30, 2024, all other terms remain the same as the previous notes. Based on an analysis performed, the amendment to the agreement was determined to be a debt modification, there were no expenses incurred on the amendment and interest will be accrued at the effective interest rate.

 

The balance of the Cavalry Note plus accrued interest at December 31, 2023 was $909,218.

 

Mercer Street Global Opportunity Fund, LLC

 

On February 16, 2021, the Company closed a transaction with Mercer, pursuant to which the Company received net proceeds of $500,500, after an original issue discount of $71,500 in exchange for the issuance of a $572,000 Senior Secured Convertible Note, bearing interest at 10% per annum and maturing on February 16, 2022. The Note is convertible into shares of Common Stock at an initial conversion price of $6.90 per share, in addition, the Company issued a warrant exercisable for 82,899 shares of Common Stock at an initial exercise price of $7.20 per share.

 

As described more fully above, the maturity date of the note was extended to August 16, 2022, additionally to November 16, 2022 and again to December 30, 2023. In consideration for the November 16, 2022 extension, the Company agreed to (i) increase the principal amount outstanding and due to Mercer by twenty percent (20%) and (ii) issue a new five-year warrant to purchase an additional 100,000 shares of Common Stock at an exercise price of $4.50 per share. In consideration of the December 30, 2022 extension, the Company agreed to the following terms; (i) the conversion price of the Note was reduced from $4.50 to $0.345 per share; (ii) Mercer agreed (a) not to convert all or any portion of the Notes until after March 30, 2023 and (b) waive any events of default under the Note and the SPA; (iii) the Company agreed to and registered the shares of Common Stock underlying the Note and the shares underlying all warrants held by Mercer for resale with the Securities and Exchange Commission and filed the registration statement to satisfy the Company’s registration obligation.

 

Between May 19, 2023 and August 30, 2023, Mercer converted an aggregate of $100,000 into 289,856 shares of common stock at a conversion price of $0.345 per share, realizing a loss on conversion of $48,551.

 

On February 27, 2024, Cavalry entered into a note amendment with the company extending the maturity date of the convertible note to April 30, 2024.

 

The balance of the Mercer Note plus accrued interest at December 31, 2023 was $1,139,764.

 

Quick Capital, LLC

 

On June 20, 2023, the Company closed a transaction with Quick Capital, LLC pursuant to which the Company received net proceeds of $50,000, after an original issue discount and fees of $12,857 in exchange for the issuance of a $62,857 Convertible Note, bearing interest at 8% per annum, which interest is earned on issuance of the note, and maturing on December 20, 2023. The Note is convertible into shares of Common Stock at an initial conversion price of $0.345 per share, in addition, the Company issued a warrant exercisable for 182,194 shares of Common Stock at an initial exercise price of $0.345 per share.

 

On December 20, 2023, the Company settled the outstanding principal of $62,857 and interest thereon of $2,514, of the Quick Capital note, thereby extinguishing the debt.

 

F-21

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

13 CONVERTIBLE NOTES PAYABLE (continued)

  

1800 Diagonal Street Lending LLC

 

●On May 10, 2023, the Company closed a transaction with 1800 Diagonal Street Lending LLC (“1800 Diagonal”) pursuant to which the Company received net proceeds of $100,000, after an original issue discount and fees of $17,320 in exchange for the issuance of a $117,320 Convertible Note (the “May 1800 Diagonal Note”), bearing interest at 13% per annum, which interest is earned on issuance of the note, and maturing on May 10, 2024. The May 1800 Diagonal Note was convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion.

 

  ●

On June 13 2023, the Company closed a transaction with 1800 Diagonal, pursuant to which the Company received net proceeds of $50,000, after an original issue discount and fees of $12,700 in exchange for the issuance of a $62,700 Convertible Note (the “June 1800 Diagonal Note”), bearing interest at 17.33% per annum, which interest is earned on issuance of the note, and maturing on March 13, 2024. The June 1800 Diagonal Note was convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion. 

 

On August 3, 2023, the Company settled in full, the outstanding convertible notes owing to 1800 Diagonal, for $194,386, including the principal amount of $180,020, early settlement penalty of $9,306 and interest thereon of $5,060.

 

Red Road Holdings Corporation

 

  ●

On September 9, 2023, the Company closed a transaction with Red Road Holdings Corporation (“RRH”) pursuant to which the Company received net proceeds of $125,000, after an original issue discount and fees of $21,900 in exchange for the issuance of a $146,900 Convertible Note (“RRH Note 1”), bearing interest at 13%, which interest is earned on issuance of the note, an effective interest rate of 29.3%, and maturing on June 15, 2024. The RRH Note 1 has mandatory monthly repayments of $18,444 which commenced on October 14, 2023. The RRH Note 1 is convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion.

 

The balance of the RRH Note 1 plus accrued interest at December 31, 2023 was $41,772, net of unamortized debt discount of $61,301.

     
  ●

On October 19, 2023, the Company closed a transaction with RRH pursuant to which the Company received net proceeds of $60,000, after an original issue discount and fees of $13,450 in exchange for the issuance of a $73,450 Convertible Note (“RRH Note 2”), bearing interest at 13%, which interest is earned on issuance of the note, an effective interest rate of 27.8%, and maturing on July 30, 2024. The RRH Note 2 has mandatory monthly repayments of $9,222 which commenced on November 30, 2023. The RRH Note 2 is convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion.

 

The balance of the RRH Note 2 plus accrued interest at December 31, 2023 was $18,683, net of unamortized debt discount of $49,545.

     
  ●

On December 20, 2023, the Company closed a transaction with RRH pursuant to which the Company received net proceeds of $50,000, after an original issue discount and fees of $13,250 in exchange for the issuance of a $63,250 Convertible Note (“RRH Note 3”), bearing interest at 15%, which interest is earned on issuance of the note, an effective interest rate of 32.0%, and maturing on September 30, 2024. The RRH Note 3 has mandatory monthly repayments of $8,082. The RRH Note 3 is convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion.

 

The balance of the RRH Note 3 plus accrued interest at December 31, 2023 was $3,109, net of unamortized debt discount of $60,809.

 

F-22

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

13 CONVERTIBLE NOTES PAYABLE (continued)

 

2023 Convertible Notes

 

Between February 13, 2023 and November 27, 2023, the Company entered into Securities Purchase Agreements with 30 accredited investors, pursuant to which the Company received an aggregate of $2,026,666 in gross proceeds in a private placement through the issuance of:

 

  ● Convertible Promissory Notes (the “2023 Notes” and each a “2023 Note”); and

 

  ● five-year warrants (the “2023 Warrants”) to purchase an aggregate 5,696,586 shares of Common Stock at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events).

 

The 2023 Notes mature between 3.5 months and 12 months, bear interest at rates between 8% and 12% per annum, and are convertible into shares of Common Stock at a conversion price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The 2023 Notes may be prepaid at any time without penalty. The Company is under no obligation to register the shares of Common Stock underlying the Notes or the 2023 Warrants for public resale.

 

The 2023 Notes and the 2023 Warrants contain conversion limitations providing that a holder thereof may not convert the 2023 Notes or exercise the 2023 Warrants to the extent that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the outstanding shares of the Common Stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice.

 

On December 14, 2023, two notes totaling $225,000 which matured on December 31, 2023 were rolled over for an additional 3 months to March 30, 2024. In exchange for the roll-over, the Company issued the note holders warrants exercisable for 292,463 shares of common stock at an exercise price of $0.345 per share.

 

The balance of the 2023 Notes plus accrued interest at December 31, 2023 was $1,591,734, net of unamortized debt discount of $515,847.

 

14 DERIVATIVE LIABILITY

 

The convertible notes and warrants issued by the Company to Cavalry, Mercer and RRH as described herein have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time and certain notes and warrants have fundamental transaction clauses which might result in cash settlement, due to these factors, all convertible notes and any warrants attached thereto are valued and give rise to a derivative financial liability, which was initially valued at inception of the convertible notes using a Black-Scholes valuation model.

 

On December 30, 2022, the Company entered into the December 2022 Note Amendment transaction (“the Note Amendment”) as fully described under note 12 above. Included in the derivative liability is: (i) the Original Warrants which were exchanged for non-convertible promissory notes, (ii) the Cavalry and Mercer convertible notes which were subject to the Note Amendment and (ii) the Cavalry and Mercer Extension Warrants as well as certain other warrants due to Cavalry and Mercer and certain other warrant holders. The Note Amendment triggered a repricing of certain of these warrants.

 

The derivative liability on the Cavalry and Mercer convertible notes and the warrants affected by the note amendment were marked-to-market immediately prior to the Note Amendment resulting in a market to market movement on the original warrants, the convertible notes and the extension warrants and certain other warrants, which were subject to a full rachet provision, of $474,614. In addition, the Note and warrant Amendment gave rise to an additional derivative liability charge of $2,317,051 which was recorded as an expense in the loss on convertible notes charge in the statement of operations.

 

On May 10, 2023 and June 13, 2023, the Company entered into convertible note agreements with 1800 Diagonal which have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time, which gave rise to a derivative financial liability, which was initially valued at inception of the convertible notes at $360,491 but limited to the cash value of the convertible notes of $150,000, using a Black-Scholes valuation model. These convertible notes were subsequently settled on August 3, 2023, resulting in the elimination of the derivative liability related to these notes.

 

F-23

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

14 DERIVATIVE LIABILITY (continued)

 
Between September 12, 2023 and December 20, 2023, the Company entered into a convertible note agreement with RRH which have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time, which gave rise to a derivative financial liability, which was initially valued at inception of the convertible notes at $416,317 but limited to the cash value of the convertible notes of $235,000, using a Black-Scholes valuation model.

 

The net movement on the derivative liability for the year ended December 31, 2023 was a net mark-to-market credit of $1,501,446 determined by using a Black-Scholes valuation model.

 

The following assumptions were used in the Black-Scholes valuation model:

 

   Year ended
December 31,
2023		   Year ended
December 31,
2022		 
Conversion price  $ 0.104 to $0.345     $ 0.345 to $4.50   
Risk free interest rate   3.60 to 5.55 %    0.79 to 4.73 %
Expected life of derivative liability   3.5 to 47 months     1.5 to 59 months  
Expected volatility of underlying stock    158.72 to 217.01 %   120.49 to 258.3 %
Expected dividend rate   0%   0%

 

The movement in derivative liability is as follows:

 

   December 31,
2023		   December 31,
2022		 
Opening balance  $2,550,642   $407,161 
Derivative financial liability arising from convertible note and warrants   385,000    238,182 
Derivative financial liability arising on note amendment included in loss on convertible notes   
-
    2,317,051 
Fair value adjustment to derivative liability   (1,501,446)   (411,752)
   $1,434,196   $2,550,642 

 

15 STOCKHOLDERS’ EQUITY

 

  a. Common Stock

 

The Company has total authorized Common Stock of 750,000,000 shares with a par value of $0.0001 each. The Company had 13,819,889 and 12,563,426 shares of Common Stock issued and outstanding as of December 31, 2023 and December 31, 2022, respectively.

 

On July 8, 2022, the Company entered into a consulting agreement with a third-party contractor for a period of twelve months to (i) review the Company’s business plan; (ii) analyze and assess the Company’s revenues, costs, and cash flow; and (iii) introduce the Company to and interface on the Company’s behalf with potential and actual commercial partners.

 

The Company issued 66,667 (2,000,000 pre-split) shares of Common Stock as compensation for the services rendered which were fully earned on the date of issue. These shares were valued at $84,000 at the date of grant. In addition, the contractor will receive a monthly fee of $3,000 for the term of the Agreement, commencing on August 1, 2022.

 

On July 8, 2022, the Company entered into a second consulting agreement with a separate third-party contractor for a period of twelve months to (i) review the Company’s business plan; (ii) analyze and assess the Company’s revenues, costs, and cash flow; and (iii) introduce the Company to and interface on the Company’s behalf with potential and actual commercial partners. The Company issued 66,667 (2,000,000 pre-split) shares of Common Stock as compensation for the services rendered which were fully earned on the date of issue. These shares were valued at $84,000 at the date of grant.

 

On July 11, 2022, the Board approved the issuance of  66,667 (2,000,000 pre-split) restricted shares of Common Stock to Richard Rosenblum, the Company’s President and Chief Financial Officer. These shares were valued at $110,000 at the date of grant.

 

On August 5, 2022, the Board approved the issuance of 100,000 (3,000,000 pre-split) shares of Common Stock to Samad Harake or his designees as compensation for the services rendered which were fully earned on the date of issue., Mr. Harake is the president and control person of Frictionless. These shares were valued at $165,000 at the date of grant.

 

F-24

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

15 STOCKHOLDERS’ EQUITY (continued)

 

  a. Common Stock (continued)

 

On May 19, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 72,464 shares of Common Stock for the conversion of $25,000 of convertible debt, refer Note 13 above.

 

On August 16, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 72,464 shares of Common Stock for the conversion of $25,000 of convertible debt, refer Note 13 above.

 

On August 24, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 173,914 shares of Common Stock for the conversion of $60,000 of interest on convertible debt, refer Note 13 above.

 

On August 30, 2023, the Company effectuated a 1 for 30 reverse stock split, resulting in the issuance of an additional 2,838 shares to existing stockholders due to rounding of existing shareholdings. All share amounts disclosed in the unaudited condensed consolidated financial statements have been adjusted to reflect the Company’s 1 for 30 reverse stock split effectuated on August 30, 2023.

 

On August 31, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 144,928 shares of Common Stock for the conversion of $50,000 of convertible debt, refer note 13 above.

 

On November 8, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 289,855 shares of Common Stock for the conversion of $100,000 of convertible debt, refer note 13 above.

 

On November 20, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 500,000 shares of Common Stock for the conversion of $172,500 of convertible debt, refer note 13 above.

 

  b. Restricted stock awards

 

On December 15, 2020, in terms of an employment agreement entered into with an employee, the Company granted 83,333 (2,500,000 pre-split) restricted shares of which 33,333 (1,000,000 pre-split) vested on January 1, 2021 and the remaining 50,000 (1,500,000 pre-split) shares vest over a period of two years. The 50,000 (1,500,000 pre-split) shares of unvested restricted stock which was not physically issued to the employee were not earned due to the cessation of employment with the Company.

 

A summary of restricted stock activity during the period January 1, 2022 to December 31, 2023 is as follows:

 

   Total
restricted
shares*		   Weighted
average
fair market
value per
share*		   Total
unvested
restricted
shares*		   Weighted
average
fair market
value per
share*		   Total vested
restricted
shares*		   Weighted
average
fair market
value per share*		 
Outstanding January 1, 2022   716,500   $1.47    341,583   $1.47    374,917   $1.47 
Granted and issued   66,667    1.65    -    -    66,667    1.65 
Forfeited/Cancelled   -    -    -    -    -    - 
Vested   -    -    (170,791)   (1.47)   170,791    1.47 
Outstanding December 31, 2022   783,167   $1.50    170,792   $1.47    612,375   $1.50 
Granted and issued   -    -    -    -    -    - 
Forfeited/Cancelled   -    -    -    -    -    - 
Vested   -    -    (170,792)   (1.47)   170,792    1.47 
Outstanding December 31, 2023   783,167   $1.50    -   $-    783,167   $1.50 

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The restricted stock granted, issued and exercisable at December 31, 2023 is as follows:

 

    Restricted Stock
Granted and
Vested		 
Grant date Price   Number
Granted*		   Weighted Average Fair
Value per
Share*		 
$1.47    683,167   $1.47 
$1.50    33,333    1.50 
$1.65    66,667    1.65 
      783,167   $1.50 

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The Company has recorded an expense of $0 and $361,064 for the years ended December 31, 2023 and 2022, respectively. 

 

F-25

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

15 STOCKHOLDERS’ EQUITY (continued)

    

  c. Preferred Stock

 

The Company has authorized 25,000,000 shares of preferred stock with a par value of $0.0001 authorized. No preferred stock was issued and outstanding as of December 31, 2023 and December 31, 2022.

 

  d. Warrants

 

Effective July 8, 2022 (the “Effective Date”), the Company entered into an Endorsement Agreement with Pez-Mar, Inc., a California corporation (“Pez-Mar”), to furnish the services of Mario Lopez (“Lopez”). Pursuant to the Endorsement Agreement, Lopez will act as a Company spokesperson in connection with the promotion, advertisement and endorsement of the Company’s physical and virtual payment processing and money remittance business and the Company’s related products and services.

 

The Endorsement Agreement has a term of two (2) years from the Effective Date (the “Term”), which is subject to earlier termination on customary terms and conditions. The parties have agreed to certain deliverables of Lopez during the term of the agreement, including with respect to social media posts, television commercials, interviews and photo shoots. The Endorsement Agreement also contains other customary terms, covenants and conditions, including representations and warranties, restrictions on endorsements of competitive products during the term of the agreement, confidentiality, indemnification, and Pez-Mar and Lopez’s independent contractor status.

 

As compensation for the services provided under the Endorsement Agreement, Lopez or their designees are entitled to the following payments: (i) a cash endorsement fee of Three Hundred Thousand U.S. Dollars ($300,000 USD), payable as follows: (i) One Hundred Twenty-Five Thousand Dollars ($125,000) upon execution of the Endorsement Agreement, (ii) One Hundred Twenty-Five Thousand Dollars ($125,000) quarterly during the Term, beginning on the 90th day following the Effective Date, and (iii) Fifty Thousand Dollars ($50,000) on or prior to the first anniversary of the Effective Date and (ii) warrants exercisable for an aggregate of Five hundred thousand (500,000) shares of the Common Stock at an exercise price of $1.035 per share. The Warrants shall have a three-year term commencing from the Effective Date. The right to exercise the Warrants shall be subject to vesting during the Term but shall vest in full upon the consummation of a fundamental transaction involving the Company or upon certain termination events provided for in the Endorsement Agreement. The Exercise Price may be payable via “cashless exercise”, unless the underlying Shares are registered under an effective registration statement under the Securities Act of 1933, as amended. The Shares are subject to certain “piggyback” registration rights.

 

On August 30, 2022, the Company extended the maturity date of the Cavalry/Mercer Notes and agreed to grant each note holder a warrant exercisable for 100,000 shares of Common Stock at an exercise price of $4.50 per share with an expiration date of August 30, 2027.

 

On December 30, 2022, the Company issued to Frictionless a 5-year warrant to purchase 1,000,000 shares of Common Stock at an exercise price of $0.345 per share. The fair value of these warrants was $348,938 determined by using a Black-Scholes valuation model, which fair value was capitalized to purchased technology on the date of grant. On May 12, 2023, the Company entered into an agreement to cancel this warrant (see note 1(b)).

 

On December 30, 2022, the Company entered into the December 2022 Note Amendment Transaction, as fully described in note 11 above. In terms of the Note Amendment Transaction the following occurred:

 

  ● The warrants issued to Cavalry and Mercer exercisable for 165,798 shares of Common Stock (82,899 for each of Cavalry and Mercer), were exchanged for two promissory notes of $482,000 each, as disclosed in note 11 above;

 

  ● The warrants issued to Cavalry and Mercer on August 30, 2022, were subject to repricing and a full rachet increase in the number of warrants issued, resulting in an increase in the number of warrants by 2,408,696 (1,204,348 to each Cavalry and Mercer) and a reset of the exercise price to $0.345 per share. The additional warrants were valued at $841,003 using a Black-Scholes valuation model and was expensed in the statement of operations as a component of the loss on convertible debt.

 

  ● An additional 457,895 warrants previously issued to Mercer, Iroquois Master Fund and Bellridge Capital LP were subject to repricing of the exercise price from a range of $1.50 to $4.50 per share to $0.345 per share. The change in the fair value of these warrants of $20,079, using a Black-Scholes valuation model was recorded as a component of the loss on convertible debt.

 

Between February 13, 2023 and November 27, 2023, the Company entered into Securities Purchase Agreements with 30 accredited investors, as disclosed in note 13 above. In terms of these Securities Purchase Agreements, the Company issued five-year warrants to purchase an aggregate 5,696,586 shares of the Common Stock at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The Company is under no obligation to register the shares of Common Stock underlying the 2023 Notes or the 2023 Warrants for public resale.

 

F-26

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

15 STOCKHOLDERS’ EQUITY (continued)

 

  d. Warrants (continued)

 

On August 11, 2023, the company issued an investor a five-year replacement warrant for a warrant that had expired on February 13, 2023 exercisable for 33,334 shares of common stock at an exercise price of $1.50 per share.

 

On December 14, 2023, two notes totaling $225,000 which matured on December 31, 2023 were rolled over for an additional 3 months to March 30, 2024. In exchange for the roll-over, the Company issued the note holders five-year warrants exercisable for 292,463 shares of common stock at an exercise price of $0.345 per share.

 

During the current year warrants exercisable for 33,334 shares expired as unexercised and a further warrants exercisable for 1,000,000 shares of common stock were forfeited on the disposal of frictionless and Beyond Fintech as disclosed in note 4 above.

 

The 2023 Warrants contain conversion limitations providing that a holder thereof may not exercise the Warrants to the extent that, if after giving effect to such exercise, the holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the outstanding shares of the Common Stock immediately after giving effect to such exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice.

 

In connection with the formation of IPSIPay Express, the Company issued to each of the other venture partners, OpenPath and EfinityPay, IPEX Warrants to purchase an aggregate of 133,334 shares of Common Stock with an exercise of $0.45 per share. The Company is obligated to issue each of OpenPath and EfinityPay additional IPEX Warrants to purchase 199,999 shares of Common Stock at a price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the remaining initial Tranche. Simultaneously with the funding of the second Tranche in September 2023, the Company became obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the second Tranche. Simultaneously with the funding of the third Tranche, the Company will issue to each of OpenPath and EfinityPay an additional IPEX warrant to purchase 166,667 shares of common stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the third Tranche. If the full IPSI Capital Contribution is funded, OpenPath and EfinityPay will receive IPEX Warrants to purchase an aggregate of 1,333,334 shares of Common Stock. See note 1(b) above.

 

The fair value of the warrants granted and issued, as described above, were determined by using a Black Scholes valuation model using the following assumptions:

 

   Year ended
December 31,
2023		 
Exercise price  $ 0.345 to 0.45   
Risk free interest rate    3.77 to 4.86 %
Expected life    5 years   
Expected volatility of underlying stock    187.40 to 192.80 %
Expected dividend rate   0%

 

A summary of warrant activity during the period January 1, 2022 to December 31, 2023 is as follows:

 

   Shares
Underlying
Warrants*		   Exercise
price per
share*		   Weighted
average
exercise
price*		 
Outstanding January 1, 2022   1,243,477   $ 1.50 – 5.625     $3.60 
Granted   1,700,000     0.345 – 1.035     0.5478 
Increase in warrants due to debt amendment full rachet trigger   2,408,696    0.345    0.345 
Cancelled on debt amendment   (165,797)   4.50    4.50 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2022   5,186,376   $0.345 – 5.625   $0.9000 
Granted   6,289,051     0.345 – 1.50    0.3556 
Forfeited   (33,334)   1.50    1.5000 
Cancelled on disposal of investment in Frictionless and Beyond Fintech   (1,000,000)   0.345    0.3450 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2023   10,442,093   $0.345 – 5.625    $0.6265 

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

F-27

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

15STOCKHOLDERS’ EQUITY (continued)

 

  d. Warrants (continued)

  

The warrants outstanding and exercisable at December 31, 2023 are as follows:

 

      Warrants Outstanding*     Warrants Exercisable*  
Exercise Price*     Number
Outstanding*		     Weighted
Average
Remaining
Contractual
life in years		     Weighted
Average
Exercise
Price*		     Number
Exercisable*		     Weighted
Average
Exercise
Price*		     Weighted
Average
Remaining
Contractual
life in years		  
$ 0.345       9,055,642       4.16               9,055,642               4.16  
$ 0.450       266,668       4.48               266,668               4.48  
$ 1.035       500,000       1.52               437,500               1.52  
$ 1.500       33,334       4.62               33,334               4.62  
$ 4.50       505,560       2.21               505,560               2.21  
$ 5.625       80,889       2.21               80,889               2.21  
          10,442,093       3.94     $ 0.6265       10,379,593     $ 0.6240       3.95  

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The warrants outstanding have an intrinsic value of $0 and $0 as of December 31, 2023 and 2022, respectively.

 

  e. Stock options

 

On June 18, 2018, the Company established its 2018 Stock Incentive Plan (the “Plan”). The purpose of the Plan is to promote the interests of the Company and the stockholders of the Company by providing directors, officers, employees and consultants of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives. The Plan terminates after a period of ten years in June 2028.

 

The Plan is administered by the Board or a committee appointed by the Board, who have the authority to administer the Plan and to exercise all the powers and authorities specifically granted to it under the Plan.

 

The maximum number of securities available under the Plan is 26,667  shares of Common Stock. The maximum number of shares of Common Stock awarded to any individual during any fiscal year may not exceed 100,000 shares of Common Stock.

 

On October 22, 2021, the Company established its 2021 Stock Incentive Plan (“2021 Plan”). The purpose of the Plan is to promote the interests of the Company and the stockholders of the Company by providing directors, officers, employees and consultants, advisors and service providers of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives. The Plan terminates after a period of ten years in August 2031.

 

The 2021 Plan is administered by the Board or a Compensation Committee appointed by the Board, who have the authority to administer the Plan and to exercise all the powers and authorities specifically granted to it under the Plan.

 

The maximum number of securities available under the 2021 Plan is 1,766,667 shares of Common Stock.

 

Under the 2021 Plan the Company may award the following: (i) non-qualified stock options; (ii)) incentive stock options; (iii) stock appreciation rights; (iv) restricted stock; (v) restricted stock unit; and (vi) other stock-based awards.

  

On July 11, 2022, the Board approved, granted and issued 500,000 ten-year incentive stock options, with immediate vesting, to the Company’s Chairman and Chief Executive Officer at an exercise price of $4.50 per share. This resulted in an immediate expense of $823,854 for the year ended December 31, 2022.

 

On September 13, 2022, the Company granted ten-year options exercisable for 6,667 shares of Common Stock, with immediate vesting, to each of its four non-executive directors, totaling options exercisable for 26,668 shares of Common Stock at an exercise price of $1.20 per share. This resulted in an immediate expense of $31,970 for the year ended December 31, 2022.

 

During the current financial year, the Company cancelled options exercisable for 23,891 (716,666 pre-split) shares of common stock due to the previous resignation or termination of employees and officers whose stock options were not exercised in accordance with the terms allowed under the plan and were therefore canceled.

 

F-28

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

15 STOCKHOLDERS’ EQUITY (continued)

 

e.Stock options (continued)

 

A summary of option activity during the period January 1, 2022 to December 31, 2023 is as follows:

 

   Shares
Underlying
options*		   Exercise
price per
share*		   Weighted
average
exercise
price*		 
Outstanding January 1, 2022   1,017,223   $4.50 to 12.00   $4.50 
Granted   526,668    1.20 – 4.50    4.20 
Forfeited/Cancelled   
-
    
-
    
-
 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2022   1,543,891   $1.20 to 12.00   $4.47 
Granted   
-
    
-
    
-
 
Forfeited/Cancelled   (23,889)  $1.20 to 12.00    5.41 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2023   1,520,002   $1.20 to 12.00   $4.46 

 

*After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The options outstanding and exercisable at December 31, 2023 are as follows:

 

    Options Outstanding*   Options Exercisable* 
Exercise  Price*   Number
Outstanding*		   Weighted
Average
Remaining
Contractual
life in years		   Weighted
Average
Exercise
Price*		   Number
Exercisable*		   Weighted
Average
Exercise
Price*		   Weighted
Average
Remaining
Contractual
life in years		 
$1.20    20,001    5.86         20,001         5.86 
$4.50    1,500,001    7.94         1,388,890         7.96 
      1,520,002    7.91   $4.46    1,408,891   $4.45    7.93 

 

The options outstanding have an intrinsic value of $0 as of December 31, 2023 and 2022.

 

The option expense was $377,856 and $1,233,682 for the years ended December 31, 2023 and 2022, respectively.

 

16LOSS ON CONVERTIBLE NOTES

 

The loss on convertible notes consists of the following:

 

   December 31,
2023		   December 31,
2022		 
Penalty on cash settlement of convertible note  $9,306   $247,063 
Expense on extension of maturity date of convertible notes   64,256    836,414 
Fair value of warrants issued to convertible note holders on extension of maturity date   
-
    238,182 
Fair value of derivative liability arising on the amendment of the exercise price of convertible notes and the full-rachet trigger on certain warrants issued to convertible note holders   
-
    2,360,658 
Value of notes exchanged for certain warrants, net of the derivative liability value of $(43,608)   
-
    920,392 
   $73,562   $4,602,709 

 

Penalty on cash settlement of convertible note

 

On February 4, 2022, the Company cash settled the outstanding balance, including early settlement penalty thereon of $247,063, of a convertible note owing to Bellridge for gross proceeds of $1,235,313.

 

On August 3, 2023, the Company cash settled the outstanding balance of two convertible notes owing to 1800 Diagonal Street Lending LLC, including an early settlement penalty thereon of $9,306.

 

F-29

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

16LOSS ON CONVERTIBLE NOTES (continued)

 

Expense on extension of maturity date of convertible notes

 

On December 14, 2023, the Company extended the maturity date of two convertible notes to March 30, 2024, and issued the note holders additional warrants exercisable for 292,463 shares of common stock, the modification of the terms and the issue of the new warrants was assessed as a debt extinguishment, resulting in a charge of $64,256 for the year ended December 31, 2023.

 

In the prior year, The Company twice extended the maturity date of its indebtedness to each Cavalry and Mercer. On February 3, 2022, the Company agreed to extend the maturity date of the Notes to August 16, 2022. Additionally, on August 30, 2022, the Company entered agreements for an additional maturity date extension to November 16, 2022, in terms of these extensions, the Company incurred penalties which increased the principle outstanding of these convertible notes in the aggregate amount of $836,414.

 

Fair value of warrants issued to convertible note holders on extension of maturity date

 

In addition to the penalty on extension of maturity date on its indebtedness to each of Cavalry and Mercer, in consideration for the second extension on August 30, 2022, the Company agreed to issue to each of Cavalry and Mercer a new five-year warrant to purchase an additional 100,000 (3,000,000 pre-split) shares of common stock at an exercise price of $4.50 ($0.15 pre-split) per share. The fair value of these warrants were determined as $238,182 on August 30, 2022, using a Black-Scholes valuation model.

 

Fair value of derivative liability arising on the amendment of the exercise price of convertible notes and the full-rachet trigger on certain warrants issued to convertible note holders

 

On December 30, 2022, the Company again extended the maturity dates of each of the Notes to Cavalry and Mercer to December 30, 2023. Each of Cavalry and Mercer entered into Note Amendment Letter Agreement with the Company (the “Note Amendment”) pursuant to which the parties agreed that the conversion price of the Notes was reduced from $4.50 ($0.15 pre-split) to $0.345 ($0.0115 pre-split) per share and in addition, resulted in the 100,000 (3,000,000 pre-split) shares of common stock underlying the Extension Warrants increasing to 1,304,348 (39,130,435 pre-split) shares, in terms of the full-rachet provisions in those warrant agreements. The change in the conversion price and the increase in the number of warrant shares to be issued at the revised exercise price of $0.345 ($0.0115 pre-split) per share, resulted in a derivative liability on December 30, 2022 of $2,340,580, determined by using a Black-Scholes valuation model.

 

In addition to this, certain other warrants outstanding had their conversion price reduced from $1.50 ($0.05 pre-split) per share to $0.345 ($0.0115 pre-split) per share in terms of their warrant agreements, resulting in an additional derivative liability on December 30, 2022 of $20,079, determined by using a Black-Scholes valuation model.

 

Value of notes exchanged for certain warrants, net of the derivative liability value of $(43,608)

 

On December 30, 2022, the Company also agreed to exchange the Original Warrants issued on February 16, 2021 to Cavalry and Mercer for 12-month non-convertible promissory notes in the amount of $482,000 each. This resulted in an additional charge of $964,000, less the fair value of the derivative liability of the Original warrants of $43,608, valued on December 30, 2022, using a Black-Scholes valuation model.

 

17INCOME TAXES

 

The Company’s operations are based in the US and currently enacted tax laws in the US are used in the calculation of income taxes.

 

Federal Income Tax - United States

 

On December 22, 2017, the Tax Cuts and Jobs Act (the TCJA), which significantly modified U.S. corporate income tax law, was signed into law by President Trump. The TCJA contains significant changes to corporate income taxation, including but not limited to the reduction of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and generally eliminating net operating loss carrybacks, allowing net operating losses to carryforward without expiration, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including changes to the orphan drug tax credit and changes to the deductibility of research and experimental expenditures that will be effective in the future). Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain, including to what extent various states will conform to the newly enacted federal tax law.

 

F-30

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

17INCOME TAXES (continued)

 

Federal Income Tax - United States (continued)

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, 2022 and 2021, there have been no interest or penalties incurred on income taxes.

 

The provision for income taxes consists of the following:

 

   Year ended
December 31,
2023		   Year ended
December 31, 
2022		 
Current          
Federal  $
         
   $
           
 
State   
-
    
-
 
Foreign   
-
    
-
 
   $
-
   $
-
 
Deferred          
Federal  $
-
   $
-
 
State   
-
    
-
 
Foreign   
-
    
-
 
   $
-
   $
-
 

 

A reconciliation of the U.S. Federal statutory income tax to the effective income tax is as follows:

 

   Year ended
December 31,
2023		   Year ended
December 31,
2022		 
Continuing operations        
Tax expense at the federal statutory rate  $(1,225,845)  $(2,169,599)
State tax expense, net of federal tax effect   (170,564)   (324,289)
Permanent differences   712,951    1,194,446 
Prior year net operating loss true up   (228,714)   (3,277)
    (912,172)   (1,302,719)
Deferred income tax asset valuation allowance   912,172    1,302,719 
   $
-
   $
-
 

 

Significant components of the Company’s deferred income tax assets are as follows:

 

   December 31,
2023		   December 31,
2022		 
Other  $241,491   $241,491 
Capital loss   491,275    - 
Net operating losses   6,900,076    6,479,181 
Stock based compensation   511,142    511,142 
Valuation allowance   (8,143,986)   (7,231,814)
Net deferred income tax assets  $
-
   $
-
 

 

The valuation allowance for deferred income tax assets as of December 31, 2023 and December 31, 2022 was $8,143,986 and $7,231,814, respectively. The net change in the deferred income tax assets valuation allowance was an increase of $912,172 and is primarily attributable to tax operating losses and capital losses realized during the current year.

 

As of December 31, 2023, the prior three years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

 

As of December 31, 2023, the Company had available for income tax purposes approximately $26.8 million in federal and $19.0 million in state net operating loss carry forwards, which may be available to offset future taxable income. $3.5 million of the net operating losses will begin to expire in 2034 and $23.3 million has an indefinite life. Due to the uncertainty of the utilization and recoverability of the loss carryforwards and other deferred tax assets, Management has determined a full valuation allowance for the deferred tax assets since it is more likely than not that the deferred tax assets will not be realizable.

F-31

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

17INCOME TAXES (continued)

 

Federal Income Tax - United States (continued)

 

The Company’s ability to utilize the previous Federal operating loss carryforwards may be adjusted if, pursuant to IRC Section 382/383 of the Internal Revenue Code of 1986, as amended, a change of ownership occurs. Management does not believe an ownership change has occurred under IRC Section 382/383. A future change in ownership may result in an adjustment to the loss carryforward.

 

The Company is subject to taxation in the U.S. and CA state. U.S. federal income tax returns for 2019 and after, remain open to examination. No income tax returns are currently under examination. As of December 31, 2023 and 2022, the Company does not have any unrecognized tax benefits, and continues to monitor its current and prior tax positions for any changes. The Company recognizes penalties and interest related to unrecognized tax benefits as income tax expense. For the years ended December 31, 2023 and 2022, there were no penalties or interest recorded in income tax expense. 

 

18EQUITY BASED COMPENSATION

 

Equity based compensation is made up of the following:

 

   Year ended
December 31,
2023		   Year ended
December 31,
2022		 
Incentive stock awards  $377,856   $1,594,746 
Securities issued for services rendered   144,828    333,000 
   $522,684   $1,927,746 

 

19NET LOSS PER SHARE

 

Basic loss per share is based on the weighted-average number of common shares outstanding during each period. Diluted loss per share is based on basic shares as determined above plus common stock equivalents. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share. For the years ended December 31, 2023 and 2022 all warrants options and convertible debt securities were excluded from the computation of diluted net loss per share.

 

Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive for the years ended December 31, 2023 and 2022 are as follows:

 

   Year ended
December 31, 
2023
(Shares)		   Year ended
December 31, 
2022
(Shares)		 
Convertible debt   13,363,993    6,569,863 
Stock options   1,520,002    1,543,891 
Warrants to purchase shares of common stock   10,442,093    5,186,375 
    25,326,088    13,300,129 

 

20RELATED PARTY TRANSACTIONS

 

The following transactions were entered into with related parties:

 

James Fuller

 

On September 13, 2022, the Company granted Mr. Fuller ten-year options exercisable for 6,667 shares of Common Stock at an exercise price of $1.20 per share.

 

The option expense for Mr. Fuller was $0 and $7,993 for the years ended December 31, 2023 and 2022, respectively.

 

Mr. Fuller voluntarily resigned as a member of the Board of Directors effective as of our 2022 annual meeting of shareholders which occurred on November 3, 2022.

 

William Corbett

 

On July 11, 2022, the Company granted Mr. Corbett ten-year options exercisable for 500,000 shares of Common Stock at an exercise price of $4.50 per share.

 

F-32

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

20RELATED PARTY TRANSACTIONS (continued)

 

William Corbett (continued)

 

On June 21, 2023, Mr. Corbett advanced the company $50,000 to cover certain working capital expenses, the advance is short term in nature, bears no interest and has no fixed repayment terms. This advance was repaid on December 4, 2023.

 

The option expense for Mr. Corbett was $266,346 and $1,090,201 for the years ended December 31, 2023 and 2022, respectively.

 

Clifford Henry

 

Mr. Henry has an oral consulting arrangement with the Company whereby he is paid $3,500 per month for financial and capital markets advice. This consulting agreement commenced in May, 2021 and was approved and ratified by the Board in March 2022. This consulting agreement and related payments were terminated in September 2022.

 

On September 13, 2022, the Company granted Mr. Henry, immediately vesting, ten-year options exercisable for 6,667 shares of Common Stock at an exercise price of $1.20 per share, valued at $7,993 using a Black Scholes valuation model.

 

The option expense for Mr. Henry was $0 and $7,993 for the years ended December 31, 2023 and 2022, respectively.

 

Mr. Henry voluntary elected not to stand for re-election at the company’s annual general meeting, his tenure as a director ended on the date of the annual general meeting, November 30, 2023.

 

Madisson Butler

 

On September 13, 2022, the Company granted Ms. Butler (formerly known as Madisson Corbett), immediately vesting, ten-year options exercisable for 6,667 shares of Common Stock at an exercise price of $1.20 per share, valued at $7,993 using a Black Scholes valuation model.

  

The option expense for Ms. Butler was $0 and $7,993 for the years ended December 31, 2023 and 2022, respectively.

 

David Rios

 

On September 13, 2022, the Company granted Mr. Rios, immediately vesting, ten-year options exercisable for 6,667 shares of Common Stock at an exercise price of $1.20 per share, valued at $7,993 using a Black Scholes valuation model.

 

The option expense for Mr. Rios was $0 and $7,993 for the years ended December 31, 2023 and 2022, respectively.

 

Richard Rosenblum

 

On July 11, 2022, the Company granted Mr. Rosenblum 66,667 restricted shares of Common Stock valued at $110,000, all of which are vested.

 

The option expense for Mr. Rosenblum was $111,510 for each of the years ended December 31, 2023 and 2022, respectively.

 

21COMMITMENTS AND CONTINGENCIES

 

The Company has notes payable and convertible notes payable, disclosed under notes 12 and 13 above, which originally matured between December 30, 2023 and September 14, 2024, of which the notes that had maturity dates between December 30, 2023 and February 23, 2024 have been extended to dates between April 30, 2024 and August 23, 2024. The Company may settle the notes payable, at its option by the issue of common shares and should the convertible notes not be converted to Common Stock prior to their maturity dates, the Company may need to repay the principal and interest outstanding on these notes.

 

22SUBSEQUENT EVENTS

 

Convertible note funding

  

Between February 6 and February 21, 2024, the Company entered into Securities Purchase Agreements pursuant to which the Company issued convertible promissory notes to four accredited investment entities for total gross proceeds of $308,335. The Notes are unsecured, mature 12 months from issuance date and bear interest at a rate of 8% per annum, and are convertible into shares of common stock of the Company at a conversion price of $0.345 per share (as adjusted for stock splits, stock combinations, and similar events). The Notes may be prepaid at any time without penalty. The Note contains customary events of default. The Company is under no obligation to register the shares of Common Stock underlying the Notes for public resale.

F-33

 

 

INNOVATIVE PAYMENT SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

22 SUBSEQUENT EVENTS (continued)

  

Convertible note funding (continued)

 

On March 4, 2024, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued a convertible promissory note and a warrant exercisable for shares of common stock to an accredited investor. The Company realized gross proceeds of $100,000 after an original issue discount of $14,286 and a once off interest charge of $9,143. The note matures on September 4, 2024. Principal and interest payments are due in four equal instalments of $30,871 commencing on May 3, 2024. The note is convertible into common stock at a fixed price of $0.345 per share, unless the note is in default, whereby the conversion price will be 70% of the lowest closing bid price for the 5 trading days prior to conversion. The note may be prepaid at any time for the full outstanding principal and outstanding interest.

  

Non-Binding Letter of Intent with Business Warrior

  

Overview and Cautionary Statement

  

On February 13, 2024, the Company signed an amended and restated non-binding letter of intent (the “LOI”) with Business Warrior Corporation, a Wyoming corporation (“BZWR”), pursuant to which the Company would acquire BZWR on the general terms described below (the “Proposed Transaction”).

  

Neither IPSI nor BZWR shall have any legal obligation of any kind with respect to the Proposed Transaction unless and until binding definitive agreements with respect to the Proposed Transaction are executed. Moreover, the Proposed Transaction, assuming definitive agreements are even executed, would be subject to the approval of the stockholders of both IPSI and BZWR and the satisfaction of other conditions to closing.

  

BZWR is a publicly listed, revenue generating fintech company that offers PayPlan, a comprehensive lending software platform that includes marketing services for lenders and businesses. The Company believes that a potential combination with a fintech company that generates some revenue monthly would complement the development and commercial launch of the Company’s IPSIPay ExpressTM products and potentially other product offerings.

  

In addition, the Company and BZWR have certain convertible note investors (the “Note Holders”) in common. Therefore, one purpose of the Proposed Transaction would be to convert the indebtedness of both the Company and BZWR held by the Note Holders into equity securities of the Company.

  

Outline of Proposed Terms

  

The principal terms of the Proposed Transaction are as follows:

  

1.Preliminary Structure. At the closing of the Proposed Transaction (the “Closing”), the Company would acquire 100% of the outstanding equity and equity equivalents of BZWR (including outstanding warrants and other securities that have the right to acquire or convert into equity securities of BZWR) on a cash-free, debt free basis by way of a merger of BZWR into a new subsidiary of the Company.

  

  2.

Consideration. The total consideration provided to or for the benefit of BZWR equity holders (including holders of warrants and other outstanding preferred stock or other convertible securities of BZWR), as applicable (the “Transaction Consideration”) would be in the form of newly-issued shares (the “Transaction Shares”) of Company common stock representing forty percent (40%) of the Common Stock immediately following the Closing.

  

  3. Note Exchange Transaction; Replacement Preferred. Prior to and as a condition to the Closing, the Note Holders of both IPSI and BZWR shall effect a note exchange transaction pursuant to which all of the outstanding convertible notes of IPSI and BZWR held by the Note Holders will be cancelled and exchanged for shares of newly-issued Series A Convertible Preferred Stock of IPSI (“Replacement Preferred”). The terms of the Replacement Preferred will be negotiated with the Note Holders.

  

  4. BZWR Capitalization Restructure. Prior to the Closing, BZWR shall cause all of its outstanding shares of preferred stock and warrants to be converted into shares of BZWR common stock, net exercised or cancelled, with the effect that only shares of BZWR common stock would be outstanding a Closing, the holders of which would be entitled to receive the Transaction Consideration.

  

  5. Board of Directors. The post-Closing Board of Directors of IPSI shall consist of a number of individuals to be agreed upon by IPSI and BZWR, provided that (i) the majority of the post-Closing Board of Directors will be appointed by IPSI and (ii) the majority of the post-Closing Board of Directors will be “independent” as defined under Nasdaq Stock Market rules.

  

Company Loan to BZWR

 

On February 12, 2024, and in connection with the LOI and the Proposed Transaction, the Company (utilizing a portion of the proceeds from the issuance of convertible Notes) loaned funds to BZWR in the principal amount of $226,190, which includes an original issue discount equal to $67,857, netting BZWR proceeds $158,333. The loan is memorialized by a secured promissory note (the “BZWR Note”). The BZWR Note does not accrued interest, except in the case of an event of default, which case interest accrues at 15% per annum. The BZWR Note matures on the earlier to occur of December 31, 2025 and the date that BZWR’s securities are listed on a national securities exchange. The BZWR Note may be prepaid at any time for an amount equal to 110% of the then principal and accrued interest. IPSI shall have the right to exchange the BZWR Note for securities issued by BZWR in any subsequent private placement by BZWR. The principal and accrued interest under BZWR Note is convertible into common stock of BZWR at a price equal to $0.0036 per share, subject to certain adjustments and potential resets. BZWR’s obligations under the BZWR Note are guaranteed by BZWR’s subsidiaries and secured by a lien on BZWR’s accounts receivable. The BZWR Note is one of several similar notes issued by BZWR. Keystone Capital Partners LLC is acting as collateral agent for the holders of such notes, include IPSI as the holder of the BZWR Note.

F-34

 

 

PART IV

 

Item 15. Exhibits and Financial Statement Schedules and Reports on Form 10-K

 

The following documents are filed as part of this amended report:

 

(a)(1)Financial Statements

 

For a list of the financial statements included herein, see Index to the Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K/A, incorporated into this Item by reference.

 

(a)(2)Financial Statement Schedules

 

None.

 

(a)(3)  The following exhibits are either filed as part of this Annual Report on Form 10-K/A:

 

EXHIBIT INDEX

 

Exhibit No.   Description 
31.1*   Certification of William Corbett, Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a)
31.2*   Certification of Richard Rosenblum, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a)
32.1*   Certification of William Corbett, Chief Executive Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002
32.2*   Certification of Richard Rosenblum, Chief Financial pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002
101.INS*   Inline XBRL Instance Document
101.SCH*   Inline XBRL Taxonomy Extension Schema Document
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Inline Cover Page Interaction Data File (embedded within the Inline XBLR document)

 

* Filed herewith.

 

1

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K/A (Amendment No. 1) to be signed on its behalf by the undersigned.

 

  Innovative Payment Solutions, Inc.
     
Date: April 17, 2024 By: /s/ William Corbett
    William Corbett
    Chief Executive Officer and Chairman
     
Date: April 17, 2024 By: /s/ Richard Rosenblum
    Richard Rosenblum
    Chief Financial Officer, President and Director

 

 

2

 

 

 

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Exhibit 31.1

 

CERTIFICATION PURSUANT TO RULE 13a-14 OR RULE

15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, William Corbett, certify that:

 

1.I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of Innovative Payment Solutions, Inc:

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and.

 

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: April 17, 2024 /s/ William Corbett
  William Corbett
  Chief Executive Officer
  (Principal Executive Officer)

 

Exhibit 31.2

 

CERTIFICATION PURSUANT TO RULE 13a-14 OR RULE

15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Richard Rosenblum, certify that:

 

1.I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of Innovative Payment Solutions, Inc.:

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and.

 

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: April 17, 2024 /s/ Richard Rosenblum
  Richard Rosenblum
  President and Chief Financial Officer
  (Principal Financial and Accounting Officer)

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of Innovative Payment Solutions, Inc. (the “Registrant”) on Form 10-K/A for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William Corbett, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section. 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Date: April 17, 2024 By: /s/ William Corbett
    William Corbett
    Chief Executive Officer
    (Principal Executive Officer)

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of Innovative Payment Solutions, Inc. (the “Registrant”) on Form 10-K/A for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard Rosenblum, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section. 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Date: April 17, 2024 By: /s/ Richard Rosenblum
    Richard Rosenblum
    President and Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

v3.24.1.u1
Document And Entity Information - USD ($)
 12 Months Ended
Dec. 31, 2023
Apr. 16, 2024
Jun. 30, 2023
Document Information Line Items      
Entity Registrant Name INNOVATIVE PAYMENT SOLUTIONS, INC.    
Document Type 10-K/A    
Current Fiscal Year End Date --12-31    
Entity Common Stock, Shares Outstanding   13,819,889  
Entity Public Float     $ 4,628,228
Amendment Flag true    
Amendment Description This Amendment No. 1 on Form 10-K/A (“Amendment No. 1”) to the Annual Report on Form 10-K of Innovative Payment Solutions, Inc. (the “Company”) for the fiscal year ended December 31, 2023, originally filed with the Securities and Exchange Commission (“SEC”) on March 29, 2024 (the “Original Filing”), is being filed solely to correct a typographical error as to the signing date of the Report of Independent Registered Public Accounting Firm contained therein, which read March 29, 2023 instead of March 29, 2024.This Amendment No. 1 includes: Item 8 of Part II, “Financial Statements and Supplementary Data” in its entirety and without change from the Original Filing other than the correction of the signing date of the Report of Independent Registered Public Accounting Firm.In addition, pursuant to the rules of the SEC, the exhibit list included herein reflects currently-dated certifications from the Company’s principal executive officer and principal accounting officer, which are filed as exhibits to this Amendment No. 1.Except for the foregoing amended information, this Amendment No. 1 does not amend or update any other information contained in the Original Filing, or reflect any events that have occurred after the filing date of the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing.    
Entity Central Index Key 0001591913    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Filer Category Non-accelerated Filer    
Entity Well-known Seasoned Issuer No    
Document Period End Date Dec. 31, 2023    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Entity Small Business true    
Entity Emerging Growth Company false    
Entity Shell Company false    
ICFR Auditor Attestation Flag false    
Document Annual Report true    
Document Transition Report false    
Entity File Number 000-55648    
Entity Incorporation, State or Country Code NV    
Entity Tax Identification Number 33-1230229    
Entity Address, Address Line One 56B 5th Street    
Entity Address, Address Line Two Lot 1, #AT    
Entity Address, City or Town Carmel by the Sea    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 93921    
City Area Code (866)    
Local Phone Number 477-4729    
Title of 12(g) Security Common Stock, $0.0001 par value.    
Entity Interactive Data Current Yes    
Document Financial Statement Error Correction [Flag] false    
Documents Incorporated by Reference [Text Block] None    
Auditor Name RBSM LLP    
Auditor Firm ID 587    
Auditor Location New York, NY    
No Trading Symbol Flag true    
v3.24.1.u1
Consolidated Balance Sheets - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Current Assets    
Cash $ 50,433 $ 373,822
Other current assets 38,818 97,042
Assets held for sale 807,263
Total Current Assets 89,251 1,278,127
Non-current assets    
Plant and equipment 7,027 40,362
Intangible assets 1,401,491
Security deposit 5,000 32,592
Equity method investment 703,938
Total Non-Current Assets 715,965 1,474,445
Total Assets 805,216 2,752,572
Current Liabilities    
Accounts payable 2,023,375 727,922
Liabilities held for sale 33,810
Federal relief loans – current portion 9,369
Notes payable 1,062,007 964,268
Convertible debt, net of unamortized discount of $687,503 and $263,200, respectively 3,704,280 2,266,602
Derivative liability 1,434,196 2,550,642
Total Current Liabilities 8,233,227 6,543,244
Non-Current Liabilities    
Federal relief loans 150,000 163,978
Total Non-Current Liabilities 150,000 163,978
Total Liabilities 8,383,227 6,707,222
Equity (Deficit)    
Preferred stock, $0.0001 par value, 25,000,000 shares authorized, and 0 shares issued and outstanding as of December 31, 2023 and December 31, 2022.
Common stock, $0.0001 par value; 750,000,000 shares authorized, 13,819,889 and 12,563,426 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively. [1] 1,382 1,256
Additional paid-in-capital [1] 50,656,225 48,442,355
Accumulated deficit (58,235,618) (52,399,858)
Total equity (deficit) attributable to Innovative Payment Solutions, Inc. Stockholders (7,578,011) (3,956,247)
Non-controlling interest 1,597
Total Equity (Deficit) (7,578,011) (3,954,650)
Total Liabilities and Equity (Deficit) $ 805,216 $ 2,752,572
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Consolidated Balance Sheets (Parentheticals) - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Convertible debt, net of unamortized discount (in Dollars) $ 687,503 $ 263,200
Preferred stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized 25,000,000 25,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in Dollars per share) [1] $ 0.0001 $ 0.0001
Common stock, shares authorized [1] 750,000,000 750,000,000
Common stock, shares issued [1] 13,819,889 12,563,426
Common stock, shares outstanding [1] 13,819,889 12,563,426
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Consolidated Statements of Operations - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Statement [Abstract]    
Net Revenue $ 410 $ 847
Cost of Goods Sold 3,547 5,052
Gross loss (3,137) (4,205)
General and administrative 3,576,352 5,452,579
Depreciation 380,634 132,394
Total Expense 3,956,986 5,584,973
Loss from Operations (3,960,123) (5,589,178)
Investment impairment charge (1)
Loss on debt conversion (90,761)
Loss on convertible notes (73,562) (4,602,709)
Loss on novation (1,066,165)
Fair value of warrants issued (14,176)
Interest expense, net (424,117) (199,788)
Amortization of debt discount (770,372) (263,200)
Derivative liability movements 1,501,446 411,752
Loss before income taxes (4,897,830) (10,243,124)
Income taxes
Net loss after income taxes (4,897,830) (10,243,124)
Net loss from equity method investments (403,282)
Net loss from continuing operations (5,301,112) (10,243,124)
Discontinued operations    
Operating loss from discontinued operations (40,821) (88,300)
Loss on disposal of subsidiary and investment (495,424)
Net loss from discontinued operations (536,245) (88,300)
Net loss (5,837,357) (10,331,424)
Net loss attributable to non-controlling interest 1,597 43,267
Net loss attributable Innovative Payment Solutions, Inc. Stockholders’ $ (5,835,760) $ (10,288,157)
Basic and diluted loss per share*    
Continuing operations (in Dollars per share) [1] $ (0.41) $ (0.83)
Discontinued operations (in Dollars per share) [1] (0.04) 0
Basic and diluted loss per share total (in Dollars per share) $ (0.45) $ (0.83)
Weighted Average Number of Shares Outstanding – Basic (in Shares) 12,844,609 12,406,677
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Consolidated Statements of Operations (Parentheticals) - $ / shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Statement [Abstract]    
Continuing operations diluted [1] $ (0.41) $ (0.83)
Discontinued operations diluted [1] (0.04) 0.00
Diluted loss per share $ (0.45) $ (0.83)
Weighted Average Number of Shares Outstanding – Diluted (in Shares) 12,844,609 12,406,677
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) - USD ($)
Preferred Stock
Common Stock
Additional Paid-in Capital
 [1]
Accumulated Deficit
Non-controlling shareholders interest
Total
Balance at Dec. 31, 2021 $ 1,226 [1] $ 45,806,576 $ (42,111,701) $ 35,211 $ 3,731,312
Balance (in Shares) at Dec. 31, 2021 12,263,426 [1]        
Fair value of warrants issued for services [1] 708,063 708,063
Shares issued for services $ 23 [1] 332,977 333,000
Shares issued for services (in Shares) [1]   233,333        
Stock based option expense [1] 1,233,682 1,233,682
Restricted stock awards $ 7 [1] 361,057 361,064
Restricted stock awards (in Shares) [1]   66,667        
Proceeds from non-controlling shareholders [1] 9,653 9,653
Net loss [1] (10,288,157) (43,267) (10,331,424)
Balance at Dec. 31, 2022 $ 1,256 [1] 48,442,355 (52,399,858) 1,597 (3,954,650)
Balance (in Shares) at Dec. 31, 2022 12,563,426 [1]        
Conversion of convertible debt $ 126 [1] 523,135 523,261
Conversion of convertible debt (in Shares) [1]   1,253,625        
Additional shares issued on reverse stock split [1]  
Additional shares issued on reverse stock split (in Shares) [1]   2,838        
Fair value of warrants issued for services [1] 159,004 159,004
Fair value of warrants issued to convertible debt holders [1] 1,045,655 1,045,655
Stock based compensation [1] 377,856 377,856
Fair value of warrants issued for equity method investments [1] 108,220 108,220
Net loss [1] (5,835,760) (1,597) (5,837,357)
Balance at Dec. 31, 2023 $ 1,382 [1] $ 50,656,225 $ (58,235,618) $ (7,578,011)
Balance (in Shares) at Dec. 31, 2023 13,819,889 [1]        
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Consolidated Statements of Cash Flows - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (5,837,357) $ (10,331,424)
Net loss from discontinued operations 536,245 88,300
Net loss from continuing operations (5,301,112) (10,243,124)
Adjustment to reconcile net loss to net cash used in operating activities:    
Derivative liability movements (1,501,446) (411,752)
Depreciation 380,634 132,394
Amortization of debt discount 770,372 263,200
Loss on novation 1,066,165
Investment impairment charge 1
Loss on conversion of debt to equity 90,761
Loss on convertible notes 73,562 4,602,709
Fair value of warrants issued for services 159,004 359,125
Unrealized loss on equity method investments 403,282
Shares issued for services 333,000
Stock based compensation 377,856 1,594,746
Changes in Assets and Liabilities    
Other current assets 58,224 (12,008)
Accounts payable and accrued expenses 1,577,888 288,018
Interest accruals 392,714 111,528
Cash used in operating activities - continuing operations (1,452,096) (2,982,163)
Cash generated by operating activities - discontinued operations 35,287 (79,790)
CASH USED IN OPERATING ACTIVITIES (1,416,809) (3,061,953)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Investment in equity method investment (999,000)
Intangibles acquired (44,405) (778,462)
Investment in deposits (12,792)
Deposits refunded 14,800
Plant and equipment purchased (43,049)
Net cash used in investing activities – continuing operations (1,028,605) (834,303)
Net cash used in investing activities – discontinued operations (36,230) (41,320)
NET CASH USED IN INVESTING ACTIVITIES (1,064,835) (875,623)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from short term notes and convertible notes 2,461,666
Repayment of convertible notes (304,354) (1,147,063)
Proceeds from non-controlling shareholders 9,653
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 2,157,312 (1,137,410)
NET DECREASE IN CASH (324,332) (5,074,986)
CASH AT BEGINNING OF YEAR 374,765 5,449,751
CASH AT END OF YEAR 50,433 374,765
RECONCILIATION OF OPENING CASH WITHIN THE BALANCE SHEET TO THE STATEMENT OF CASH FLOWS    
Cash 373,822 5,367,551
Cash included in assets held for resale 943 82,200
CASH AT BEGINNING OF THE YEAR 374,765 5,449,751
RECONCILIATION OF CLOSING CASH WITHIN THE BALANCE SHEET TO THE STATEMENT OF CASH FLOWS    
Cash 50,433 373,822
Cash included in assets held for resale 943
CASH AT END OF THE YEAR 50,433 374,765
CASH PAID FOR INTEREST AND TAXES:    
Cash paid for income taxes
Cash paid for interest (31,403) 88,260
NON-CASH INVESTING AND FINANCING ACTIVITIES    
Warrants issued for software development 348,938
Fair value of warrants issued with convertible notes 1,045,655
Conversion of convertible debt to equity 432,500
Fair value of warrants issued for equity method investments $ 108,220
v3.24.1.u1
Organization and Description of Business
 12 Months Ended
Dec. 31, 2023
Organization and Description of Business [Abstract]  
ORGANIZATION AND DESCRIPTION OF BUSINESS
1 ORGANIZATION AND DESCRIPTION OF BUSINESS

 

  a) Organization

 

On May 12, 2016, Innovative Payment Solutions, Inc., a Nevada corporation (“IPSI” or the “Company”) (originally formed on September 23, 2013 under the name “Asiya Pearls, Inc.”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Qpagos Corporation, a Delaware corporation (“Qpagos Corporation”), and Qpagos Merge, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”). Pursuant to the Merger Agreement, on May 12, 2016, the merger was consummated, and Qpagos Corporation and Merger Sub merged (the “Merger”), with Qpagos Corporation continuing as the surviving corporation of the Merger. On May 27, 2016, the Company’s name was changed from “Asiya Pearls, Inc.” to “QPAGOS”.

 

Pursuant to the Merger Agreement, upon consummation of the Merger, each share of Qpagos Corporation’s capital stock issued and outstanding immediately prior to the Merger was converted into the right to receive two shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). Additionally, pursuant to the Merger Agreement, upon consummation of the Merger, the Company assumed all of Qpagos Corporation’s warrants issued and outstanding immediately prior to the Merger, which were exercisable for an aggregate of approximately 621,920 shares of Common Stock as of the date of the Merger. Prior to and as a condition to the closing of the Merger, a then-current holder of 500,000 shares of Common Stock agreed to return 497,500 shares of Common Stock held by such holder to the Company and such holder retained an aggregate of 2,500 shares of Common Stock. The other then stockholders of the Company retained 500,000 shares of Common Stock. Therefore, immediately following the Merger, Qpagos Corporation’s former stockholders held 4,992,900 shares of Common Stock which represented approximately 91% of the outstanding Common Stock.

 

The Merger was treated as a reverse acquisition of the Company, then a public shell company, for financial accounting and reporting purposes. As such, Qpagos Corporation was treated as the acquirer for accounting and financial reporting purposes while the Company was treated as the acquired entity for accounting and financial reporting purposes.

 

Qpagos Corporation was incorporated on May 1, 2015 under the laws of the state of Delaware to effectuate a reverse merger transaction with Qpagos, S.A.P.I. de C.V. (“Qpagos Mexico”) and Redpag Electrónicos S.A.P.I. de C.V. (“Redpag”). Each of the entities were incorporated in November 2013 in Mexico. Qpagos Mexico was formed to process payment transactions for service providers it contracts with, and Redpag was formed to deploy and operate kiosks as a distributor. 

 

On June 1, 2016, the board of directors of the Company (the “Board”) changed the Company’s fiscal year end from October 31 to December 31.

 

On November 1, 2019, the Company changed its corporate name from “QPAGOS” to “Innovative Payment Solutions, Inc.” Additionally, and immediately following the name change, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada to effect a reverse split of the then outstanding Common Stock at a ratio of 1-for-10, effective on November 1, 2019 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each ten pre-split shares of Common Stock outstanding automatically combined into one new share of Common Stock without any further action on the part of the holders, and the number of outstanding shares of Common Stock was reduced from 320,477,867 shares to 32,047,817 after rounding for fractional shares.

 

On December 31, 2019, the Company consummated the disposal of Qpagos Corporation, Qpagos Mexico and Redpag in exchange for 2,250,000 shares (the “Vivi Shares”) of common stock of Vivi Holdings, Inc. (“Vivi. or “Vivi Holdings”) pursuant to a Stock Purchase Agreement dated August 5, 2019 (the “SPA”). Of the 2,250,000 shares of Vivi, nine percent (9%) was allocated as follows: Gaston Pereira (5%), Andrey Novikov (2.5%), and Joseph Abrams (1.5%). The transactions contemplated by the SPA closed on December 31, 2019 after the satisfaction of customary conditions, the receipt of a final fairness opinion and the approval of the Company’s shareholders. As a result, the Company no longer has any business operations in Mexico and has retained its U.S. operations, currently based in Carmel By The Sea, California.

 

  b) Description of current business

 

The Company is currently a fintech provider of digital payment solutions presently focused on, through its participation in IPSIPay Express (as defined below), developing a new account-to-account payment application called Instant Settlement in RealTime as well as traditional credit card processing services. The Company has in the past (under the name IPSIPay) and may in the future develop and operate “e-wallets” that enable consumers to deposit cash, convert it into a digital form and remit funds quickly and securely.

 

IPSIPay Express

 

On April 28, 2023, the Company formed a new company called IPSIPay Express LLC (“IPSIPay Express”). This entity was formed as a Delaware limited liability company joint venture with OpenPath, Inc. (“OpenPath”) and EfinityPay, LLC (“EfinityPay”, and the Company, collectively with OpenPath and EfinityPay, the “Members”) to develop and market a proprietary consumer to merchant real-time payment platform initially focused on the fast-growing online gaming and entertainment sectors.

 

On June 19, 2023, the Company entered into a Limited Liability Company Operating Agreement (the “Operating Agreement”) with OpenPath and EfinityPay to jointly provide for the governance of and rights of the Members with respect to IPSIPay Express. The effective date of the Operating Agreement is April 28, 2023.

 

IPSIPay Express was formed by the Members with the initial business purposes of providing credit card processing solutions and also a proprietary solution for real time bank-to-bank payment transactions in a manner that provides seamless and frictionless consumer and merchant experiences, with an initial focus on merchants operating in gaming and entertainment sectors. Such solutions are collectively referred to herein as “IPEX.”

 

Pursuant to the Operating Agreement, the Company agreed to contribute cash to or on behalf IPSIPay Express to be used for the IPEX business in the aggregate amount of up to $1,500,000 (the “IPSI Capital Contribution”). The Company is required to make the IPSIPay Capital Contribution in three tranches of $500,000 (each, a “Tranche”), or such lesser amounts as may be unanimously approved by the Board of Managers of IPSIPay Express. With the full funding of each Tranche, the Company will automatically receive an 11.11% membership interest in IPSIPay Express (or a pro rata portion thereof if less than a full Tranche is funded), and OpenPath and EfinityPay’s percentage interest in IPSIPay Express will be reduced pro rata accordingly. Should the Company contribute the full IPSI Capital Contribution, the Members will each own one-third (1/3) of the membership interests in IPSIPay Express. The IPSI Capital Contribution has been or will be made by the following dates and in the following amounts: (i) $200,000 of the initial Tranche was paid by the Company on June 21, 2023; (ii) the $300,000 balance of the initial Tranche was paid on August 4, 2023; (iii) the second $500,000 Tranche was paid in September 2023 and (iv) the third $500,000 Tranche was expected to be paid on or before November 30, 2023, subsequently, the Company’s management made a decision not to advance the third tranche to IPSIPay Express as the joint venture is not operational as yet. The need for any additional advances will be addressed with the joint venture partners once the joint venture becomes operational and begins generating revenue, our current shareholding in the joint venture remains at 22%.

 

Simultaneously with the funding of the initial Tranche, the Company issued to each of OpenPath and EfinityPay a five-year common stock purchase warrant (the “IPEX Warrant”) to purchase 133,334 shares of Common Stock with an exercise price of $0.45 per share. We are still obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 199,999 shares of common stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the initial Tranche. Simultaneously with the funding of the second Tranche, we are obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the second Tranche. Should we decide to fund a third Tranche, we will be obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the third Tranche. If the full IPSI Capital Contribution is funded, OpenPath and EfinityPay will receive IPEX Warrants to purchase an aggregate of 1,333,334 shares of Common Stock.

 

Frictionless Financial Technologies

 

On June 21, 2021. the Company acquired a 10% strategic interest in Frictionless Financial Technologies, Inc. (“Frictionless”). Frictionless agreed to deliver to the Company, a live fully compliant financial payment Software as a Service solution for use by the Company as a digital payment platform (which was subsequently branded as IPSIPay) that enables payments within the United States and abroad, including Mexico, together with a service agreement providing a full suite of product services to facilitate the Company’s anticipated product offerings. The Company had an irrevocable right to acquire up to an additional 41% of the outstanding common stock of Frictionless at a purchase price of $300,000 for each 1% acquired.

 

On August 26, 2021, the Company formed a new subsidiary, Beyond Fintech, Inc. (“Beyond Fintech”), in which it owns a 51% stake, with Frictionless owning the remaining 49%. Beyond Fintech acquired an exclusive license to a product known as Beyond Wallet, to further its objective of providing virtual payment services allowing U.S. persons to transfer funds to Mexico and other countries.

 

On May 12, 2023, the Company entered into an Agreement with Frictionless (the “May 2023 Frictionless Agreement”) to unwind the equity ownership stakes that the Company and Frictionless have in each other and in Beyond Fintech. Pursuant to the May 2023 Frictionless Agreement: (i) the Company assigned to Frictionless all common stock of Frictionless owned by the Company; (ii) the warrant to purchase 1,000,000 (30,000,000 pre-split) shares of Common Stock previously issued by the Company to Frictionless as of December 30, 2022 was cancelled; (iii) the Company assigned to Frictionless all shares of common stock of Beyond Fintech owned by the Company (the “Beyond Fintech Shares”); and (iv) the rights previously granted to the Company to (a) acquire additional equity interests in Frictionless, (b) participate in future financings of Frictionless and (c) appoint a board member of Frictionless, were terminated. The consideration to the Company for the assignment of the Beyond Fintech Shares to Frictionless was a credit against potential future services to be provided by Frictionless to the Company in an amount up to $250,000. As a result of the novation agreement with Frictionless discussed below (see note 5), the Company no longer utilizes, and does not expect to utilize, the services of Frictionless for the foreseeable future. The collectability of the remaining credit receivable of $231,431 has been impaired.

 

On September 5, 2023, the Company’s entered into a novation agreement whereby it assigned all its rights and interest in its e-wallet product, IPSIPay, and its receivables and payables due from and to Frictionless, related to IPSIPay, to a third party in order to concentrate all of its efforts on the IPSIPay Express joint venture. See note 5 for further information.
v3.24.1.u1
Accounting Policies and Estimates
 12 Months Ended
Dec. 31, 2023
Accounting Policies and Estimates [Abstract]  
ACCOUNTING POLICIES AND ESTIMATES
2 ACCOUNTING POLICIES AND ESTIMATES

 

  a) Basis of Presentation

 

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

 

All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

 

  b) Principles of Consolidation

 

The consolidated financial statements as of December 31, 2023, include the financial statements of the Company and its subsidiary, Beyond Fintech, in which it had a majority voting interest, until May 12, 2023, the date of disposal. Pursuant to the May 2023 Frictionless Agreement, the Company disposed of its 51% interest in Beyond Fintech. Therefore, as of May 12, 2023 the Company has no subsidiaries. See note 4 for further information.

 

All significant inter-company accounts and transactions have been eliminated in the consolidated financial statements.

 

  c) Use of Estimates

 

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which are evaluated on an ongoing basis, that affect the amounts reported in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to, the estimated useful lives for plant and equipment, the fair value of long-lived investments, the fair value of warrants and stock options granted for services or compensation, convertible notes and amendments thereto, derivative liabilities, the valuation allowance for deferred tax assets due to continuing operating losses and the allowance for doubtful accounts.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

 

  d) Contingencies

 

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

 

The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

 

  e) Fair Value of Financial Instruments

 

The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

 

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

 

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

 

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

 

The carrying amounts reported in the balance sheets for cash, accounts receivable, other current assets, other assets, accounts payable, accrued liabilities, and notes payable, approximate fair value due to the relatively short period to maturity for these instruments. The Company has identified the short-term convertible notes and certain warrants attached to certain of the notes that are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.

 

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We evaluate the fair value of variably priced derivative liabilities on a quarterly basis and report any movements thereon in earnings.

 

  f) Risks and Uncertainties

 

The Company’s operations are and will be subject to significant risks and uncertainties including financial, operational, regulatory, and other risks, including the potential risk of business failure. The recent war in Ukraine and the global inflationary environment which has resulted in significant interest rate increases in the U.S and abroad has resulted in a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, and extreme volatility in credit, equity and fixed income markets. These conditions may not only limit the Company’s access to capital, but also make it difficult for its customers, vendors and the Company to accurately forecast and plan future business activities, which may have an adverse impact on its business and financial condition and may hamper the Company’s ability to generate revenue and access usual sources of liquidity on reasonable terms.

 

The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

 

  g) Recent accounting pronouncements

 

The Financial Accounting Standards Board (“FASB”) issued additional updates during the year ended December 31, 2023. None of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the Company’s consolidated financial statements upon adoption.

 

  h) Reporting by Segment

 

No segmental information is required as the Company has only one operating segment.

 

  i) Cash and Cash Equivalents

 

The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. At December 31, 2023 and 2022, respectively, the Company had no cash equivalents.

 

The Company minimizes credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution in the United States. The balance at times may exceed federally insured limits. At December 31, 2023 and 2022, the balance exceeds the federally insured limit by $0 and $120,580, respectively.

 

  j) Accounts Receivable and Allowance for Doubtful Accounts

 

Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Revisions to the allowance for doubtful accounts estimates are recorded as an adjustment to bad debt expense. Receivables deemed uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written-off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. There were no recoveries during the period ended December 31, 2023 and 2022.

 

  k) Investments

 

The Company’s non-marketable equity securities are investments in privately held companies without readily determinable market values. The carrying value of our non-marketable equity securities is adjusted to fair value for observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative). All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. Non-marketable equity securities that have been remeasured during the period are classified within Level 3 in the fair value hierarchy because the Company estimates the value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities the Company holds. The cost method is used when the Company has a passive, long-term investment that doesn’t result in influence over the Company. The cost method is used when the investment results in an ownership stake of less than 20%, and there is no substantial influence. Under the cost method, the stock purchased is recorded on a balance sheet as a non-current asset at the historical acquisition/purchase price, and is not modified unless shares are sold, additional shares are purchased or there is evidence of the fair market value of the investment declining below carrying value. Any dividends received are recorded as income.

 

The Company recorded an impairment charge of $0 and $1 on its non-marketable equity securities for the years ended December 31, 2023 and 2022, respectively. The impairment charge was based on management’s determination that due to the lack of ability, to date, by Vivi Holdings (“Vivi”) to fulfill its capital raising requirements and implement its business strategy that there is a significant risk that Vivi may not be able to meet its obligations. 

 

  l) Plant and Equipment

 

Plant and equipment is stated at cost, less accumulated depreciation. Plant and equipment with costs greater than $1,000 are capitalized and depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:

 

Description   Estimated Useful Life
     
Kiosks   7 years
     
Computer equipment   3 years
     
Leasehold improvements   Lesser of estimated useful life or life of lease
     
Office equipment   10 years

 

The cost of repairs and maintenance is expensed as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition.

 

  m) Long-Term Assets

 

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

 

  n) Revenue Recognition

 

The Company’s revenue recognition policy is consistent with the requirements of FASB ASC 606, Revenue.

 

The Company’s revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services, as defined below. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions:

 

  i. identify the contract with a customer;

 

  ii. identify the performance obligations in the contract;

 

  iii. determine the transaction price;

 

  iv. allocate the transaction price to performance obligations in the contract; and

 

  v. recognize revenue as the performance obligation is satisfied.

 

The Company had minimal revenues of $410 and $847 during the years ended December 31, 2023 and 2022, respectively. 

 

  o) Share-Based Payment Arrangements

 

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments is recorded in operating expenses in the consolidated statement of operations.

 

Prior to the Company’s reverse merger which took place on May 12, 2016, all share-based payments were based on management’s estimate of market value of the Company’s equity. The factors considered in determining managements estimate of market value includes, assumptions of future revenues, expected cash flows, market acceptability of our technology and the current market conditions. These assumptions are complex and highly subjective, compounded by the business being in its early stage of development in a new market with limited data available.

 

Where equity transactions with arms-length third parties, who had applied their own assumptions and estimates in determining the market value of our equity, had taken place prior to and within a reasonable time frame of any share-based payments, the value of those share transactions have been used as the fair value for any share-based equity payments.

 

Where equity transactions with arms-length third parties, included both shares and warrants, the value of the warrants have been eliminated from the unit price of the securities using a Black-Scholes valuation model to determine the value of the warrants. The assumptions used in the Black Scholes valuation model includes market related interest rates for risk-free government issued treasury securities with similar maturities; the expected volatility of the Company’s common stock based on companies operating in similar industries and markets; the estimated stock price of the Company; the expected dividend yield of the Company and; the expected life of the warrants being valued.

 

Subsequent to the Company’s reverse merger which took place on May 12, 2016, the Company has utilized the market value of its common stock as quoted on the OTCQB, as an indicator of the fair value of its common stock in determining share- based payment arrangements.

 

  p) Derivative Liabilities

 

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

 

  q) Income Taxes

 

The Company is based in the US and currently enacted US tax laws are used in the calculation of income taxes.

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, 2023 and December 31, 2022, there have been no interest or penalties incurred on income taxes.

 

  r) Comprehensive income

 

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. The Company does not have any comprehensive income (loss) for the periods presented.

 

  s) Reclassification of prior year presentation

 

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.
v3.24.1.u1
Liquidity Matters and Going Concern
 12 Months Ended
Dec. 31, 2023
Liquidity Matters and Going Concern [Abstract]  
LIQUIDITY MATTERS AND GOING CONCERN
3 LIQUIDITY MATTERS AND GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. For and as of the year ended December 31, 2023, the Company had a net loss of $5,837,357. In connection with preparing the consolidated financial statements for the year ended December 31, 2023, management evaluated the risks described in Note 2(f) above on the Company’s business and its future liquidity for the next twelve months from the date of issuance of these financial statements.

 

The accompanying financial statements for the period ended December 31, 2023 have been prepared assuming the Company will continue as a going concern, but the ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, and reduce the scope of the Company’s development and operations. Continuing as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The Company has determined that there is substantial doubt about their ability to continue as a going concern.
v3.24.1.u1
Disposal of Investment in Frictionless and Beyond Fintech
 12 Months Ended
Dec. 31, 2023
Disposal of Investment in Frictionless and Beyond Fintech [Abstract]  
DISPOSAL OF INVESTMENT IN FRICTIONLESS AND BEYOND FINTECH
4 DISPOSAL OF INVESTMENT IN FRICTIONLESS AND BEYOND FINTECH

 

On May 12, 2023, the Company entered into the May 2023 Frictionless Agreement to unwind the equity ownership stakes that the Company and Frictionless have in each other and in Beyond Fintech. Pursuant to the May 2023 Frictionless Agreement: (i) the Company assigned to Frictionless all common stock of Frictionless owned by the Company (representing a 10% ownership interest in Frictionless); (ii) the warrant to purchase 1,000,000 shares of Common Stock previously issued by the Company to Frictionless as of December 30, 2022 was cancelled; (iii) the Company assigned to Frictionless all shares of common stock of Beyond Fintech owned by the Company (representing a 51% ownership interest in Beyond Fintech) (the “Beyond Fintech Shares”); and (iv) the rights previously granted to the Company to (a) acquire additional equity interests in Frictionless, (b) participate in future financings of Frictionless and (c) appoint a board member of Frictionless were terminated. The consideration to the Company for the assignment of the Beyond Fintech Shares to Frictionless is $250,000, which will be paid by Frictionless exclusively in the form of 20% credits against invoices for work done by Frictionless for the Company for the 18-mobnth period following the closing under the existing software services between the Company and Frictionless. The May 2023 Frictionless Agreement has customary representations, indemnification and mutual release provisions. The closing of the transactions contemplated by the May 2023 Frictionless Agreement occurred on May 12, 2023.

 

The assets and liabilities disposed of as of May 12, 2023 were as follows:

 

   Amount 
Assets    
     
Current Assets    
Cash  $339 
      
Non-current assets     
Intangible assets   327,211 
Security deposit   15,000 
Investment   500,000 
    842,211 
Total assets   842,550 
      
Liabilities     
      
Current Liabilities     
Accounts payable   97,126 
      
Net assets sold   745,424 
Proceeds due on disposal   (250,000)
Net loss on disposal  $495,424 
v3.24.1.u1
Novation of Certain Assets and Liabilites
 12 Months Ended
Dec. 31, 2023
Novation of Certain Assets and Liabilites [Abstract]  
NOVATION OF CERTAIN ASSETS AND LIABILITES
5 NOVATION  OF CERTAIN ASSETS AND LIABILITES

 

On September 5, 2023, the Company entered into a novation agreement with a third party whereby the third party assumed all of the Company’s debts, clients, and services and assumes all the rights and responsibilities of the Company under the SAAS Cloud Hosted Services Enablement Master Services Agreement, dated September 9, 2021 (the “SAAS Agreement”), including the information technology, supplier access, billing and rating technology, mobile wallet, debit card enablement, back-office support services, customer service, and consulting services related to the Company’s IPSIPay mobile application.

 

Pursuant to the novation agreement, Frictionless released the Company from all its obligations, debts, and liabilities under the SAAS Agreement as of September 5, 2023 and consented to the third party assuming these obligations. Each party agreed to indemnify the other party harmless for any damages, claims or expenses incurred by the other party.

 

The novation agreement also provided the third party a 30-day transition period in which the Company assisted the third party in transferring all the assets and obligations, including existing customers and wallets to the third party, thereafter the third party will no longer be permitted to operate the IPSIPay app under the brand name “IPSIPay”.

 

The assets and liabilities novated under the agreement as of September 5, 2023, were as follows:

 

   Amount 
Assets    
     
Current Assets    
Receivable on sale of subsidiary  $231,431 
      
Non-current assets     
Intangible assets   1,098,598 
Total assets   1,330,029 
      
Current Liabilities     
Accounts payable   263,864 
      
Net loss on novation  $1,066,165 
v3.24.1.u1
Discontinued Operations
 12 Months Ended
Dec. 31, 2023
Discontinued Operations [Abstract]  
DISCONTINUED OPERATIONS
6 DISCONTINUED OPERATIONS

 

Effective May 12, 2023, the Company disposed of its investment in Beyond Fintech pursuant to the May 2023 Frictionless Agreement, as disclosed in note 4 above.

 

The following assets and liabilities are reported as discontinued operations:

 

   December 31, 
   2022 
Current assets    
Cash  $943 
Non-current assets     
Intangibles, net   291,320 
Investment   500,000 
Security deposit   15,000 
Assets held for sale  $807,263 
      
Current liabilities     
Accounts payable  $33,810 
Liabilities held for sale  $33,810 

 

The statement of operations from discontinued operations is as follows:

 

   Year ended December 31, 
   2023   2022 
         
Net Revenue  $
-
   $
-
 
           
Cost of Goods Sold   
-
    
-
 
           
Gross loss   
-
    
-
 
           
General and administrative   40,821    88,300 
Depreciation and amortization   
-
    
-
 
Total Expense   40,821    88,300 
           
Loss from operations before income taxes   (40,821)   (88,300)
           
Income Taxes   
-
    
-
 
Loss from discontinued operations, net of taxation  $(40,821)  $(88,300)
v3.24.1.u1
Intangibles
 12 Months Ended
Dec. 31, 2023
Intangibles [Abstract]  
INTANGIBLES
7 INTANGIBLES

 

On August 26, 2021, the Company formed Beyond Fintech to acquire a product known as Beyond Wallet from a third party for gross proceeds of $250,000, together with the logo, use of name and implementation of the product into the Company’s technology. The Company owned 51% of Beyond Fintech with the other 49% owned by Frictionless. During the year ended December 31, 2022 and the nine months ended September 30, 2023, an additional $41,320 and $35,891, respectively, was spent on the software to further enhance the Beyond Wallet product offering.  On May 12, 2023, Beyond Fintech was sold to Frictionless (see note 4 above).

 

During the year ended December 31, 2021, the Company paid gross proceeds of $375,000 to Frictionless for the development of the IPSIPay wallet, and during the year ended December 31, 2022 and the nine months ended September 30, 2023, an additional $1,127,400 and $44,405, respectively, was incurred by the Company to facilitate the functioning of the IPSIPay software in the cloud environment. On September 5, 2023, the Company novated all its rights and obligations to its IPSIPay wallet to a third party (see note 5 above).

 

   December 31,
2023		   December 31,
2022		 
   Cost   Accumulated
amortization		   Net Book
Value		   Net book
value		 
Purchased Technology - IPSIPay  $
-
   $
-
   $
-
   $1,401,491 

 

Amortization expense was $347,298 and $100,909 for the years ended December 31, 2023 and 2022, respectively.
v3.24.1.u1
Equity Method Investment
 12 Months Ended
Dec. 31, 2023
Equity Method Investment [Abstract]  
EQUITY METHOD INVESTMENT
8 EQUITY METHOD INVESTMENT

 

On April 28, 2023, the Company formed IPSIPay Express with OpenPath and EFinityPay (see note 1(b) above). As described in note 1(b), the Company has agreed to make the IPSI Capital Contributions to IPSIPay Express. As of December 31, 2023, the initial Tranche of $500,000 and the second Tranche of $500,000 of capital contributions was paid by the Company to or on behalf of IPSIPay Express.

 

The Company accounts for its investment in IPSIPay Express in accordance with ASC 323, Investments – Equity Method and Joint Ventures, the movement in equity method investments related to IPSIPay Express for the period ended December 31, 2023 is as follow:

 

   December 31,
2023		 
Cash contribution to IPSIPay Express  $999,000 
Fair value of warrants issued to third party joint venture partners   108,220 
    1,107,220 
Equity loss from joint venture   (403,282)
   $703,938 
v3.24.1.u1
Investments
 12 Months Ended
Dec. 31, 2023
Investments [Abstract]  
INVESTMENTS
9 INVESTMENTS

 

Investment in Frictionless Financial Technologies Inc.

 

On May 12, 2023, the Company assigned to Frictionless all common stock of Frictionless owned by the Company (representing a 10% ownership interest in Frictionless). refer Note 4 above.
v3.24.1.u1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
LEASES
10 LEASES

 

On March 22, 2021, the Company entered into a real property lease for an office located at 56B 5th Street, Lot 1, #AT, Carmel By The Sea, California. The lease commenced on April 1, 2021 and is for a twelve-month period, terminating on April 1, 2022. Following the expiry of the lease term, the landlord has agreed to continue the lease on a month-to-month basis at $4,800 per month. On January 1, 2023, the Company entered into a new month-to-month lease, with a 90-day termination clause, for a monthly rental of $5,088. The lease was terminated effective August 31, 2023.

 

The Company applied the practical expedient whereby operating leases with a duration of twelve months or less are expensed as incurred.

 

Total Lease Cost

 

Individual components of the total lease cost incurred by the Company is as follows:

 

   Year ended December 31,
2023		   Year ended December 31,
2022		 
Operating lease expense  $40,704   $57,600 

 

Other lease information:

 

   Year ended December 31,
2023		   Year ended December 31,
2022		 
Cash paid for amounts included in the measurement of lease liabilities        
Operating cash flows from operating leases  $(40,704)  $(57,600)
           
Remaining lease term – operating lease   -    Monthly 
v3.24.1.u1
Federal Relief Loans
 12 Months Ended
Dec. 31, 2023
Federal Relief Loans [Abstract]  
FEDERAL RELIEF LOANS
11 FEDERAL RELIEF LOANS

 

Small Business Administration Disaster Relief loan

 

On July 7, 2020, the Company received a Small Business Economic Injury Disaster loan amounting to $150,000, bearing interest at 3.75% per annum and repayable in monthly installments of $731 commencing twelve months after inception with the balance of interest and principal repayable on July 7, 2050. The loan is secured by all tangible and intangible assets of the Company. The proceeds are to be used for working capital purposes to alleviate economic injury caused by the COVID-19 pandemic.

 

The company has accrued interest of $9,369 and $13,978 on this loan as of December 31, 2023 and 2022, respectively.
v3.24.1.u1
Notes Payable
 12 Months Ended
Dec. 31, 2023
Notes Payable [Abstract]  
NOTES PAYABLE
12 NOTES PAYABLE

 

On February 16, 2021, the Company entered into separate Securities Purchase Agreements (the “SPAs”), with each of Cavalry Fund I LP (“Cavalry”) and Mercer Street Global Opportunity Fund, LLC (“Mercer”), pursuant to which the Company received $500,500 and $500,500 from Cavalry and Mercer, respectively, in exchange for the issuance of: (i) Original Issue Discount 12.5% Convertible Notes (the “Notes” and each a “Note”) in the principal amount of $572,000 to each of Cavalry and Mercer; and (ii) five-year warrants (the “Original Warrants”) issued to each of Cavalry and Mercer to purchase 2,486,957 shares of the Company’s common stock at an exercise price of $0.24 per share.

 

In terms of the December 30, 2022 Note Amendment Transaction, described in more detail in Note 9 below, the Original Warrants issued on February 16, 2021 were irrevocably exchanged for 12-month non-convertible promissory notes in the amount of $482,000 (the “Exchange Notes”) to each of Cavalry and Mercer. This exchange caused the cancellation of the Original Warrants for all purposes. The Company accounted for the aggregate value of the notes issued of $964,000, less the fair value of the warrants exchanged for these notes of $43,608, totaling $920,392 as a component of the loss on convertible debt.

 

The Exchange Notes have a maturity date of December 30, 2023 and carry an interest rate of ten percent (10%). The Company shall have the right, but not the obligation, in lieu of a cash payment upon maturity of the Exchange Notes, to issue 51,901,711 shares of common stock, as adjusted for any stock splits, dividends or other similar corporate events, in full satisfaction of its obligations under each of the Exchange Notes (or any pro rata portion of such number of shares in partial satisfaction of such obligations). The Company is under no legal obligation to reserve such number of shares for future issuance.

 

Subsequent to year end, the maturity date of the notes was extended to April 30, 2024, all other terms remain the same as the previous notes. The Company will perform an analysis to determine whether the amendment meets the definition of a debt extinguishment or modification in terms of ASC 470.

 

Notes payable consists of the following:

 

Description  Interest
Rate		   Maturity
date		  Principal   Accrued
Interest		   December 31, Amount, net  

December 31,
2022
Amount,

net

 
Cavalry Fund I LP   10%  April 30, 2024   482,000    49,004    531,004    482,134 
Mercer Street Global Opportunity Fund, LLC   10%  April 30, 2024   482,000    49,003    531,003    482,134 
Total convertible notes payable          $964,000   $98,007   $1,062,007   $964,268 

    

Interest expense totaled $97,739 and $268 for the year ended December 31, 2023 and 2022, respectively.
v3.24.1.u1
Convertible Notes Payable
 12 Months Ended
Dec. 31, 2023
Convertible Notes Payable [Abstract]  
CONVERTIBLE NOTES PAYABLE
13 CONVERTIBLE NOTES PAYABLE

 

December 2022 Note Amendment Transaction

 

The Company twice extended its indebtedness to each Cavalry and Mercer. On February 3, 2022, the Company agreed to extend the maturity date of the Cavalry/Mercer Notes to August 16, 2022. Additionally, on August 30, 2022, the Company entered agreements for an additional maturity date extension to November 16, 2022. In consideration for the second extension, the Company agreed to (i) increase the principal amount outstanding and due to Cavalry and Mercer under the Cavalry/Mercer Notes by twenty percent (20%) and (ii) issue to each of Cavalry and Mercer a new five-year warrant (each, an “Extension Warrant”) to purchase an additional 100,000 (3,000,000 pre-split) shares of Common Stock at an exercise price of $4.50 ($0.15 pre-split) per share. The Extension Warrant contains the same terms and provisions in all material respects as the Original Warrants, except for difference in exercise price.

 

On December 30, 2022, the Company again extended the maturity dates of each of the Cavalry/Mercer Notes to December 30, 2023. Each of Cavalry and Mercer entered into Note Amendment Letter Agreement with the Company (the “Note Amendment”) pursuant to which the parties agreed to the following:

 

  (1) The conversion price of the Cavalry/Mercer Notes was reduced from $4.50 ($0.15 pre-split) to $0.345 ($0.0115 pre-split) per share (such reduced conversion price being the current conversion price of the Notes give the passage of the November 16, 2022 maturity date of the Cavalry/Mercer Notes). As a result of this change in conversion price, under the existing terms of the Cavalry/Mercer Notes, the 100,000 (3,000,000 pre-split) shares of Common Stock underlying the Extension Warrants was increased to 1,304,348 (39,130,435 pre-split) shares;

 

  (2) The Original Warrants issued on February 16, 2021 were irrevocably exchanged for 12-month non-convertible promissory notes in the amount of $482,000 (the “Exchange Notes”). This exchange caused the cancellation of the Original Warrants for all purposes. The Exchange Notes have a maturity date of December 30, 2023 and carry an interest rate of ten percent (10%). The Company shall have the right, but not the obligation, in lieu of a cash payment upon maturity of the Exchange Notes, to issue 1,730,057 shares of Common Stock, as adjusted for any stock splits, dividends or other similar corporate events, in full satisfaction of its obligations under each of the Exchange Notes (or any pro rata portion of such number of shares in partial satisfaction of such obligations). The Company is under no legal obligation to reserve such number of shares for future issuance;

 

  (3) Each of Cavalry and Mercer agreed (i) not to convert all or any portion of the Cavalry/Mercer Notes until after March 30, 2023 and (ii) waive any events of default under the Cavalry/Mercer Notes and the Cavalry/Mercer SPAs;

 

  (4) Certain other warrants held by Cavalry and Mercer which contain a mandatory exercise provision allowing us to force exercise of such warrants if the price of the Common Stock is $1.80 ($0.06 pre-split) per share or above were amended effective December 30, 2022 to reduce such forced exercise price to $1.20 ($0.04 pre-split) per share; and

 

  (5) The Company was obligated to register the shares of Common Stock underlying the Cavalry/Mercer Notes and the shares underlying all warrants held by Cavalry and Mercer for resale with the Securities and Exchange Commission and the Company filed the registration statement to satisfy such registration obligation.

 

The parties also acknowledged that the principal and accrued interest under the Cavalry/Mercer Notes as of December 28, 2022 is equal to an aggregate of $2,264,784, or $1,132,392 for each of Cavalry and Mercer. In addition, as a result of the reduction in the conversion price of the Cavalry/Mercer Notes, certain other warrants held by third parties have their exercise price of such warrants reduced to $0.345 ($0.0115 pre-split) per share. All of the shares of our Common Stock underlying the Cavalry/Mercer Notes as amended and all warrants held by Cavalry and Mercer as adjusted were registered for resale pursuant to a registration statement that was declared effective on February 6, 2023.

 

The amendments to the Cavalry/Mercer Notes were evaluated in terms of ASC 470, Debt, to determine if the amendments to the Cavalry/Mercer Notes were considered a modification of the debt or an extinguishment of the debt. Based on the penalty interest incurred on the convertible notes of $836,414, the reduction in the conversion price of the Cavalry/Mercer Notes from $4.50 ($0.15 pre-split) to $0.345 ($0.0115 pre-split) per share, which was valued at $1,499,577 using a Black-Scholes valuation model, the issuance of additional warrants to the Cavalry and Mercer valued at $238,182 using a Black-Scholes valuation model and the conversion of certain warrants held by Cavalry and Mercer to notes payable, resulting in an additional charge of $920,392, consisting of a mark-to-market warrant cost of $(43,608) and the value of the notes of $964,000 (see note 11 above) and the value of full rachet provisions of certain of the warrants issued to the Cavalry and Mercer amounting to $841,003 (see note 14 below), the amendment of the Cavalry/Mercer Notes was determined to be a debt extinguishment.

 

Effective December 30, 2023 on February 27, 2024, the Company again extended the maturity dates of each of the Cavalry/Mercer Notes to April 30, 2024, other than the maturity date all other terms remained the same. The Company will perform an analysis to determine whether the amendment meets the definition of a debt extinguishment or modification in terms of ASC 470.

 

Convertible notes payable consists of the following:

 

Description   Interest
Rate		     Maturity
date		   Principal     Accrued
Interest		     Unamortized
debt discount		     December 31,
2023
Amount,
net		     December  31,
2022
Amount,
net		  
Cavalry Fund I LP     10.00 %   April 30, 2024     898,980       10,238       -       909,218       1,133,301  
                                                     
Mercer Street Global 
Opportunity Fund, LLC		     10.00 %   April 30, 2024     991,754       148,010       -       1,139,764       1,133,301  
                                                     
Red Road Holdings Corporation     29.32 *%   June 15, 2024     101,679       1,393       (61,301 )     41,771       -  
      27.77 *%   July 30 2024     66,606       1,622       (49,545 )     18,683       -  
      32.04 *%   September 30, 2024     63,250       668       (60,809 )     3,109       -  
                                                     
2023 convertible notes      8.00 to 12.00 %   December 31, 2023 to September 14, 2024     2,026,666       80,916       (515,847 )     1,591,735       -  
                                                     
Total convertible notes payable               $ 4,148,935     $ 242,847     $ (687,502 )   $ 3,704,280     $ 2,266,602  

 

*The red Road Holdings Corporation interest rate is an effective interest rate as these convertible notes have a fixed interest charge which is earned on the issuance date, regardless of when payments are made.

 

Interest expense totaled $319,543 and $193,886 for the years ended December 31, 2023 and 2022, respectively.

 

Amortization of debt discount totaled $770,372 and $263,200  for the years ended December 31, 2023 and 2022, respectively.

 

The Cavalry, Mercer and Red Road Holdings convertible notes have variable conversion prices based on a discount to market price of trading activity over a specified period of time. The variable conversion features were valued using a Black Scholes valuation model. The difference between the fair market value of the Common Stock and the calculated conversion price on the issuance date was recorded as a debt discount with a corresponding credit to derivative financial liability.

 

Cavalry Fund LLP

 

On February 16, 2021, the Company closed a transaction with Cavalry pursuant to which the Company received net proceeds of $500,500, after an original issue discount of $71,500 in exchange for the issuance of a $572,000 Senior Secured Convertible Note, bearing interest at 10% per annum and maturing on February 16, 2022. The Note was convertible into shares of Common Stock at an initial conversion price of $0.23 per share, in addition, the Company issued a warrant exercisable for 82,899 shares of Common Stock at an initial exercise price of $7.20 per share.

 

As described more fully above, the maturity date of the note was extended to August 16, 2022, additionally to November 16, 2022 and again to December 30, 2023. In consideration for the November 16, 2022 extension, the Company agreed to (i) increase the principal amount outstanding and due to Cavalry by twenty percent (20%) and (ii) issue a new five-year warrant to purchase an additional 100,000 shares of Common Stock at an exercise price of $4.50 per share. In consideration of the December 30, 2022 extension, the Company agreed to the following terms; (i) the conversion price of the Note was reduced from $4.50 to $0.345 per share; (ii) Cavalry agreed (a) not to convert all or any portion of the Notes until after March 30, 2023 and (b) waive any events of default under the Note and the SPA; (iii) the Company agreed to and registered the shares of Common Stock underlying the Note and the shares underlying all warrants held by Cavalry for resale with the Securities and Exchange Commission and filed the registration statement to satisfy the Company’s registration obligation.  

 

Between August 24, 2023 and November 20, 2023, Cavalry converted $139,726 of interest and $192,774 of interest into 963,769 shares of Common Stock at a conversion price of $0.345 per share realizing a loss on conversion of $42,210.

 

The balance of the Cavalry Note plus accrued interest at December 31, 2023 was $909,218.

 

Mercer Street Global Opportunity Fund, LLC

 

On February 16, 2021, the Company closed a transaction with Mercer, pursuant to which the Company received net proceeds of $500,500, after an original issue discount of $71,500 in exchange for the issuance of a $572,000 Senior Secured Convertible Note, bearing interest at 10% per annum and maturing on February 16, 2022. The Note is convertible into shares of Common Stock at an initial conversion price of $6.90 per share, in addition, the Company issued a warrant exercisable for 82,899 shares of Common Stock at an initial exercise price of $7.20 per share.

 

As described more fully above, the maturity date of the note was extended to August 16, 2022, additionally to November 16, 2022 and again to December 30, 2023. In consideration for the November 16, 2022 extension, the Company agreed to (i) increase the principal amount outstanding and due to Mercer by twenty percent (20%) and (ii) issue a new five-year warrant to purchase an additional 100,000 shares of Common Stock at an exercise price of $4.50 per share. In consideration of the December 30, 2022 extension, the Company agreed to the following terms; (i) the conversion price of the Note was reduced from $4.50 to $0.345 per share; (ii) Mercer agreed (a) not to convert all or any portion of the Notes until after March 30, 2023 and (b) waive any events of default under the Note and the SPA; (iii) the Company agreed to and registered the shares of Common Stock underlying the Note and the shares underlying all warrants held by Mercer for resale with the Securities and Exchange Commission and filed the registration statement to satisfy the Company’s registration obligation.

 

Between May 19, 2023 and August 30, 2023, Mercer converted an aggregate of $100,000 into 289,856 shares of common stock at a conversion price of $0.345 per share, realizing a loss on conversion of $48,551.

 

On February 27, 2024, Cavalry entered into a note amendment with the company extending the maturity date of the convertible note to April 30, 2024.

 

The balance of the Mercer Note plus accrued interest at December 31, 2023 was $1,139,764.

 

Quick Capital, LLC

 

On June 20, 2023, the Company closed a transaction with Quick Capital, LLC pursuant to which the Company received net proceeds of $50,000, after an original issue discount and fees of $12,857 in exchange for the issuance of a $62,857 Convertible Note, bearing interest at 8% per annum, which interest is earned on issuance of the note, and maturing on December 20, 2023. The Note is convertible into shares of Common Stock at an initial conversion price of $0.345 per share, in addition, the Company issued a warrant exercisable for 182,194 shares of Common Stock at an initial exercise price of $0.345 per share.

 

On December 20, 2023, the Company settled the outstanding principal of $62,857 and interest thereon of $2,514, of the Quick Capital note, thereby extinguishing the debt.

 

1800 Diagonal Street Lending LLC

 

●On May 10, 2023, the Company closed a transaction with 1800 Diagonal Street Lending LLC (“1800 Diagonal”) pursuant to which the Company received net proceeds of $100,000, after an original issue discount and fees of $17,320 in exchange for the issuance of a $117,320 Convertible Note (the “May 1800 Diagonal Note”), bearing interest at 13% per annum, which interest is earned on issuance of the note, and maturing on May 10, 2024. The May 1800 Diagonal Note was convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion.

 

  ●

On June 13 2023, the Company closed a transaction with 1800 Diagonal, pursuant to which the Company received net proceeds of $50,000, after an original issue discount and fees of $12,700 in exchange for the issuance of a $62,700 Convertible Note (the “June 1800 Diagonal Note”), bearing interest at 17.33% per annum, which interest is earned on issuance of the note, and maturing on March 13, 2024. The June 1800 Diagonal Note was convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion. 

 

On August 3, 2023, the Company settled in full, the outstanding convertible notes owing to 1800 Diagonal, for $194,386, including the principal amount of $180,020, early settlement penalty of $9,306 and interest thereon of $5,060.

 

Red Road Holdings Corporation

 

  ●

On September 9, 2023, the Company closed a transaction with Red Road Holdings Corporation (“RRH”) pursuant to which the Company received net proceeds of $125,000, after an original issue discount and fees of $21,900 in exchange for the issuance of a $146,900 Convertible Note (“RRH Note 1”), bearing interest at 13%, which interest is earned on issuance of the note, an effective interest rate of 29.3%, and maturing on June 15, 2024. The RRH Note 1 has mandatory monthly repayments of $18,444 which commenced on October 14, 2023. The RRH Note 1 is convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion.

 

The balance of the RRH Note 1 plus accrued interest at December 31, 2023 was $41,772, net of unamortized debt discount of $61,301.

     
  ●

On October 19, 2023, the Company closed a transaction with RRH pursuant to which the Company received net proceeds of $60,000, after an original issue discount and fees of $13,450 in exchange for the issuance of a $73,450 Convertible Note (“RRH Note 2”), bearing interest at 13%, which interest is earned on issuance of the note, an effective interest rate of 27.8%, and maturing on July 30, 2024. The RRH Note 2 has mandatory monthly repayments of $9,222 which commenced on November 30, 2023. The RRH Note 2 is convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion.

 

The balance of the RRH Note 2 plus accrued interest at December 31, 2023 was $18,683, net of unamortized debt discount of $49,545.

     
  ●

On December 20, 2023, the Company closed a transaction with RRH pursuant to which the Company received net proceeds of $50,000, after an original issue discount and fees of $13,250 in exchange for the issuance of a $63,250 Convertible Note (“RRH Note 3”), bearing interest at 15%, which interest is earned on issuance of the note, an effective interest rate of 32.0%, and maturing on September 30, 2024. The RRH Note 3 has mandatory monthly repayments of $8,082. The RRH Note 3 is convertible into shares of Common Stock at a variable conversion rate of 60% of the lowest trading price twenty trading days before conversion.

 

The balance of the RRH Note 3 plus accrued interest at December 31, 2023 was $3,109, net of unamortized debt discount of $60,809.

 

2023 Convertible Notes

 

Between February 13, 2023 and November 27, 2023, the Company entered into Securities Purchase Agreements with 30 accredited investors, pursuant to which the Company received an aggregate of $2,026,666 in gross proceeds in a private placement through the issuance of:

 

  ● Convertible Promissory Notes (the “2023 Notes” and each a “2023 Note”); and

 

  ● five-year warrants (the “2023 Warrants”) to purchase an aggregate 5,696,586 shares of Common Stock at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events).

 

The 2023 Notes mature between 3.5 months and 12 months, bear interest at rates between 8% and 12% per annum, and are convertible into shares of Common Stock at a conversion price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The 2023 Notes may be prepaid at any time without penalty. The Company is under no obligation to register the shares of Common Stock underlying the Notes or the 2023 Warrants for public resale.

 

The 2023 Notes and the 2023 Warrants contain conversion limitations providing that a holder thereof may not convert the 2023 Notes or exercise the 2023 Warrants to the extent that, if after giving effect to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the outstanding shares of the Common Stock immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice.

 

On December 14, 2023, two notes totaling $225,000 which matured on December 31, 2023 were rolled over for an additional 3 months to March 30, 2024. In exchange for the roll-over, the Company issued the note holders warrants exercisable for 292,463 shares of common stock at an exercise price of $0.345 per share.

 

The balance of the 2023 Notes plus accrued interest at December 31, 2023 was $1,591,734, net of unamortized debt discount of $515,847.
v3.24.1.u1
Derivative Liability
 12 Months Ended
Dec. 31, 2023
Derivative Liability [Abstract]  
DERIVATIVE LIABILITY
14 DERIVATIVE LIABILITY

 

The convertible notes and warrants issued by the Company to Cavalry, Mercer and RRH as described herein have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time and certain notes and warrants have fundamental transaction clauses which might result in cash settlement, due to these factors, all convertible notes and any warrants attached thereto are valued and give rise to a derivative financial liability, which was initially valued at inception of the convertible notes using a Black-Scholes valuation model.

 

On December 30, 2022, the Company entered into the December 2022 Note Amendment transaction (“the Note Amendment”) as fully described under note 12 above. Included in the derivative liability is: (i) the Original Warrants which were exchanged for non-convertible promissory notes, (ii) the Cavalry and Mercer convertible notes which were subject to the Note Amendment and (ii) the Cavalry and Mercer Extension Warrants as well as certain other warrants due to Cavalry and Mercer and certain other warrant holders. The Note Amendment triggered a repricing of certain of these warrants.

 

The derivative liability on the Cavalry and Mercer convertible notes and the warrants affected by the note amendment were marked-to-market immediately prior to the Note Amendment resulting in a market to market movement on the original warrants, the convertible notes and the extension warrants and certain other warrants, which were subject to a full rachet provision, of $474,614. In addition, the Note and warrant Amendment gave rise to an additional derivative liability charge of $2,317,051 which was recorded as an expense in the loss on convertible notes charge in the statement of operations.

 

On May 10, 2023 and June 13, 2023, the Company entered into convertible note agreements with 1800 Diagonal which have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time, which gave rise to a derivative financial liability, which was initially valued at inception of the convertible notes at $360,491 but limited to the cash value of the convertible notes of $150,000, using a Black-Scholes valuation model. These convertible notes were subsequently settled on August 3, 2023, resulting in the elimination of the derivative liability related to these notes.

 

 
Between September 12, 2023 and December 20, 2023, the Company entered into a convertible note agreement with RRH which have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time, which gave rise to a derivative financial liability, which was initially valued at inception of the convertible notes at $416,317 but limited to the cash value of the convertible notes of $235,000, using a Black-Scholes valuation model.

 

The net movement on the derivative liability for the year ended December 31, 2023 was a net mark-to-market credit of $1,501,446 determined by using a Black-Scholes valuation model.

 

The following assumptions were used in the Black-Scholes valuation model:

 

   Year ended
December 31,
2023		   Year ended
December 31,
2022		 
Conversion price  $ 0.104 to $0.345     $ 0.345 to $4.50   
Risk free interest rate   3.60 to 5.55 %    0.79 to 4.73 %
Expected life of derivative liability   3.5 to 47 months     1.5 to 59 months  
Expected volatility of underlying stock    158.72 to 217.01 %   120.49 to 258.3 %
Expected dividend rate   0%   0%

 

The movement in derivative liability is as follows:

 

   December 31,
2023		   December 31,
2022		 
Opening balance  $2,550,642   $407,161 
Derivative financial liability arising from convertible note and warrants   385,000    238,182 
Derivative financial liability arising on note amendment included in loss on convertible notes   
-
    2,317,051 
Fair value adjustment to derivative liability   (1,501,446)   (411,752)
   $1,434,196   $2,550,642 
v3.24.1.u1
Stockholders’ Equity
 12 Months Ended
Dec. 31, 2023
Stockholders’ Equity [Abstract]  
STOCKHOLDERS’ EQUITY
15 STOCKHOLDERS’ EQUITY

 

  a. Common Stock

 

The Company has total authorized Common Stock of 750,000,000 shares with a par value of $0.0001 each. The Company had 13,819,889 and 12,563,426 shares of Common Stock issued and outstanding as of December 31, 2023 and December 31, 2022, respectively.

 

On July 8, 2022, the Company entered into a consulting agreement with a third-party contractor for a period of twelve months to (i) review the Company’s business plan; (ii) analyze and assess the Company’s revenues, costs, and cash flow; and (iii) introduce the Company to and interface on the Company’s behalf with potential and actual commercial partners.

 

The Company issued 66,667 (2,000,000 pre-split) shares of Common Stock as compensation for the services rendered which were fully earned on the date of issue. These shares were valued at $84,000 at the date of grant. In addition, the contractor will receive a monthly fee of $3,000 for the term of the Agreement, commencing on August 1, 2022.

 

On July 8, 2022, the Company entered into a second consulting agreement with a separate third-party contractor for a period of twelve months to (i) review the Company’s business plan; (ii) analyze and assess the Company’s revenues, costs, and cash flow; and (iii) introduce the Company to and interface on the Company’s behalf with potential and actual commercial partners. The Company issued 66,667 (2,000,000 pre-split) shares of Common Stock as compensation for the services rendered which were fully earned on the date of issue. These shares were valued at $84,000 at the date of grant.

 

On July 11, 2022, the Board approved the issuance of  66,667 (2,000,000 pre-split) restricted shares of Common Stock to Richard Rosenblum, the Company’s President and Chief Financial Officer. These shares were valued at $110,000 at the date of grant.

 

On August 5, 2022, the Board approved the issuance of 100,000 (3,000,000 pre-split) shares of Common Stock to Samad Harake or his designees as compensation for the services rendered which were fully earned on the date of issue., Mr. Harake is the president and control person of Frictionless. These shares were valued at $165,000 at the date of grant.

 

On May 19, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 72,464 shares of Common Stock for the conversion of $25,000 of convertible debt, refer Note 13 above.

 

On August 16, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 72,464 shares of Common Stock for the conversion of $25,000 of convertible debt, refer Note 13 above.

 

On August 24, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 173,914 shares of Common Stock for the conversion of $60,000 of interest on convertible debt, refer Note 13 above.

 

On August 30, 2023, the Company effectuated a 1 for 30 reverse stock split, resulting in the issuance of an additional 2,838 shares to existing stockholders due to rounding of existing shareholdings. All share amounts disclosed in the unaudited condensed consolidated financial statements have been adjusted to reflect the Company’s 1 for 30 reverse stock split effectuated on August 30, 2023.

 

On August 31, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 144,928 shares of Common Stock for the conversion of $50,000 of convertible debt, refer note 13 above.

 

On November 8, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 289,855 shares of Common Stock for the conversion of $100,000 of convertible debt, refer note 13 above.

 

On November 20, 2023, in terms of a conversion notice received from a convertible note holder, the Company issued 500,000 shares of Common Stock for the conversion of $172,500 of convertible debt, refer note 13 above.

 

  b. Restricted stock awards

 

On December 15, 2020, in terms of an employment agreement entered into with an employee, the Company granted 83,333 (2,500,000 pre-split) restricted shares of which 33,333 (1,000,000 pre-split) vested on January 1, 2021 and the remaining 50,000 (1,500,000 pre-split) shares vest over a period of two years. The 50,000 (1,500,000 pre-split) shares of unvested restricted stock which was not physically issued to the employee were not earned due to the cessation of employment with the Company.

 

A summary of restricted stock activity during the period January 1, 2022 to December 31, 2023 is as follows:

 

   Total
restricted
shares*		   Weighted
average
fair market
value per
share*		   Total
unvested
restricted
shares*		   Weighted
average
fair market
value per
share*		   Total vested
restricted
shares*		   Weighted
average
fair market
value per share*		 
Outstanding January 1, 2022   716,500   $1.47    341,583   $1.47    374,917   $1.47 
Granted and issued   66,667    1.65    -    -    66,667    1.65 
Forfeited/Cancelled   -    -    -    -    -    - 
Vested   -    -    (170,791)   (1.47)   170,791    1.47 
Outstanding December 31, 2022   783,167   $1.50    170,792   $1.47    612,375   $1.50 
Granted and issued   -    -    -    -    -    - 
Forfeited/Cancelled   -    -    -    -    -    - 
Vested   -    -    (170,792)   (1.47)   170,792    1.47 
Outstanding December 31, 2023   783,167   $1.50    -   $-    783,167   $1.50 

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The restricted stock granted, issued and exercisable at December 31, 2023 is as follows:

 

    Restricted Stock
Granted and
Vested		 
Grant date Price   Number
Granted*		   Weighted Average Fair
Value per
Share*		 
$1.47    683,167   $1.47 
$1.50    33,333    1.50 
$1.65    66,667    1.65 
      783,167   $1.50 

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The Company has recorded an expense of $0 and $361,064 for the years ended December 31, 2023 and 2022, respectively. 

 

  c. Preferred Stock

 

The Company has authorized 25,000,000 shares of preferred stock with a par value of $0.0001 authorized. No preferred stock was issued and outstanding as of December 31, 2023 and December 31, 2022.

 

  d. Warrants

 

Effective July 8, 2022 (the “Effective Date”), the Company entered into an Endorsement Agreement with Pez-Mar, Inc., a California corporation (“Pez-Mar”), to furnish the services of Mario Lopez (“Lopez”). Pursuant to the Endorsement Agreement, Lopez will act as a Company spokesperson in connection with the promotion, advertisement and endorsement of the Company’s physical and virtual payment processing and money remittance business and the Company’s related products and services.

 

The Endorsement Agreement has a term of two (2) years from the Effective Date (the “Term”), which is subject to earlier termination on customary terms and conditions. The parties have agreed to certain deliverables of Lopez during the term of the agreement, including with respect to social media posts, television commercials, interviews and photo shoots. The Endorsement Agreement also contains other customary terms, covenants and conditions, including representations and warranties, restrictions on endorsements of competitive products during the term of the agreement, confidentiality, indemnification, and Pez-Mar and Lopez’s independent contractor status.

 

As compensation for the services provided under the Endorsement Agreement, Lopez or their designees are entitled to the following payments: (i) a cash endorsement fee of Three Hundred Thousand U.S. Dollars ($300,000 USD), payable as follows: (i) One Hundred Twenty-Five Thousand Dollars ($125,000) upon execution of the Endorsement Agreement, (ii) One Hundred Twenty-Five Thousand Dollars ($125,000) quarterly during the Term, beginning on the 90th day following the Effective Date, and (iii) Fifty Thousand Dollars ($50,000) on or prior to the first anniversary of the Effective Date and (ii) warrants exercisable for an aggregate of Five hundred thousand (500,000) shares of the Common Stock at an exercise price of $1.035 per share. The Warrants shall have a three-year term commencing from the Effective Date. The right to exercise the Warrants shall be subject to vesting during the Term but shall vest in full upon the consummation of a fundamental transaction involving the Company or upon certain termination events provided for in the Endorsement Agreement. The Exercise Price may be payable via “cashless exercise”, unless the underlying Shares are registered under an effective registration statement under the Securities Act of 1933, as amended. The Shares are subject to certain “piggyback” registration rights.

 

On August 30, 2022, the Company extended the maturity date of the Cavalry/Mercer Notes and agreed to grant each note holder a warrant exercisable for 100,000 shares of Common Stock at an exercise price of $4.50 per share with an expiration date of August 30, 2027.

 

On December 30, 2022, the Company issued to Frictionless a 5-year warrant to purchase 1,000,000 shares of Common Stock at an exercise price of $0.345 per share. The fair value of these warrants was $348,938 determined by using a Black-Scholes valuation model, which fair value was capitalized to purchased technology on the date of grant. On May 12, 2023, the Company entered into an agreement to cancel this warrant (see note 1(b)).

 

On December 30, 2022, the Company entered into the December 2022 Note Amendment Transaction, as fully described in note 11 above. In terms of the Note Amendment Transaction the following occurred:

 

  ● The warrants issued to Cavalry and Mercer exercisable for 165,798 shares of Common Stock (82,899 for each of Cavalry and Mercer), were exchanged for two promissory notes of $482,000 each, as disclosed in note 11 above;

 

  ● The warrants issued to Cavalry and Mercer on August 30, 2022, were subject to repricing and a full rachet increase in the number of warrants issued, resulting in an increase in the number of warrants by 2,408,696 (1,204,348 to each Cavalry and Mercer) and a reset of the exercise price to $0.345 per share. The additional warrants were valued at $841,003 using a Black-Scholes valuation model and was expensed in the statement of operations as a component of the loss on convertible debt.

 

  ● An additional 457,895 warrants previously issued to Mercer, Iroquois Master Fund and Bellridge Capital LP were subject to repricing of the exercise price from a range of $1.50 to $4.50 per share to $0.345 per share. The change in the fair value of these warrants of $20,079, using a Black-Scholes valuation model was recorded as a component of the loss on convertible debt.

 

Between February 13, 2023 and November 27, 2023, the Company entered into Securities Purchase Agreements with 30 accredited investors, as disclosed in note 13 above. In terms of these Securities Purchase Agreements, the Company issued five-year warrants to purchase an aggregate 5,696,586 shares of the Common Stock at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The Company is under no obligation to register the shares of Common Stock underlying the 2023 Notes or the 2023 Warrants for public resale.

 

On August 11, 2023, the company issued an investor a five-year replacement warrant for a warrant that had expired on February 13, 2023 exercisable for 33,334 shares of common stock at an exercise price of $1.50 per share.

 

On December 14, 2023, two notes totaling $225,000 which matured on December 31, 2023 were rolled over for an additional 3 months to March 30, 2024. In exchange for the roll-over, the Company issued the note holders five-year warrants exercisable for 292,463 shares of common stock at an exercise price of $0.345 per share.

 

During the current year warrants exercisable for 33,334 shares expired as unexercised and a further warrants exercisable for 1,000,000 shares of common stock were forfeited on the disposal of frictionless and Beyond Fintech as disclosed in note 4 above.

 

The 2023 Warrants contain conversion limitations providing that a holder thereof may not exercise the Warrants to the extent that, if after giving effect to such exercise, the holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the outstanding shares of the Common Stock immediately after giving effect to such exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice.

 

In connection with the formation of IPSIPay Express, the Company issued to each of the other venture partners, OpenPath and EfinityPay, IPEX Warrants to purchase an aggregate of 133,334 shares of Common Stock with an exercise of $0.45 per share. The Company is obligated to issue each of OpenPath and EfinityPay additional IPEX Warrants to purchase 199,999 shares of Common Stock at a price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the remaining initial Tranche. Simultaneously with the funding of the second Tranche in September 2023, the Company became obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the second Tranche. Simultaneously with the funding of the third Tranche, the Company will issue to each of OpenPath and EfinityPay an additional IPEX warrant to purchase 166,667 shares of common stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the third Tranche. If the full IPSI Capital Contribution is funded, OpenPath and EfinityPay will receive IPEX Warrants to purchase an aggregate of 1,333,334 shares of Common Stock. See note 1(b) above.

 

The fair value of the warrants granted and issued, as described above, were determined by using a Black Scholes valuation model using the following assumptions:

 

   Year ended
December 31,
2023		 
Exercise price  $ 0.345 to 0.45   
Risk free interest rate    3.77 to 4.86 %
Expected life    5 years   
Expected volatility of underlying stock    187.40 to 192.80 %
Expected dividend rate   0%

 

A summary of warrant activity during the period January 1, 2022 to December 31, 2023 is as follows:

 

   Shares
Underlying
Warrants*		   Exercise
price per
share*		   Weighted
average
exercise
price*		 
Outstanding January 1, 2022   1,243,477   $ 1.50 – 5.625     $3.60 
Granted   1,700,000     0.345 – 1.035     0.5478 
Increase in warrants due to debt amendment full rachet trigger   2,408,696    0.345    0.345 
Cancelled on debt amendment   (165,797)   4.50    4.50 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2022   5,186,376   $0.345 – 5.625   $0.9000 
Granted   6,289,051     0.345 – 1.50    0.3556 
Forfeited   (33,334)   1.50    1.5000 
Cancelled on disposal of investment in Frictionless and Beyond Fintech   (1,000,000)   0.345    0.3450 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2023   10,442,093   $0.345 – 5.625    $0.6265 

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The warrants outstanding and exercisable at December 31, 2023 are as follows:

 

      Warrants Outstanding*     Warrants Exercisable*  
Exercise Price*     Number
Outstanding*		     Weighted
Average
Remaining
Contractual
life in years		     Weighted
Average
Exercise
Price*		     Number
Exercisable*		     Weighted
Average
Exercise
Price*		     Weighted
Average
Remaining
Contractual
life in years		  
$ 0.345       9,055,642       4.16               9,055,642               4.16  
$ 0.450       266,668       4.48               266,668               4.48  
$ 1.035       500,000       1.52               437,500               1.52  
$ 1.500       33,334       4.62               33,334               4.62  
$ 4.50       505,560       2.21               505,560               2.21  
$ 5.625       80,889       2.21               80,889               2.21  
          10,442,093       3.94     $ 0.6265       10,379,593     $ 0.6240       3.95  

 

* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The warrants outstanding have an intrinsic value of $0 and $0 as of December 31, 2023 and 2022, respectively.

 

  e. Stock options

 

On June 18, 2018, the Company established its 2018 Stock Incentive Plan (the “Plan”). The purpose of the Plan is to promote the interests of the Company and the stockholders of the Company by providing directors, officers, employees and consultants of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives. The Plan terminates after a period of ten years in June 2028.

 

The Plan is administered by the Board or a committee appointed by the Board, who have the authority to administer the Plan and to exercise all the powers and authorities specifically granted to it under the Plan.

 

The maximum number of securities available under the Plan is 26,667  shares of Common Stock. The maximum number of shares of Common Stock awarded to any individual during any fiscal year may not exceed 100,000 shares of Common Stock.

 

On October 22, 2021, the Company established its 2021 Stock Incentive Plan (“2021 Plan”). The purpose of the Plan is to promote the interests of the Company and the stockholders of the Company by providing directors, officers, employees and consultants, advisors and service providers of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives. The Plan terminates after a period of ten years in August 2031.

 

The 2021 Plan is administered by the Board or a Compensation Committee appointed by the Board, who have the authority to administer the Plan and to exercise all the powers and authorities specifically granted to it under the Plan.

 

The maximum number of securities available under the 2021 Plan is 1,766,667 shares of Common Stock.

 

Under the 2021 Plan the Company may award the following: (i) non-qualified stock options; (ii)) incentive stock options; (iii) stock appreciation rights; (iv) restricted stock; (v) restricted stock unit; and (vi) other stock-based awards.

  

On July 11, 2022, the Board approved, granted and issued 500,000 ten-year incentive stock options, with immediate vesting, to the Company’s Chairman and Chief Executive Officer at an exercise price of $4.50 per share. This resulted in an immediate expense of $823,854 for the year ended December 31, 2022.

 

On September 13, 2022, the Company granted ten-year options exercisable for 6,667 shares of Common Stock, with immediate vesting, to each of its four non-executive directors, totaling options exercisable for 26,668 shares of Common Stock at an exercise price of $1.20 per share. This resulted in an immediate expense of $31,970 for the year ended December 31, 2022.

 

During the current financial year, the Company cancelled options exercisable for 23,891 (716,666 pre-split) shares of common stock due to the previous resignation or termination of employees and officers whose stock options were not exercised in accordance with the terms allowed under the plan and were therefore canceled.

 

A summary of option activity during the period January 1, 2022 to December 31, 2023 is as follows:

 

   Shares
Underlying
options*		   Exercise
price per
share*		   Weighted
average
exercise
price*		 
Outstanding January 1, 2022   1,017,223   $4.50 to 12.00   $4.50 
Granted   526,668    1.20 – 4.50    4.20 
Forfeited/Cancelled   
-
    
-
    
-
 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2022   1,543,891   $1.20 to 12.00   $4.47 
Granted   
-
    
-
    
-
 
Forfeited/Cancelled   (23,889)  $1.20 to 12.00    5.41 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2023   1,520,002   $1.20 to 12.00   $4.46 

 

*After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 

The options outstanding and exercisable at December 31, 2023 are as follows:

 

    Options Outstanding*   Options Exercisable* 
Exercise  Price*   Number
Outstanding*		   Weighted
Average
Remaining
Contractual
life in years		   Weighted
Average
Exercise
Price*		   Number
Exercisable*		   Weighted
Average
Exercise
Price*		   Weighted
Average
Remaining
Contractual
life in years		 
$1.20    20,001    5.86         20,001         5.86 
$4.50    1,500,001    7.94         1,388,890         7.96 
      1,520,002    7.91   $4.46    1,408,891   $4.45    7.93 

 

The options outstanding have an intrinsic value of $0 as of December 31, 2023 and 2022.

 

The option expense was $377,856 and $1,233,682 for the years ended December 31, 2023 and 2022, respectively.
v3.24.1.u1
Loss on Convertible Notes
 12 Months Ended
Dec. 31, 2023
Loss on Convertible Notes [Abstract]  
LOSS ON CONVERTIBLE NOTES
16LOSS ON CONVERTIBLE NOTES

 

The loss on convertible notes consists of the following:

 

   December 31,
2023		   December 31,
2022		 
Penalty on cash settlement of convertible note  $9,306   $247,063 
Expense on extension of maturity date of convertible notes   64,256    836,414 
Fair value of warrants issued to convertible note holders on extension of maturity date   
-
    238,182 
Fair value of derivative liability arising on the amendment of the exercise price of convertible notes and the full-rachet trigger on certain warrants issued to convertible note holders   
-
    2,360,658 
Value of notes exchanged for certain warrants, net of the derivative liability value of $(43,608)   
-
    920,392 
   $73,562   $4,602,709 

 

Penalty on cash settlement of convertible note

 

On February 4, 2022, the Company cash settled the outstanding balance, including early settlement penalty thereon of $247,063, of a convertible note owing to Bellridge for gross proceeds of $1,235,313.

 

On August 3, 2023, the Company cash settled the outstanding balance of two convertible notes owing to 1800 Diagonal Street Lending LLC, including an early settlement penalty thereon of $9,306.

 

Expense on extension of maturity date of convertible notes

 

On December 14, 2023, the Company extended the maturity date of two convertible notes to March 30, 2024, and issued the note holders additional warrants exercisable for 292,463 shares of common stock, the modification of the terms and the issue of the new warrants was assessed as a debt extinguishment, resulting in a charge of $64,256 for the year ended December 31, 2023.

 

In the prior year, The Company twice extended the maturity date of its indebtedness to each Cavalry and Mercer. On February 3, 2022, the Company agreed to extend the maturity date of the Notes to August 16, 2022. Additionally, on August 30, 2022, the Company entered agreements for an additional maturity date extension to November 16, 2022, in terms of these extensions, the Company incurred penalties which increased the principle outstanding of these convertible notes in the aggregate amount of $836,414.

 

Fair value of warrants issued to convertible note holders on extension of maturity date

 

In addition to the penalty on extension of maturity date on its indebtedness to each of Cavalry and Mercer, in consideration for the second extension on August 30, 2022, the Company agreed to issue to each of Cavalry and Mercer a new five-year warrant to purchase an additional 100,000 (3,000,000 pre-split) shares of common stock at an exercise price of $4.50 ($0.15 pre-split) per share. The fair value of these warrants were determined as $238,182 on August 30, 2022, using a Black-Scholes valuation model.

 

Fair value of derivative liability arising on the amendment of the exercise price of convertible notes and the full-rachet trigger on certain warrants issued to convertible note holders

 

On December 30, 2022, the Company again extended the maturity dates of each of the Notes to Cavalry and Mercer to December 30, 2023. Each of Cavalry and Mercer entered into Note Amendment Letter Agreement with the Company (the “Note Amendment”) pursuant to which the parties agreed that the conversion price of the Notes was reduced from $4.50 ($0.15 pre-split) to $0.345 ($0.0115 pre-split) per share and in addition, resulted in the 100,000 (3,000,000 pre-split) shares of common stock underlying the Extension Warrants increasing to 1,304,348 (39,130,435 pre-split) shares, in terms of the full-rachet provisions in those warrant agreements. The change in the conversion price and the increase in the number of warrant shares to be issued at the revised exercise price of $0.345 ($0.0115 pre-split) per share, resulted in a derivative liability on December 30, 2022 of $2,340,580, determined by using a Black-Scholes valuation model.

 

In addition to this, certain other warrants outstanding had their conversion price reduced from $1.50 ($0.05 pre-split) per share to $0.345 ($0.0115 pre-split) per share in terms of their warrant agreements, resulting in an additional derivative liability on December 30, 2022 of $20,079, determined by using a Black-Scholes valuation model.

 

Value of notes exchanged for certain warrants, net of the derivative liability value of $(43,608)

 

On December 30, 2022, the Company also agreed to exchange the Original Warrants issued on February 16, 2021 to Cavalry and Mercer for 12-month non-convertible promissory notes in the amount of $482,000 each. This resulted in an additional charge of $964,000, less the fair value of the derivative liability of the Original warrants of $43,608, valued on December 30, 2022, using a Black-Scholes valuation model.
v3.24.1.u1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Taxes [Abstarct]  
INCOME TAXES
17INCOME TAXES

 

The Company’s operations are based in the US and currently enacted tax laws in the US are used in the calculation of income taxes.

 

Federal Income Tax - United States

 

On December 22, 2017, the Tax Cuts and Jobs Act (the TCJA), which significantly modified U.S. corporate income tax law, was signed into law by President Trump. The TCJA contains significant changes to corporate income taxation, including but not limited to the reduction of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and generally eliminating net operating loss carrybacks, allowing net operating losses to carryforward without expiration, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including changes to the orphan drug tax credit and changes to the deductibility of research and experimental expenditures that will be effective in the future). Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain, including to what extent various states will conform to the newly enacted federal tax law.

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, 2022 and 2021, there have been no interest or penalties incurred on income taxes.

 

The provision for income taxes consists of the following:

 

   Year ended
December 31,
2023		   Year ended
December 31, 
2022		 
Current          
Federal  $
         
   $
           
 
State   
-
    
-
 
Foreign   
-
    
-
 
   $
-
   $
-
 
Deferred          
Federal  $
-
   $
-
 
State   
-
    
-
 
Foreign   
-
    
-
 
   $
-
   $
-
 

 

A reconciliation of the U.S. Federal statutory income tax to the effective income tax is as follows:

 

   Year ended
December 31,
2023		   Year ended
December 31,
2022		 
Continuing operations        
Tax expense at the federal statutory rate  $(1,225,845)  $(2,169,599)
State tax expense, net of federal tax effect   (170,564)   (324,289)
Permanent differences   712,951    1,194,446 
Prior year net operating loss true up   (228,714)   (3,277)
    (912,172)   (1,302,719)
Deferred income tax asset valuation allowance   912,172    1,302,719 
   $
-
   $
-
 

 

Significant components of the Company’s deferred income tax assets are as follows:

 

   December 31,
2023		   December 31,
2022		 
Other  $241,491   $241,491 
Capital loss   491,275    - 
Net operating losses   6,900,076    6,479,181 
Stock based compensation   511,142    511,142 
Valuation allowance   (8,143,986)   (7,231,814)
Net deferred income tax assets  $
-
   $
-
 

 

The valuation allowance for deferred income tax assets as of December 31, 2023 and December 31, 2022 was $8,143,986 and $7,231,814, respectively. The net change in the deferred income tax assets valuation allowance was an increase of $912,172 and is primarily attributable to tax operating losses and capital losses realized during the current year.

 

As of December 31, 2023, the prior three years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

 

As of December 31, 2023, the Company had available for income tax purposes approximately $26.8 million in federal and $19.0 million in state net operating loss carry forwards, which may be available to offset future taxable income. $3.5 million of the net operating losses will begin to expire in 2034 and $23.3 million has an indefinite life. Due to the uncertainty of the utilization and recoverability of the loss carryforwards and other deferred tax assets, Management has determined a full valuation allowance for the deferred tax assets since it is more likely than not that the deferred tax assets will not be realizable.

The Company’s ability to utilize the previous Federal operating loss carryforwards may be adjusted if, pursuant to IRC Section 382/383 of the Internal Revenue Code of 1986, as amended, a change of ownership occurs. Management does not believe an ownership change has occurred under IRC Section 382/383. A future change in ownership may result in an adjustment to the loss carryforward.

 

The Company is subject to taxation in the U.S. and CA state. U.S. federal income tax returns for 2019 and after, remain open to examination. No income tax returns are currently under examination. As of December 31, 2023 and 2022, the Company does not have any unrecognized tax benefits, and continues to monitor its current and prior tax positions for any changes. The Company recognizes penalties and interest related to unrecognized tax benefits as income tax expense. For the years ended December 31, 2023 and 2022, there were no penalties or interest recorded in income tax expense. 
v3.24.1.u1
Equity Based Compensation
 12 Months Ended
Dec. 31, 2023
Equity Based Compensation [Abstract]  
EQUITY BASED COMPENSATION
18EQUITY BASED COMPENSATION

 

Equity based compensation is made up of the following:

 

   Year ended
December 31,
2023		   Year ended
December 31,
2022		 
Incentive stock awards  $377,856   $1,594,746 
Securities issued for services rendered   144,828    333,000 
   $522,684   $1,927,746 
v3.24.1.u1
Net Loss Per Share
 12 Months Ended
Dec. 31, 2023
Net Loss Per Share [Abstract]  
NET LOSS PER SHARE
19NET LOSS PER SHARE

 

Basic loss per share is based on the weighted-average number of common shares outstanding during each period. Diluted loss per share is based on basic shares as determined above plus common stock equivalents. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share. For the years ended December 31, 2023 and 2022 all warrants options and convertible debt securities were excluded from the computation of diluted net loss per share.

 

Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive for the years ended December 31, 2023 and 2022 are as follows:

 

   Year ended
December 31, 
2023
(Shares)		   Year ended
December 31, 
2022
(Shares)		 
Convertible debt   13,363,993    6,569,863 
Stock options   1,520,002    1,543,891 
Warrants to purchase shares of common stock   10,442,093    5,186,375 
    25,326,088    13,300,129 
v3.24.1.u1
Related Party Transactions
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS
20RELATED PARTY TRANSACTIONS

 

The following transactions were entered into with related parties:

 

James Fuller

 

On September 13, 2022, the Company granted Mr. Fuller ten-year options exercisable for 6,667 shares of Common Stock at an exercise price of $1.20 per share.

 

The option expense for Mr. Fuller was $0 and $7,993 for the years ended December 31, 2023 and 2022, respectively.

 

Mr. Fuller voluntarily resigned as a member of the Board of Directors effective as of our 2022 annual meeting of shareholders which occurred on November 3, 2022.

 

William Corbett

 

On July 11, 2022, the Company granted Mr. Corbett ten-year options exercisable for 500,000 shares of Common Stock at an exercise price of $4.50 per share.

 

On June 21, 2023, Mr. Corbett advanced the company $50,000 to cover certain working capital expenses, the advance is short term in nature, bears no interest and has no fixed repayment terms. This advance was repaid on December 4, 2023.

 

The option expense for Mr. Corbett was $266,346 and $1,090,201 for the years ended December 31, 2023 and 2022, respectively.

 

Clifford Henry

 

Mr. Henry has an oral consulting arrangement with the Company whereby he is paid $3,500 per month for financial and capital markets advice. This consulting agreement commenced in May, 2021 and was approved and ratified by the Board in March 2022. This consulting agreement and related payments were terminated in September 2022.

 

On September 13, 2022, the Company granted Mr. Henry, immediately vesting, ten-year options exercisable for 6,667 shares of Common Stock at an exercise price of $1.20 per share, valued at $7,993 using a Black Scholes valuation model.

 

The option expense for Mr. Henry was $0 and $7,993 for the years ended December 31, 2023 and 2022, respectively.

 

Mr. Henry voluntary elected not to stand for re-election at the company’s annual general meeting, his tenure as a director ended on the date of the annual general meeting, November 30, 2023.

 

Madisson Butler

 

On September 13, 2022, the Company granted Ms. Butler (formerly known as Madisson Corbett), immediately vesting, ten-year options exercisable for 6,667 shares of Common Stock at an exercise price of $1.20 per share, valued at $7,993 using a Black Scholes valuation model.

  

The option expense for Ms. Butler was $0 and $7,993 for the years ended December 31, 2023 and 2022, respectively.

 

David Rios

 

On September 13, 2022, the Company granted Mr. Rios, immediately vesting, ten-year options exercisable for 6,667 shares of Common Stock at an exercise price of $1.20 per share, valued at $7,993 using a Black Scholes valuation model.

 

The option expense for Mr. Rios was $0 and $7,993 for the years ended December 31, 2023 and 2022, respectively.

 

Richard Rosenblum

 

On July 11, 2022, the Company granted Mr. Rosenblum 66,667 restricted shares of Common Stock valued at $110,000, all of which are vested.

 

The option expense for Mr. Rosenblum was $111,510 for each of the years ended December 31, 2023 and 2022, respectively.
v3.24.1.u1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES
21COMMITMENTS AND CONTINGENCIES

 

The Company has notes payable and convertible notes payable, disclosed under notes 12 and 13 above, which originally matured between December 30, 2023 and September 14, 2024, of which the notes that had maturity dates between December 30, 2023 and February 23, 2024 have been extended to dates between April 30, 2024 and August 23, 2024. The Company may settle the notes payable, at its option by the issue of common shares and should the convertible notes not be converted to Common Stock prior to their maturity dates, the Company may need to repay the principal and interest outstanding on these notes.
v3.24.1.u1
Subsequent Events
 12 Months Ended
Dec. 31, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
22SUBSEQUENT EVENTS

 

Convertible note funding

  

Between February 6 and February 21, 2024, the Company entered into Securities Purchase Agreements pursuant to which the Company issued convertible promissory notes to four accredited investment entities for total gross proceeds of $308,335. The Notes are unsecured, mature 12 months from issuance date and bear interest at a rate of 8% per annum, and are convertible into shares of common stock of the Company at a conversion price of $0.345 per share (as adjusted for stock splits, stock combinations, and similar events). The Notes may be prepaid at any time without penalty. The Note contains customary events of default. The Company is under no obligation to register the shares of Common Stock underlying the Notes for public resale.

On March 4, 2024, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued a convertible promissory note and a warrant exercisable for shares of common stock to an accredited investor. The Company realized gross proceeds of $100,000 after an original issue discount of $14,286 and a once off interest charge of $9,143. The note matures on September 4, 2024. Principal and interest payments are due in four equal instalments of $30,871 commencing on May 3, 2024. The note is convertible into common stock at a fixed price of $0.345 per share, unless the note is in default, whereby the conversion price will be 70% of the lowest closing bid price for the 5 trading days prior to conversion. The note may be prepaid at any time for the full outstanding principal and outstanding interest.

  

Non-Binding Letter of Intent with Business Warrior

  

Overview and Cautionary Statement

  

On February 13, 2024, the Company signed an amended and restated non-binding letter of intent (the “LOI”) with Business Warrior Corporation, a Wyoming corporation (“BZWR”), pursuant to which the Company would acquire BZWR on the general terms described below (the “Proposed Transaction”).

  

Neither IPSI nor BZWR shall have any legal obligation of any kind with respect to the Proposed Transaction unless and until binding definitive agreements with respect to the Proposed Transaction are executed. Moreover, the Proposed Transaction, assuming definitive agreements are even executed, would be subject to the approval of the stockholders of both IPSI and BZWR and the satisfaction of other conditions to closing.

  

BZWR is a publicly listed, revenue generating fintech company that offers PayPlan, a comprehensive lending software platform that includes marketing services for lenders and businesses. The Company believes that a potential combination with a fintech company that generates some revenue monthly would complement the development and commercial launch of the Company’s IPSIPay ExpressTM products and potentially other product offerings.

  

In addition, the Company and BZWR have certain convertible note investors (the “Note Holders”) in common. Therefore, one purpose of the Proposed Transaction would be to convert the indebtedness of both the Company and BZWR held by the Note Holders into equity securities of the Company.

  

Outline of Proposed Terms

  

The principal terms of the Proposed Transaction are as follows:

  

1.Preliminary Structure. At the closing of the Proposed Transaction (the “Closing”), the Company would acquire 100% of the outstanding equity and equity equivalents of BZWR (including outstanding warrants and other securities that have the right to acquire or convert into equity securities of BZWR) on a cash-free, debt free basis by way of a merger of BZWR into a new subsidiary of the Company.

  

  2.

Consideration. The total consideration provided to or for the benefit of BZWR equity holders (including holders of warrants and other outstanding preferred stock or other convertible securities of BZWR), as applicable (the “Transaction Consideration”) would be in the form of newly-issued shares (the “Transaction Shares”) of Company common stock representing forty percent (40%) of the Common Stock immediately following the Closing.

  

  3. Note Exchange Transaction; Replacement Preferred. Prior to and as a condition to the Closing, the Note Holders of both IPSI and BZWR shall effect a note exchange transaction pursuant to which all of the outstanding convertible notes of IPSI and BZWR held by the Note Holders will be cancelled and exchanged for shares of newly-issued Series A Convertible Preferred Stock of IPSI (“Replacement Preferred”). The terms of the Replacement Preferred will be negotiated with the Note Holders.

  

  4. BZWR Capitalization Restructure. Prior to the Closing, BZWR shall cause all of its outstanding shares of preferred stock and warrants to be converted into shares of BZWR common stock, net exercised or cancelled, with the effect that only shares of BZWR common stock would be outstanding a Closing, the holders of which would be entitled to receive the Transaction Consideration.

  

  5. Board of Directors. The post-Closing Board of Directors of IPSI shall consist of a number of individuals to be agreed upon by IPSI and BZWR, provided that (i) the majority of the post-Closing Board of Directors will be appointed by IPSI and (ii) the majority of the post-Closing Board of Directors will be “independent” as defined under Nasdaq Stock Market rules.

  

Company Loan to BZWR

 

On February 12, 2024, and in connection with the LOI and the Proposed Transaction, the Company (utilizing a portion of the proceeds from the issuance of convertible Notes) loaned funds to BZWR in the principal amount of $226,190, which includes an original issue discount equal to $67,857, netting BZWR proceeds $158,333. The loan is memorialized by a secured promissory note (the “BZWR Note”). The BZWR Note does not accrued interest, except in the case of an event of default, which case interest accrues at 15% per annum. The BZWR Note matures on the earlier to occur of December 31, 2025 and the date that BZWR’s securities are listed on a national securities exchange. The BZWR Note may be prepaid at any time for an amount equal to 110% of the then principal and accrued interest. IPSI shall have the right to exchange the BZWR Note for securities issued by BZWR in any subsequent private placement by BZWR. The principal and accrued interest under BZWR Note is convertible into common stock of BZWR at a price equal to $0.0036 per share, subject to certain adjustments and potential resets. BZWR’s obligations under the BZWR Note are guaranteed by BZWR’s subsidiaries and secured by a lien on BZWR’s accounts receivable. The BZWR Note is one of several similar notes issued by BZWR. Keystone Capital Partners LLC is acting as collateral agent for the holders of such notes, include IPSI as the holder of the BZWR Note.
v3.24.1.u1
Accounting Policies, by Policy (Policies)
 12 Months Ended
Dec. 31, 2023
Accounting Policies and Estimates [Abstract]  
Basis of Presentation
  a) Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.
Principles of Consolidation
  b) Principles of Consolidation

The consolidated financial statements as of December 31, 2023, include the financial statements of the Company and its subsidiary, Beyond Fintech, in which it had a majority voting interest, until May 12, 2023, the date of disposal. Pursuant to the May 2023 Frictionless Agreement, the Company disposed of its 51% interest in Beyond Fintech. Therefore, as of May 12, 2023 the Company has no subsidiaries. See note 4 for further information.

All significant inter-company accounts and transactions have been eliminated in the consolidated financial statements.
Use of Estimates
  c) Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which are evaluated on an ongoing basis, that affect the amounts reported in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to, the estimated useful lives for plant and equipment, the fair value of long-lived investments, the fair value of warrants and stock options granted for services or compensation, convertible notes and amendments thereto, derivative liabilities, the valuation allowance for deferred tax assets due to continuing operating losses and the allowance for doubtful accounts.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

 
Contingencies
  d) Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.
Fair Value of Financial Instruments
  e) Fair Value of Financial Instruments

The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the balance sheets for cash, accounts receivable, other current assets, other assets, accounts payable, accrued liabilities, and notes payable, approximate fair value due to the relatively short period to maturity for these instruments. The Company has identified the short-term convertible notes and certain warrants attached to certain of the notes that are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We evaluate the fair value of variably priced derivative liabilities on a quarterly basis and report any movements thereon in earnings.
Risks and Uncertainties
  f) Risks and Uncertainties

The Company’s operations are and will be subject to significant risks and uncertainties including financial, operational, regulatory, and other risks, including the potential risk of business failure. The recent war in Ukraine and the global inflationary environment which has resulted in significant interest rate increases in the U.S and abroad has resulted in a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, and extreme volatility in credit, equity and fixed income markets. These conditions may not only limit the Company’s access to capital, but also make it difficult for its customers, vendors and the Company to accurately forecast and plan future business activities, which may have an adverse impact on its business and financial condition and may hamper the Company’s ability to generate revenue and access usual sources of liquidity on reasonable terms.

The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

 
Recent accounting pronouncements
  g) Recent accounting pronouncements

The Financial Accounting Standards Board (“FASB”) issued additional updates during the year ended December 31, 2023. None of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the Company’s consolidated financial statements upon adoption.
Reporting by Segment
  h) Reporting by Segment

No segmental information is required as the Company has only one operating segment.
Cash and Cash Equivalents
  i) Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. At December 31, 2023 and 2022, respectively, the Company had no cash equivalents.

The Company minimizes credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution in the United States. The balance at times may exceed federally insured limits. At December 31, 2023 and 2022, the balance exceeds the federally insured limit by $0 and $120,580, respectively.
Accounts Receivable and Allowance for Doubtful Accounts
  j) Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Revisions to the allowance for doubtful accounts estimates are recorded as an adjustment to bad debt expense. Receivables deemed uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written-off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. There were no recoveries during the period ended December 31, 2023 and 2022.
Investments
  k) Investments

The Company’s non-marketable equity securities are investments in privately held companies without readily determinable market values. The carrying value of our non-marketable equity securities is adjusted to fair value for observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative). All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income (expense), net. Non-marketable equity securities that have been remeasured during the period are classified within Level 3 in the fair value hierarchy because the Company estimates the value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities the Company holds. The cost method is used when the Company has a passive, long-term investment that doesn’t result in influence over the Company. The cost method is used when the investment results in an ownership stake of less than 20%, and there is no substantial influence. Under the cost method, the stock purchased is recorded on a balance sheet as a non-current asset at the historical acquisition/purchase price, and is not modified unless shares are sold, additional shares are purchased or there is evidence of the fair market value of the investment declining below carrying value. Any dividends received are recorded as income.

The Company recorded an impairment charge of $0 and $1 on its non-marketable equity securities for the years ended December 31, 2023 and 2022, respectively. The impairment charge was based on management’s determination that due to the lack of ability, to date, by Vivi Holdings (“Vivi”) to fulfill its capital raising requirements and implement its business strategy that there is a significant risk that Vivi may not be able to meet its obligations. 

 
Plant and Equipment
  l) Plant and Equipment

Plant and equipment is stated at cost, less accumulated depreciation. Plant and equipment with costs greater than $1,000 are capitalized and depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:

Description   Estimated Useful Life
     
Kiosks   7 years
     
Computer equipment   3 years
     
Leasehold improvements   Lesser of estimated useful life or life of lease
     
Office equipment   10 years

The cost of repairs and maintenance is expensed as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition.
Long-Term Assets
  m) Long-Term Assets

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Revenue Recognition
  n) Revenue Recognition

The Company’s revenue recognition policy is consistent with the requirements of FASB ASC 606, Revenue.

The Company’s revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services, as defined below. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions:

  i. identify the contract with a customer;
  ii. identify the performance obligations in the contract;
  iii. determine the transaction price;
  iv. allocate the transaction price to performance obligations in the contract; and
  v. recognize revenue as the performance obligation is satisfied.

The Company had minimal revenues of $410 and $847 during the years ended December 31, 2023 and 2022, respectively. 

 
Share-Based Payment Arrangements
  o) Share-Based Payment Arrangements

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments is recorded in operating expenses in the consolidated statement of operations.

Prior to the Company’s reverse merger which took place on May 12, 2016, all share-based payments were based on management’s estimate of market value of the Company’s equity. The factors considered in determining managements estimate of market value includes, assumptions of future revenues, expected cash flows, market acceptability of our technology and the current market conditions. These assumptions are complex and highly subjective, compounded by the business being in its early stage of development in a new market with limited data available.

Where equity transactions with arms-length third parties, who had applied their own assumptions and estimates in determining the market value of our equity, had taken place prior to and within a reasonable time frame of any share-based payments, the value of those share transactions have been used as the fair value for any share-based equity payments.

Where equity transactions with arms-length third parties, included both shares and warrants, the value of the warrants have been eliminated from the unit price of the securities using a Black-Scholes valuation model to determine the value of the warrants. The assumptions used in the Black Scholes valuation model includes market related interest rates for risk-free government issued treasury securities with similar maturities; the expected volatility of the Company’s common stock based on companies operating in similar industries and markets; the estimated stock price of the Company; the expected dividend yield of the Company and; the expected life of the warrants being valued.

Subsequent to the Company’s reverse merger which took place on May 12, 2016, the Company has utilized the market value of its common stock as quoted on the OTCQB, as an indicator of the fair value of its common stock in determining share- based payment arrangements.
Derivative Liabilities
  p) Derivative Liabilities

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.
Income Taxes
  q) Income Taxes

The Company is based in the US and currently enacted US tax laws are used in the calculation of income taxes.

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, 2023 and December 31, 2022, there have been no interest or penalties incurred on income taxes.

 
Comprehensive income
  r) Comprehensive income

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. The Company does not have any comprehensive income (loss) for the periods presented.
Reclassification of prior year presentation
  s) Reclassification of prior year presentation

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.
v3.24.1.u1
Accounting Policies and Estimates (Tables)
 12 Months Ended
Dec. 31, 2023
Accounting Policies and Estimates [Abstract]  
Schedule of Estimated Useful Lives of the Assets Plant and equipment is stated at cost, less accumulated depreciation. Plant and equipment with costs greater than $1,000 are capitalized and depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:
Description   Estimated Useful Life
     
Kiosks   7 years
     
Computer equipment   3 years
     
Leasehold improvements   Lesser of estimated useful life or life of lease
     
Office equipment   10 years
v3.24.1.u1
Disposal of Investment in Frictionless and Beyond Fintech (Tables)
 12 Months Ended
Dec. 31, 2023
Disposal of Investment in Frictionless and Beyond Fintech [Abstract]  
Schedule of Assets and Liabilities The assets and liabilities disposed of as of May 12, 2023 were as follows:
   Amount 
Assets    
     
Current Assets    
Cash  $339 
      
Non-current assets     
Intangible assets   327,211 
Security deposit   15,000 
Investment   500,000 
    842,211 
Total assets   842,550 
      
Liabilities     
      
Current Liabilities     
Accounts payable   97,126 
      
Net assets sold   745,424 
Proceeds due on disposal   (250,000)
Net loss on disposal  $495,424 
v3.24.1.u1
Novation of Certain Assets and Liabilites (Tables)
 12 Months Ended
Dec. 31, 2023
Novation of Certain Assets and Liabilites [Abstract]  
Schedule of Assets and liabilities Novated The assets and liabilities novated under the agreement as of September 5, 2023, were as follows:
   Amount 
Assets    
     
Current Assets    
Receivable on sale of subsidiary  $231,431 
      
Non-current assets     
Intangible assets   1,098,598 
Total assets   1,330,029 
      
Current Liabilities     
Accounts payable   263,864 
      
Net loss on novation  $1,066,165 
v3.24.1.u1
Discontinued Operations (Tables)
 12 Months Ended
Dec. 31, 2023
Discontinued Operations [Abstract]  
Schedule of Assets and Liabilities The following assets and liabilities are reported as discontinued operations:
   December 31, 
   2022 
Current assets    
Cash  $943 
Non-current assets     
Intangibles, net   291,320 
Investment   500,000 
Security deposit   15,000 
Assets held for sale  $807,263 
      
Current liabilities     
Accounts payable  $33,810 
Liabilities held for sale  $33,810 
Schedule of Statement of Operations from Discontinued Operations The statement of operations from discontinued operations is as follows:
   Year ended December 31, 
   2023   2022 
         
Net Revenue  $
-
   $
-
 
           
Cost of Goods Sold   
-
    
-
 
           
Gross loss   
-
    
-
 
           
General and administrative   40,821    88,300 
Depreciation and amortization   
-
    
-
 
Total Expense   40,821    88,300 
           
Loss from operations before income taxes   (40,821)   (88,300)
           
Income Taxes   
-
    
-
 
Loss from discontinued operations, net of taxation  $(40,821)  $(88,300)
v3.24.1.u1
Intangibles (Tables)
 12 Months Ended
Dec. 31, 2023
Intangibles [Abstract]  
Schedule of Facilitate the Functioning of the IPSIPay Software On September 5, 2023, the Company novated all its rights and obligations to its IPSIPay wallet to a third party (see note 5 above).
   December 31,
2023		   December 31,
2022		 
   Cost   Accumulated
amortization		   Net Book
Value		   Net book
value		 
Purchased Technology - IPSIPay  $
-
   $
-
   $
-
   $1,401,491 
v3.24.1.u1
Equity Method Investment (Tables)
 12 Months Ended
Dec. 31, 2023
Equity Method Investment [Abstract]  
Schedule of Equity Method Investments The Company accounts for its investment in IPSIPay Express in accordance with ASC 323, Investments – Equity Method and Joint Ventures, the movement in equity method investments related to IPSIPay Express for the period ended December 31, 2023 is as follow:
   December 31,
2023		 
Cash contribution to IPSIPay Express  $999,000 
Fair value of warrants issued to third party joint venture partners   108,220 
    1,107,220 
Equity loss from joint venture   (403,282)
   $703,938 
v3.24.1.u1
Leases (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Schedule of Total Lease Cost Individual components of the total lease cost incurred by the Company is as follows:
   Year ended December 31,
2023		   Year ended December 31,
2022		 
Operating lease expense  $40,704   $57,600 
Schedule of Other Lease Information Other lease information:
   Year ended December 31,
2023		   Year ended December 31,
2022		 
Cash paid for amounts included in the measurement of lease liabilities        
Operating cash flows from operating leases  $(40,704)  $(57,600)
           
Remaining lease term – operating lease   -    Monthly 
v3.24.1.u1
Notes Payable (Tables)
 12 Months Ended
Dec. 31, 2023
Notes Payable [Abstract]  
Schedule of Notes Payable Notes payable consists of the following:
Description  Interest
Rate		   Maturity
date		  Principal   Accrued
Interest		   December 31, Amount, net  

December 31,
2022
Amount,

net

 
Cavalry Fund I LP   10%  April 30, 2024   482,000    49,004    531,004    482,134 
Mercer Street Global Opportunity Fund, LLC   10%  April 30, 2024   482,000    49,003    531,003    482,134 
Total convertible notes payable          $964,000   $98,007   $1,062,007   $964,268 
v3.24.1.u1
Convertible Notes Payable (Tables)
 12 Months Ended
Dec. 31, 2023
Convertible Notes Payable [Abstract]  
Schedule of Convertible Notes Payable Convertible notes payable consists of the following:
Description   Interest
Rate		     Maturity
date		   Principal     Accrued
Interest		     Unamortized
debt discount		     December 31,
2023
Amount,
net		     December  31,
2022
Amount,
net		  
Cavalry Fund I LP     10.00 %   April 30, 2024     898,980       10,238       -       909,218       1,133,301  
                                                     
Mercer Street Global 
Opportunity Fund, LLC		     10.00 %   April 30, 2024     991,754       148,010       -       1,139,764       1,133,301  
                                                     
Red Road Holdings Corporation     29.32 *%   June 15, 2024     101,679       1,393       (61,301 )     41,771       -  
      27.77 *%   July 30 2024     66,606       1,622       (49,545 )     18,683       -  
      32.04 *%   September 30, 2024     63,250       668       (60,809 )     3,109       -  
                                                     
2023 convertible notes      8.00 to 12.00 %   December 31, 2023 to September 14, 2024     2,026,666       80,916       (515,847 )     1,591,735       -  
                                                     
Total convertible notes payable               $ 4,148,935     $ 242,847     $ (687,502 )   $ 3,704,280     $ 2,266,602  
*The red Road Holdings Corporation interest rate is an effective interest rate as these convertible notes have a fixed interest charge which is earned on the issuance date, regardless of when payments are made.
v3.24.1.u1
Derivative Liability (Tables)
 12 Months Ended
Dec. 31, 2023
Derivative Liability [Abstract]  
Schedule of Assumptions were used in the Black-Scholes Valuation Model The following assumptions were used in the Black-Scholes valuation model:
   Year ended
December 31,
2023		   Year ended
December 31,
2022		 
Conversion price  $ 0.104 to $0.345     $ 0.345 to $4.50   
Risk free interest rate   3.60 to 5.55 %    0.79 to 4.73 %
Expected life of derivative liability   3.5 to 47 months     1.5 to 59 months  
Expected volatility of underlying stock    158.72 to 217.01 %   120.49 to 258.3 %
Expected dividend rate   0%   0%
Schedule of Movement in Derivative Liability The movement in derivative liability is as follows:
   December 31,
2023		   December 31,
2022		 
Opening balance  $2,550,642   $407,161 
Derivative financial liability arising from convertible note and warrants   385,000    238,182 
Derivative financial liability arising on note amendment included in loss on convertible notes   
-
    2,317,051 
Fair value adjustment to derivative liability   (1,501,446)   (411,752)
   $1,434,196   $2,550,642 
v3.24.1.u1
Stockholders’ Equity (Tables)
 12 Months Ended
Dec. 31, 2023
Stockholders’ Equity (Tables) [Line Items]  
Schedule of Restricted Stock Activity A summary of restricted stock activity during the period January 1, 2022 to December 31, 2023 is as follows:
   Total
restricted
shares*		   Weighted
average
fair market
value per
share*		   Total
unvested
restricted
shares*		   Weighted
average
fair market
value per
share*		   Total vested
restricted
shares*		   Weighted
average
fair market
value per share*		 
Outstanding January 1, 2022   716,500   $1.47    341,583   $1.47    374,917   $1.47 
Granted and issued   66,667    1.65    -    -    66,667    1.65 
Forfeited/Cancelled   -    -    -    -    -    - 
Vested   -    -    (170,791)   (1.47)   170,791    1.47 
Outstanding December 31, 2022   783,167   $1.50    170,792   $1.47    612,375   $1.50 
Granted and issued   -    -    -    -    -    - 
Forfeited/Cancelled   -    -    -    -    -    - 
Vested   -    -    (170,792)   (1.47)   170,792    1.47 
Outstanding December 31, 2023   783,167   $1.50    -   $-    783,167   $1.50 
* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
Schedule of Restricted Stock Granted Issued and Exercisable The restricted stock granted, issued and exercisable at December 31, 2023 is as follows:
    Restricted Stock
Granted and
Vested		 
Grant date Price   Number
Granted*		   Weighted Average Fair
Value per
Share*		 
$1.47    683,167   $1.47 
$1.50    33,333    1.50 
$1.65    66,667    1.65 
      783,167   $1.50 
* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
Schedule of Fair Value of the Warrants Granted and Issued The fair value of the warrants granted and issued, as described above, were determined by using a Black Scholes valuation model using the following assumptions:
   Year ended
December 31,
2023		 
Exercise price  $ 0.345 to 0.45   
Risk free interest rate    3.77 to 4.86 %
Expected life    5 years   
Expected volatility of underlying stock    187.40 to 192.80 %
Expected dividend rate   0%
Options [Member]  
Stockholders’ Equity (Tables) [Line Items]  
Schedule of Warrant Activity A summary of option activity during the period January 1, 2022 to December 31, 2023 is as follows:
   Shares
Underlying
options*		   Exercise
price per
share*		   Weighted
average
exercise
price*		 
Outstanding January 1, 2022   1,017,223   $4.50 to 12.00   $4.50 
Granted   526,668    1.20 – 4.50    4.20 
Forfeited/Cancelled   
-
    
-
    
-
 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2022   1,543,891   $1.20 to 12.00   $4.47 
Granted   
-
    
-
    
-
 
Forfeited/Cancelled   (23,889)  $1.20 to 12.00    5.41 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2023   1,520,002   $1.20 to 12.00   $4.46 
*After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
Schedule of Warrants Outstanding and Exercisable The options outstanding and exercisable at December 31, 2023 are as follows:
    Options Outstanding*   Options Exercisable* 
Exercise  Price*   Number
Outstanding*		   Weighted
Average
Remaining
Contractual
life in years		   Weighted
Average
Exercise
Price*		   Number
Exercisable*		   Weighted
Average
Exercise
Price*		   Weighted
Average
Remaining
Contractual
life in years		 
$1.20    20,001    5.86         20,001         5.86 
$4.50    1,500,001    7.94         1,388,890         7.96 
      1,520,002    7.91   $4.46    1,408,891   $4.45    7.93 
Warrant [Member]  
Stockholders’ Equity (Tables) [Line Items]  
Schedule of Warrant Activity A summary of warrant activity during the period January 1, 2022 to December 31, 2023 is as follows:
   Shares
Underlying
Warrants*		   Exercise
price per
share*		   Weighted
average
exercise
price*		 
Outstanding January 1, 2022   1,243,477   $ 1.50 – 5.625     $3.60 
Granted   1,700,000     0.345 – 1.035     0.5478 
Increase in warrants due to debt amendment full rachet trigger   2,408,696    0.345    0.345 
Cancelled on debt amendment   (165,797)   4.50    4.50 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2022   5,186,376   $0.345 – 5.625   $0.9000 
Granted   6,289,051     0.345 – 1.50    0.3556 
Forfeited   (33,334)   1.50    1.5000 
Cancelled on disposal of investment in Frictionless and Beyond Fintech   (1,000,000)   0.345    0.3450 
Exercised   
-
    
-
    
-
 
Outstanding December 31, 2023   10,442,093   $0.345 – 5.625    $0.6265 
* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.

 
Schedule of Warrants Outstanding and Exercisable The warrants outstanding and exercisable at December 31, 2023 are as follows:
      Warrants Outstanding*     Warrants Exercisable*  
Exercise Price*     Number
Outstanding*		     Weighted
Average
Remaining
Contractual
life in years		     Weighted
Average
Exercise
Price*		     Number
Exercisable*		     Weighted
Average
Exercise
Price*		     Weighted
Average
Remaining
Contractual
life in years		  
$ 0.345       9,055,642       4.16               9,055,642               4.16  
$ 0.450       266,668       4.48               266,668               4.48  
$ 1.035       500,000       1.52               437,500               1.52  
$ 1.500       33,334       4.62               33,334               4.62  
$ 4.50       505,560       2.21               505,560               2.21  
$ 5.625       80,889       2.21               80,889               2.21  
          10,442,093       3.94     $ 0.6265       10,379,593     $ 0.6240       3.95  
* After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Loss on Convertible Notes (Tables)
 12 Months Ended
Dec. 31, 2023
Loss on Convertible Notes [Abstract]  
Schedule of the Loss on Convertible Notes The loss on convertible notes consists of the following:
   December 31,
2023		   December 31,
2022		 
Penalty on cash settlement of convertible note  $9,306   $247,063 
Expense on extension of maturity date of convertible notes   64,256    836,414 
Fair value of warrants issued to convertible note holders on extension of maturity date   
-
    238,182 
Fair value of derivative liability arising on the amendment of the exercise price of convertible notes and the full-rachet trigger on certain warrants issued to convertible note holders   
-
    2,360,658 
Value of notes exchanged for certain warrants, net of the derivative liability value of $(43,608)   
-
    920,392 
   $73,562   $4,602,709 
v3.24.1.u1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Taxes [Abstarct]  
Schedule of Provision for Income Taxes The provision for income taxes consists of the following:
   Year ended
December 31,
2023		   Year ended
December 31, 
2022		 
Current          
Federal  $
         
   $
           
 
State   
-
    
-
 
Foreign   
-
    
-
 
   $
-
   $
-
 
Deferred          
Federal  $
-
   $
-
 
State   
-
    
-
 
Foreign   
-
    
-
 
   $
-
   $
-
 
Schedule of Reconciliation of the U.S. Federal Statutory Income Tax A reconciliation of the U.S. Federal statutory income tax to the effective income tax is as follows:
   Year ended
December 31,
2023		   Year ended
December 31,
2022		 
Continuing operations        
Tax expense at the federal statutory rate  $(1,225,845)  $(2,169,599)
State tax expense, net of federal tax effect   (170,564)   (324,289)
Permanent differences   712,951    1,194,446 
Prior year net operating loss true up   (228,714)   (3,277)
    (912,172)   (1,302,719)
Deferred income tax asset valuation allowance   912,172    1,302,719 
   $
-
   $
-
 
Schedule of Deferred Income Tax Assets Significant components of the Company’s deferred income tax assets are as follows:
   December 31,
2023		   December 31,
2022		 
Other  $241,491   $241,491 
Capital loss   491,275    - 
Net operating losses   6,900,076    6,479,181 
Stock based compensation   511,142    511,142 
Valuation allowance   (8,143,986)   (7,231,814)
Net deferred income tax assets  $
-
   $
-
 
v3.24.1.u1
Equity Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2023
Equity Based Compensation [Abstract]  
Schedule of Equity Based Compensation Equity based compensation is made up of the following:
   Year ended
December 31,
2023		   Year ended
December 31,
2022		 
Incentive stock awards  $377,856   $1,594,746 
Securities issued for services rendered   144,828    333,000 
   $522,684   $1,927,746 
v3.24.1.u1
Net Loss Per Share (Tables)
 12 Months Ended
Dec. 31, 2023
Net Loss Per Share [Abstract]  
Schedule of Dilutive Shares Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive for the years ended December 31, 2023 and 2022 are as follows:
   Year ended
December 31, 
2023
(Shares)		   Year ended
December 31, 
2022
(Shares)		 
Convertible debt   13,363,993    6,569,863 
Stock options   1,520,002    1,543,891 
Warrants to purchase shares of common stock   10,442,093    5,186,375 
    25,326,088    13,300,129 
v3.24.1.u1
Organization and Description of Business (Details) - USD ($)
 1 Months Ended 12 Months Ended
Dec. 14, 2023
Sep. 01, 2023
Aug. 11, 2023
Aug. 04, 2023
Jun. 21, 2023
May 12, 2023
Dec. 30, 2022
Jun. 21, 2021
Dec. 31, 2019
Nov. 01, 2019
Dec. 28, 2022
Aug. 26, 2021
Dec. 31, 2023
Dec. 31, 2022
Organization and Description of Business [Line Items]                            
Common stock, par value (in Dollars per share) [1]                         $ 0.0001 $ 0.0001
Aggregate shares of common stock             30,000,000           621,920  
Aggregate of shares of common stock                         2,500  
Retained shares of common stock                         500,000  
Reverse stock split description                   the Company filed a Certificate of Change with the Secretary of State of the State of Nevada to effect a reverse split of the then outstanding Common Stock at a ratio of 1-for-10, effective on November 1, 2019 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each ten pre-split shares of Common Stock outstanding automatically combined into one new share of Common Stock without any further action on the part of the holders        
Shares percentage                 9.00%          
Capital contribution (in Dollars)                         $ 1,500,000  
Percentage of membership interest                         11.11%  
Joint venture percentage                         22.00%  
Shares of common stock                         1,333,334  
Exercise price per share (in Dollars per share) $ 0.345   $ 1.5       $ 1.2       $ 0.0115   $ 0.345  
Common stock outstanding percentage                         40.00%  
Percentage of remaining shares owned                       49.00%    
Beyond fintech shares (in Dollars)                         $ 250,000  
Proceeds from impairment (in Dollars)           $ 231,431                
Beyond Fintech [Member]                            
Organization and Description of Business [Line Items]                            
Aggregate shares of common stock             1,000,000              
Ownership percentage           51.00%           51.00%    
Stock Purchase Agreement [Member]                            
Organization and Description of Business [Line Items]                            
Stock purchase agreement                 2,250,000          
Maximum [Member]                            
Organization and Description of Business [Line Items]                            
Aggregate of shares of common stock                   320,477,867        
Minimum [Member]                            
Organization and Description of Business [Line Items]                            
Aggregate of shares of common stock                   32,047,817        
Share-Based Payment Arrangement, Tranche One [Member]                            
Organization and Description of Business [Line Items]                            
Payments (in Dollars)       $ 300,000                    
Share-Based Payment Arrangement, Tranche Two [Member]                            
Organization and Description of Business [Line Items]                            
Payments (in Dollars)   $ 500,000                        
Share-Based Payment Arrangement, Tranche Three [Member]                            
Organization and Description of Business [Line Items]                            
Payments (in Dollars)   $ 500,000                        
IPEX Warrant [Member]                            
Organization and Description of Business [Line Items]                            
Shares of common stock                         133,334  
Exercise price per share (in Dollars per share)                         $ 0.45  
Common Stock [Member]                            
Organization and Description of Business [Line Items]                            
Common stock, par value (in Dollars per share)                         $ 0.0001  
Common stock shares holder current                         500,000  
Common stock outstanding, percentage                         91.00%  
Innovative Payment Solutions, Inc [Member]                            
Organization and Description of Business [Line Items]                            
Date of incorporation                         May 12, 2016  
Three Tranches [Member]                            
Organization and Description of Business [Line Items]                            
Capital contribution (in Dollars)                         $ 500,000  
Tranche [Member]                            
Organization and Description of Business [Line Items]                            
Payments (in Dollars)         $ 200,000                  
Shares of common stock                         199,999  
Second Tranche [Member]                            
Organization and Description of Business [Line Items]                            
Shares of common stock                         166,667  
Third Tranche [Member]                            
Organization and Description of Business [Line Items]                            
Shares of common stock                         166,667  
Business Combination [Member]                            
Organization and Description of Business [Line Items]                            
Acquired interest                         1.00%  
Qpagos Corporation’s Capital Stock [Member]                            
Organization and Description of Business [Line Items]                            
Aggregate shares of common stock                         4,992,900  
Qpagos Corporation’s Capital Stock [Member] | Common Stock [Member]                            
Organization and Description of Business [Line Items]                            
Aggregate shares of common stock                         497,500  
Vivi Holdings, Inc [Member]                            
Organization and Description of Business [Line Items]                            
Exchange shares                 2,250,000          
Gaston Pereira [Member]                            
Organization and Description of Business [Line Items]                            
Shares percentage                 5.00%          
Andrey Novikov [Member]                            
Organization and Description of Business [Line Items]                            
Shares percentage                 2.50%          
Joseph Abrams [Member]                            
Organization and Description of Business [Line Items]                            
Shares percentage                 1.50%          
Frictionless Financial Technologies, Inc.[Member]                            
Organization and Description of Business [Line Items]                            
Variable interest entity ownership percentage               10.00%            
Common stock outstanding percentage                         41.00%  
Purchase price (in Dollars)                         $ 300,000  
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Accounting Policies and Estimates (Details)
 12 Months Ended
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Accounting Policies and Estimates [Abstract]    
Operating segment 1  
Federally insured limit $ 0 $ 120,580
Impairment charge 1
Plant and equipment costs 1,000  
Revenues $ 410 $ 847
Beyond Fintech Inc. [Member]    
Accounting Policies and Estimates [Abstract]    
Ownership percentage 51.00%  
Long Term Investment [Member]    
Accounting Policies and Estimates [Abstract]    
Ownership percentage 20.00%  
v3.24.1.u1
Accounting Policies and Estimates (Details) - Schedule of Estimated Useful Lives of the Assets
 12 Months Ended
Dec. 31, 2023
Kiosks [Member]  
Property, Plant and Equipment [Line Items]  
Equipment, useful Life 7 years
Computer Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Equipment, useful Life 3 years
Leasehold Improvements [Member]  
Property, Plant and Equipment [Line Items]  
Leasehold improvements Lesser of estimated useful life or life of lease
Office Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Equipment, useful Life 10 years
v3.24.1.u1
Liquidity Matters and Going Concern (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Liquidity Matters and Going Concern [Abstract]    
Net loss $ (5,837,357) $ (10,331,424)
v3.24.1.u1
Disposal of Investment in Frictionless and Beyond Fintech (Details) - USD ($)
May 12, 2023
Dec. 31, 2022
Aug. 26, 2021
Disposal of Investment in Frictionless and Beyond Fintech (Details) [Line Items]      
Warrants to purchase of common stock (in Shares) 1,000,000 1,304,348  
Consideration received (in Dollars) $ 250,000    
Credit rate 20.00%    
Ownership [Member]      
Disposal of Investment in Frictionless and Beyond Fintech (Details) [Line Items]      
Minority interest ownership percentage 10.00%    
Beyond Fintech [Member]      
Disposal of Investment in Frictionless and Beyond Fintech (Details) [Line Items]      
Minority interest ownership percentage 51.00%   51.00%
v3.24.1.u1
Disposal of Investment in Frictionless and Beyond Fintech (Details) - Schedule of Assets and Liabilities - Frictionless And Beyond Fintech [Member]
May 12, 2023
USD ($)
Current Assets  
Cash $ 339
Non-current assets  
Intangible assets 327,211
Security deposit 15,000
Investment 500,000
Total Non-Current Assets 842,211
Total assets 842,550
Current Liabilities  
Accounts payable 97,126
Net assets sold 745,424
Proceeds due on disposal (250,000)
Net loss on disposal $ 495,424
v3.24.1.u1
Novation of Certain Assets and Liabilites (Details) - Schedule of Assets and liabilities Novated - Novation [Member]
Sep. 05, 2023
USD ($)
Current Assets  
Receivable on sale of subsidiary $ 231,431
Non-current assets  
Intangible assets 1,098,598
Total assets 1,330,029
Current Liabilities  
Accounts payable 263,864
Net loss on novation $ 1,066,165
v3.24.1.u1
Discontinued Operations (Details) - Schedule of Assets and Liabilities - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Current assets    
Cash   $ 943
Non-current assets    
Intangibles, net   291,320
Investment   500,000
Security deposit   15,000
Assets held for sale 807,263
Current liabilities    
Accounts payable   33,810
Liabilities held for sale $ 33,810
v3.24.1.u1
Discontinued Operations (Details) - Schedule of Statement of Operations from Discontinued Operations - Discontinued Operations [Member] - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Condensed Statement of Income Captions [Line Items]    
Net Revenue
Cost of Goods Sold
Gross loss
General and administrative 40,821 88,300
Depreciation and amortization
Total Expense 40,821 88,300
Loss from operations before income taxes (40,821) (88,300)
Income Taxes
Loss from discontinued operations, net of taxation $ (40,821) $ (88,300)
v3.24.1.u1
Intangibles (Details) - USD ($)
 1 Months Ended 9 Months Ended 12 Months Ended
Aug. 26, 2021
Sep. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Intangibles [Line Items]          
Gross proceeds $ 250,000       $ 375,000
Intangible assets        
IPSIPay software amount   $ 44,405   $ 1,127,400  
Amortization expense     $ 347,298 100,909  
Software [Member]          
Intangibles [Line Items]          
Intangible assets   $ 35,891   $ 41,320  
Beyond Fintech [Member]          
Intangibles [Line Items]          
Ownership percentage 51.00%        
Frictionless [Member]          
Intangibles [Line Items]          
Ownership percentage 49.00%        
v3.24.1.u1
Intangibles (Details) - Schedule of Facilitate the Functioning of the IPSIPay Software - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Schedule of Facilitate the Functioning of the IPSIPay Software [Abstract]    
Cost  
Accumulated amortization  
Net Book Value $ 1,401,491
v3.24.1.u1
Equity Method Investment (Details)
Dec. 31, 2023
USD ($)
Equity Method Investment [Abstract]  
Capital contribution initial tranche amount $ 500,000
Capital contribution second tranche amount $ 500,000
v3.24.1.u1
Equity Method Investment (Details) - Schedule of Equity Method Investments - IPSIPay Express [Member]
 12 Months Ended
Dec. 31, 2023
USD ($)
Schedule of Equity Method Investments [Line Items]  
Cash contribution to IPSIPay Express $ 999,000
Fair value of warrants issued to third party joint venture partners 108,220
Equity total 1,107,220
Equity loss from joint venture (403,282)
Joint venture total $ 703,938
v3.24.1.u1
Investments (Details)
May 12, 2023
Investment in Frictionless Financial Technologies Inc. [Member]  
Investment [Line Items]  
Ownership interest 10.00%
v3.24.1.u1
Leases (Details) - USD ($)
 12 Months Ended
Jan. 01, 2023
Dec. 31, 2023
Leases [Abstract]    
Lease, description   The lease commenced on April 1, 2021 and is for a twelve-month period, terminating on April 1, 2022.
Operating lease payment   $ 4,800
Rent payments $ 5,088  
v3.24.1.u1
Leases (Details) - Schedule of Total Lease Cost - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]    
Operating lease expense $ 40,704 $ 57,600
v3.24.1.u1
Leases (Details) - Schedule of Other Lease Information - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities    
Operating cash flows from operating leases $ (40,704) $ (57,600)
Remaining lease term – operating lease Monthly
v3.24.1.u1
Federal Relief Loans (Details) - Small Business Economic Injury Disaster Loan [Member] - USD ($)
 12 Months Ended
Jul. 07, 2020
Dec. 31, 2023
Dec. 31, 2022
Federal Relief Loans [Line Items]      
Loan amount $ 150,000    
Interest rate 3.75%    
Loan monthly payment $ 731    
Aggregate principal amount interest   $ 9,369 $ 13,978
v3.24.1.u1
Notes Payable (Details) - USD ($)
 1 Months Ended 12 Months Ended
Feb. 16, 2021
Dec. 20, 2023
Dec. 31, 2023
Dec. 31, 2022
May 12, 2023
Sep. 13, 2022
Debt Instrument [Line Items]            
Warrants issued to purchase of common stock (in Shares)       1,304,348 1,000,000  
Exercise price (in Dollars per share) $ 0.24         $ 1.2
Non-convertible promissory notes $ 482,000          
Interest expense   $ 2,514 $ 97,739 $ 268    
Amendment Transaction [Member]            
Debt Instrument [Line Items]            
Interest rate     10.00%      
Non-convertible promissory notes       $ 482,000    
Notes issued     $ 964,000      
Maturity date     Dec. 30, 2023      
Conversion shares issued (in Shares)     51,901,711      
Warrant [Member]            
Debt Instrument [Line Items]            
Warrants issued to purchase of common stock (in Shares) 2,486,957          
Warrants     $ 43,608      
Cavalry and Mercer [Member]            
Debt Instrument [Line Items]            
Interest rate 12.50%          
Debt principal amount $ 572,000          
Convertible Debt [Member]            
Debt Instrument [Line Items]            
Convertible debt     $ 920,392      
Cavalry Fund I LP [Member]            
Debt Instrument [Line Items]            
Company received 500,500          
Mercer Street Global Opportunity Fund, LLC [Member]            
Debt Instrument [Line Items]            
Company received $ 500,500          
v3.24.1.u1
Notes Payable (Details) - Schedule of Notes Payable - Note Payable [Member] - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Principal $ 964,000  
Accrued Interest 98,007  
Amount, net $ 1,062,007 $ 964,268
Cavalry Fund I LP [Member]    
Debt Instrument [Line Items]    
Interest Rate 10.00%  
Maturity date Apr. 30, 2024  
Principal $ 482,000  
Accrued Interest 49,004  
Amount, net $ 531,004 482,134
Mercer Street Global Opportunity Fund, LLC [Member]    
Debt Instrument [Line Items]    
Interest Rate 10.00%  
Maturity date Apr. 30, 2024  
Principal $ 482,000  
Accrued Interest 49,003  
Amount, net $ 531,003 $ 482,134
v3.24.1.u1
Convertible Notes Payable (Details) - USD ($)
 1 Months Ended 12 Months Ended
Dec. 14, 2023
Nov. 20, 2023
Oct. 19, 2023
Sep. 09, 2023
Aug. 30, 2023
Aug. 24, 2023
Aug. 11, 2023
Aug. 03, 2023
Jun. 13, 2023
May 19, 2023
May 10, 2023
Dec. 30, 2022
Feb. 03, 2022
Feb. 16, 2021
Dec. 20, 2023
Jun. 20, 2023
Dec. 28, 2022
Nov. 16, 2022
Dec. 31, 2023
Dec. 31, 2022
Sep. 14, 2023
May 12, 2023
Jul. 08, 2022
Convertible Notes Payable [Line Items]                                              
Maturity date                         Aug. 16, 2022 Dec. 30, 2023                  
Interest rate percentage                           10.00%                  
Exercise price per share (in Dollars per share) $ 0.345           $ 1.5         $ 1.2         $ 0.0115   $ 0.345        
Shares of common stock (in Shares)                                       3,000,000     66,667
Warrant exercisable (in Shares)                                       1,304,348   1,000,000  
Non-convertible promissory notes                           $ 482,000                  
Common stock price per share (in Dollars per share)                       1.8                      
Aggregate amount                                 $ 2,264,784            
Convertible notes                                     $ 836,414        
Black-scholes valuation model                                     1,499,577        
Convertible note holders                                     $ 238,182        
Warrant share (in Shares)                                     (43,608)        
Value of notes                                     $ 964,000        
Holders amount                                     841,003        
Interest expense                                     319,543 $ 193,886      
Amortization of debt discount total                                     770,372 263,200      
Converted interest                                     432,500      
Common stock conversion price (in Shares)   963,769       963,769                                  
Loss on conversion           $ 42,210                                  
Outstanding principal amount                             $ 62,857                
Interest                             $ 2,514       97,739 268      
Issuance of convertible note                 $ 62,700                            
Bearing interest rate                 17.33%                            
Settlement penalty                                     (73,562) (4,602,709)      
Net of unamortized debt discount                                     $ 687,503 $ 263,200      
Aggregate of gross proceeds received                                         $ 2,026,666    
Purchase of aggregate shares (in Shares)                                     5,696,586        
Beneficially own of percentage                                     4.99%        
Limitation exceeds of percentage                                     9.99%        
Exercise price per share (in Dollars per share) $ 0.345                                            
Cavalry Fund I LP [Member]                                              
Convertible Notes Payable [Line Items]                                              
Interest rate percentage                           10.00%       20.00%          
Exercise price per share (in Dollars per share)                           $ 7.2       $ 4.5          
Warrant exercisable (in Shares)                           82,899                  
Purchase an additional shares (in Shares)                                   100,000          
Net proceeds                           $ 500,500                  
Original issue discount                           71,500                  
Senior secured convertible note                           $ 572,000                  
Initial conversion price per share (in Dollars per share)                           $ 0.23                  
Converted interest           $ 139,726                                  
Common stock conversion price (in Shares)   192,774                                          
Conversion price per share (in Dollars per share)   $ 0.345       $ 0.345                                  
Accrued interest                                     $ 909,218        
Mercer Street Global Opportunity Fund, LLC [Member]                                              
Convertible Notes Payable [Line Items]                                              
Interest rate percentage                                   20.00%          
Exercise price per share (in Dollars per share)                           $ 7.2       $ 4.5          
Warrant exercisable (in Shares)                           82,899                  
Purchase an additional shares (in Shares)                                   100,000          
Net proceeds                           $ 500,500                  
Original issue discount                           572,000                  
Senior secured convertible note                           $ 71,500                  
Accrued interest                                     1,139,764        
Original issue discount rate                           10.00%                  
Conversion price (in Dollars per share)                           $ 6.9                  
Mercer Converted [Member]                                              
Convertible Notes Payable [Line Items]                                              
Converted interest         $ 100,000         $ 100,000                          
Common stock conversion price (in Shares)         289,856         289,856                          
Conversion price per share (in Dollars per share)         $ 0.345         $ 0.345                          
Loss on conversion                   $ 48,551                          
Quick Capital, LLC [Member]                                              
Convertible Notes Payable [Line Items]                                              
Exercise price per share (in Dollars per share)                               $ 0.345              
Warrant exercisable (in Shares)                               182,194              
Net proceeds                               $ 50,000              
Original issue discount                               62,857              
Senior secured convertible note                               $ 12,857              
Original issue discount rate                               8.00%              
Conversion price (in Dollars per share)                               $ 0.345              
Diagonal Street Lending LLC [Member]                                              
Convertible Notes Payable [Line Items]                                              
Net proceeds                     $ 100,000                        
Original issue discount                     117,320                        
Senior secured convertible note                     $ 17,320                        
Accrued interest                                     41,772        
Original issue discount rate                     13.00%                        
Variable conversion rate percentage                 60.00%   60.00%                        
Convertible notes owing amount               $ 194,386                              
Principal amount               180,020                              
Settlement penalty               9,306                              
Interest thereon               $ 5,060                              
Net of unamortized debt discount                                     61,301        
Red Road Holdings Corporation [Member]                                              
Convertible Notes Payable [Line Items]                                              
Interest rate percentage     13.00% 13.00%                     15.00%                
Original issue discount     $ 73,450 $ 146,900                     $ 63,250                
Accrued interest                                     3,109        
Variable conversion rate percentage     60.00% 60.00%                     60.00%                
Net of unamortized debt discount                                     $ 60,809        
Effective interest rate     27.80% 29.30%                     32.00%                
Repayment debt     $ 9,222 $ 18,444                     $ 8,082                
Maximum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Interest rate percentage                                     12.00%        
Conversion price, per share (in Dollars per share)                       0.345                      
Minimum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Interest rate percentage                                     8.00%        
Conversion price, per share (in Dollars per share)                                     $ 0.15 $ 0.0115      
Warrant [Member]                                              
Convertible Notes Payable [Line Items]                                              
Additional shares of common stock (in Shares)                         100,000                    
Exercise price per share (in Dollars per share)                         $ 4.5       $ 0.345   [1] [1]      
Conversion price, per share (in Dollars per share)                       0.0115                      
Warrant exercisable (in Shares)                           2,486,957                  
Purchase an additional shares (in Shares)                           1,730,057                  
Accrued interest                                     $ 1,591,734        
Net of unamortized debt discount                                     $ 515,847        
Warrant [Member] | Maximum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price, per share (in Dollars per share)                       1.5                      
Warrant [Member] | Minimum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price, per share (in Dollars per share)                       0.05                      
Cavalry and Mercer [Member]                                              
Convertible Notes Payable [Line Items]                                              
Interest rate percentage                         20.00%                    
Additional shares of common stock (in Shares)                         3,000,000                    
Exercise price per share (in Dollars per share)                       0.04 $ 0.15                    
Conversion price, per share (in Dollars per share)                       0.0115             $ 0.345        
Shares of common stock (in Shares)                                       100,000      
Common stock price per share (in Dollars per share)                       0.06                      
Aggregate amount                                 $ 1,132,392            
Net proceeds                 $ 50,000                            
Original issue discount                 $ 12,700                            
Cavalry and Mercer [Member] | Maximum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price, per share (in Dollars per share)                       0.345             $ 4.5 $ 4.5      
Cavalry and Mercer [Member] | Minimum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price, per share (in Dollars per share)                       0.15               0.345      
Cavalry and Mercer [Member] | Warrant [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price, per share (in Dollars per share)                                       $ 0.15      
Cavalry/Mercer Note [Member]                                              
Convertible Notes Payable [Line Items]                                              
Additional Charge                                     $ 920,392        
Cavalry/Mercer Note [Member] | Minimum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price, per share (in Dollars per share)                                     $ 0.0115        
Cavalry Fund I LP [Member] | Maximum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price per share (in Dollars per share)                                   $ 4.5          
Cavalry Fund I LP [Member] | Minimum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price per share (in Dollars per share)                                   $ 0.345          
Mercer Street Global Opportunity Fund, LLC [Member] | Maximum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price, per share (in Dollars per share)                       4.5                      
Mercer Street Global Opportunity Fund, LLC [Member] | Minimum [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price, per share (in Dollars per share)                       $ 0.345                      
Convertible Note [Member]                                              
Convertible Notes Payable [Line Items]                                              
Conversion price, per share (in Dollars per share)                                     $ 0.345        
Accrued interest                             50,000                
Convertible Note [Member] | Diagonal Street Lending LLC [Member]                                              
Convertible Notes Payable [Line Items]                                              
Accrued interest     60,000 125,000                                      
Net of unamortized debt discount     $ 13,450 $ 21,900                                      
Convertible Note [Member] | Red Road Holdings Corporation [Member]                                              
Convertible Notes Payable [Line Items]                                              
Accrued interest                                     $ 18,683        
Net of unamortized debt discount                             $ 13,250       $ 49,545        
Common Stock [Member]                                              
Convertible Notes Payable [Line Items]                                              
Shares of common stock (in Shares)                                             2,000,000
Common Stock [Member] | Warrant [Member]                                              
Convertible Notes Payable [Line Items]                                              
Warrant exercisable (in Shares)                                       39,130,435      
Note Two [Member]                                              
Convertible Notes Payable [Line Items]                                              
Warrant exercisable (in Shares) 292,463                                            
Principal amount $ 225,000                                            
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Convertible Notes Payable (Details) - Schedule of Convertible Notes Payable - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Schedule of Convertible Notes Payable [Line Items]    
Principal $ 4,148,935  
Accrued Interest 242,847  
Unamortized debt discount (687,502)  
Total convertible notes payable $ 3,704,280 $ 2,266,602
Cavalry Fund I LP [Member]    
Schedule of Convertible Notes Payable [Line Items]    
Interest Rate 10.00%  
Maturity date April 30, 2024  
Principal $ 898,980  
Accrued Interest 10,238  
Total convertible notes payable $ 909,218 1,133,301
Mercer Street Global Opportunity Fund, LLC [Member]    
Schedule of Convertible Notes Payable [Line Items]    
Interest Rate 10.00%  
Maturity date April 30, 2024  
Principal $ 991,754  
Accrued Interest 148,010  
Total convertible notes payable $ 1,139,764 $ 1,133,301
Red Road Holdings Corporation [Member]    
Schedule of Convertible Notes Payable [Line Items]    
Interest Rate [1] 29.32%  
Maturity date June 15, 2024  
Principal $ 101,679  
Accrued Interest 1,393  
Unamortized debt discount (61,301)  
Total convertible notes payable $ 41,771  
Red Road Holdings Corporation One [Member]    
Schedule of Convertible Notes Payable [Line Items]    
Interest Rate [1] 27.77%  
Maturity date July 30 2024  
Principal $ 66,606  
Accrued Interest 1,622  
Unamortized debt discount (49,545)  
Total convertible notes payable $ 18,683  
Red Road Holdings Corporation Two [Member]    
Schedule of Convertible Notes Payable [Line Items]    
Interest Rate [1] 32.04%  
Maturity date September 30, 2024  
Principal $ 63,250  
Accrued Interest 668  
Unamortized debt discount (60,809)  
Total convertible notes payable $ 3,109  
2023 convertible notes [Member]    
Schedule of Convertible Notes Payable [Line Items]    
Maturity date December 31, 2023 to September 14, 2024  
Principal $ 2,026,666  
Accrued Interest 80,916  
Unamortized debt discount (515,847)  
Total convertible notes payable $ 1,591,735  
2023 convertible notes [Member] | Minimum [Member]    
Schedule of Convertible Notes Payable [Line Items]    
Interest Rate 8.00%  
2023 convertible notes [Member] | Maximum [Member]    
Schedule of Convertible Notes Payable [Line Items]    
Interest Rate 12.00%  
[1] The red Road Holdings Corporation interest rate is an effective interest rate as these convertible notes have a fixed interest charge which is earned on the issuance date, regardless of when payments are made.
v3.24.1.u1
Derivative Liability (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 20, 2023
Sep. 12, 2023
Jun. 13, 2023
May 10, 2023
Derivative Liability [Abstract]            
Rachet provision $ 474,614          
Convertible notes       $ 416,317 $ 150,000 $ 360,491
Net mark-to-market credit 1,501,446 $ 411,752        
Warrant [Member]            
Derivative Liability [Abstract]            
Derivative liability $ 2,317,051          
Black-Scholes [Member]            
Derivative Liability [Abstract]            
Convertible notes     $ 235,000      
v3.24.1.u1
Derivative Liability (Details) - Schedule of Assumptions were used in the Black-Scholes Valuation Model - $ / shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Expected dividend rate 0.00% 0.00%
Minimum [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Conversion price (in Dollars per share) $ 0.104 $ 0.345
Risk free interest rate 3.60% 0.79%
Expected life of derivative liability 3 months 15 days 1 month 15 days
Expected volatility of underlying stock 158.72% 120.49%
Maximum [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Conversion price (in Dollars per share) $ 0.345 $ 4.5
Risk free interest rate 5.55% 4.73%
Expected life of derivative liability 47 months 59 months
Expected volatility of underlying stock 217.01% 258.30%
v3.24.1.u1
Derivative Liability (Details) - Schedule of Movement in Derivative Liability - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Schedule of Movement in Derivative Liability [Abstract]    
Opening balance $ 2,550,642 $ 407,161
Derivative financial liability arising from convertible note and warrants 385,000 238,182
Derivative financial liability arising on note amendment included in loss on convertible notes 2,317,051
Fair value adjustment to derivative liability (1,501,446) (411,752)
Total $ 1,434,196 $ 2,550,642
v3.24.1.u1
Stockholders’ Equity (Details) - USD ($)
 1 Months Ended 12 Months Ended
Dec. 14, 2023
Nov. 20, 2023
Nov. 08, 2023
Aug. 11, 2023
May 19, 2023
Dec. 30, 2022
Sep. 13, 2022
Aug. 05, 2022
Aug. 01, 2022
Jul. 11, 2022
Feb. 03, 2022
Oct. 22, 2021
Jan. 01, 2021
Dec. 15, 2020
Aug. 31, 2023
Aug. 30, 2023
Aug. 24, 2023
Aug. 16, 2023
Dec. 28, 2022
Aug. 30, 2022
Dec. 31, 2023
Dec. 31, 2022
Jul. 08, 2022
Dec. 31, 2021
Feb. 16, 2021
Stockholders’ Equity (Details) [Line Items]                                                  
Common stock authorized [1]                                         750,000,000 750,000,000      
Common stock par value (in Dollars per share) [1]                                         $ 0.0001 $ 0.0001      
Common stock issued                 66,667                       13,819,889 [1] 12,563,426 [1]      
Common stock outstanding [1]                                         13,819,889 12,563,426      
Value of grant date (in Dollars)                 $ 84,000                                
Agreement fee (in Dollars)                 $ 3,000                                
Common stock shares                                           3,000,000 66,667    
Restricted shares               100,000   66,667       83,333                      
Common stock conversion shares   500,000 289,855   72,464                   144,928 2,838 173,914 72,464              
Convertible debt (in Dollars)   $ 172,500 $ 100,000   $ 25,000                   $ 50,000   $ 60,000 $ 25,000              
Shares vested                         1,000,000                        
Remaining vested shares                                         50,000        
Vested years                                         2 years        
Shares underlying warrants, granted                                         50,000        
Expense (in Dollars)                                         $ 0 $ 361,064      
Preferred stock, authorized                                         25,000,000 25,000,000      
Preferred stock, par value (in Dollars per share)                                         $ 0.0001 $ 0.0001      
Description of compensation service                                         (i) a cash endorsement fee of Three Hundred Thousand U.S. Dollars ($300,000 USD), payable as follows: (i) One Hundred Twenty-Five Thousand Dollars ($125,000) upon execution of the Endorsement Agreement, (ii) One Hundred Twenty-Five Thousand Dollars ($125,000) quarterly during the Term, beginning on the 90th day following the Effective Date, and (iii) Fifty Thousand Dollars ($50,000) on or prior to the first anniversary of the Effective Date and (ii) warrants exercisable for an aggregate of Five hundred thousand (500,000) shares of the Common Stock at an exercise price of $1.035 per share. The Warrants shall have a three-year term commencing from the Effective Date.        
Exercise price (in Dollars per share)             $ 1.2                                   $ 0.24
Expiration date                                       Aug. 30, 2027          
Note amendment transaction description                                         the Company entered into the December 2022 Note Amendment Transaction, as fully described in note 11 above. In terms of the Note Amendment Transaction the following occurred:   ● The warrants issued to Cavalry and Mercer exercisable for 165,798 shares of Common Stock (82,899 for each of Cavalry and Mercer), were exchanged for two promissory notes of $482,000 each, as disclosed in note 11 above;   ● The warrants issued to Cavalry and Mercer on August 30, 2022, were subject to repricing and a full rachet increase in the number of warrants issued, resulting in an increase in the number of warrants by 2,408,696 (1,204,348 to each Cavalry and Mercer) and a reset of the exercise price to $0.345 per share. The additional warrants were valued at $841,003 using a Black-Scholes valuation model and was expensed in the statement of operations as a component of the loss on convertible debt.   ● An additional 457,895 warrants previously issued to Mercer, Iroquois Master Fund and Bellridge Capital LP were subject to repricing of the exercise price from a range of $1.50 to $4.50 per share to $0.345 per share. The change in the fair value of these warrants of $20,079, using a Black-Scholes valuation model was recorded as a component of the loss on convertible debt.        
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number 292,463     33,334                                 33,334        
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share) $ 0.345     $ 1.5   $ 1.2                         $ 0.0115   $ 0.345        
Proceeds from Warrant Exercises (in Dollars) $ 225,000                                                
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Expirations in Period                                         1,000,000        
Limitation exceeds percentage                                         9.99%        
Purchase an aggregate shares                                         133,334        
Preferred stock, per share amounts of preferred dividends in arrears (in Dollars per share)                                         $ 0.45        
Purchase shares of common stock                                         166,667        
Additional purchase shares of common stock                                         166,667        
Aggregate purchase of common stock                                         1,333,334        
Warrants outstanding an intrinsic value (in Dollars)                                         $ 0 $ 0      
Incentive stock options                   500,000                              
Amount of immediate expense (in Dollars)                                           31,970      
Options exercisable shares             6,667                           716,666        
Intrinsic value outstanding options (in Dollars)                                         $ 0 0      
Option expense (in Dollars)                                         $ 377,856 $ 1,233,682      
Maximum [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Warrants beneficially percentage                                         4.99%        
Shares of common stock                                         26,667        
Warrant [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Purchased shares           1,000,000                                      
Fair value of warrants (in Dollars)           $ 348,938                                      
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)                     $ 4.5               $ 0.345   [2] [2]      
Purchase an aggregate shares                                         199,999        
Incentive stock options [2]                                         10,442,093 5,186,376   1,243,477  
Common Stock [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Common stock par value (in Dollars per share)                                         $ 0.0001        
Common stock issued                 2,000,000                                
Value of grant date (in Dollars)                                             $ 84,000    
Common stock shares                                             2,000,000    
Warrant exercisable                                       100,000          
Exercise price (in Dollars per share)           $ 0.345                           $ 4.5          
Options exercisable shares             26,668                           23,891        
Common Stock [Member] | Maximum [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Shares of common stock                                         100,000        
Chief Executive Officer [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Stock option exercise price (in Dollars per share)                   $ 4.5                              
Amount of immediate expense (in Dollars)                                           $ 823,854      
Debt Conversion Notices [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Aggregate shares of common stock                                         5,696,586        
Convertible debt amount (in Dollars)                                         $ 0.345        
2021 Stock Incentive Plan [Member] | Maximum [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Shares of common stock                       1,766,667                          
Restricted Stock [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Restricted shares                           2,500,000                      
Shares vested                         33,333                        
Remaining vested shares                                         1,500,000        
Shares underlying warrants, granted                                         1,500,000        
2018 Stock Incentive Plan [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Terminates period                                         10 years        
2021 Stock Incentive Plan [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Terminates period                       10 years                          
Richard Rosenblum [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Restricted shares                   2,000,000                              
Samad Harake [Member]                                                  
Stockholders’ Equity (Details) [Line Items]                                                  
Value of grant date (in Dollars)               $ 165,000   $ 110,000                              
Common stock shares               3,000,000                                  
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
[2] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Stockholders’ Equity (Details) - Schedule of Restricted Stock Activity - $ / shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Total restricted shares [Member]    
Stockholders’ Equity (Details) - Schedule of Restricted Stock Activity [Line Items]    
Total restricted shares, Outstanding at beginning [1] 783,167 716,500
Total restricted shares, Granted and issued [1] 66,667
Total restricted shares, Forfeited/Cancelled [1]
Total restricted shares, Vested [1]
Total restricted shares, Outstanding at ending [1] 783,167 783,167
Weighted average fair market value per share [Member]    
Stockholders’ Equity (Details) - Schedule of Restricted Stock Activity [Line Items]    
Weighted average fair market value per share, Outstanding at beginning [1] $ 1.5 $ 1.47
Weighted average fair market value per share, Granted and issued [1] 1.65
Weighted average fair market value per share, Forfeited/Cancelled [1]
Weighted average fair market value per share, Vested [1]
Weighted average fair market value per share, Outstanding at ending [1] $ 1.5 $ 1.5
Total unvested restricted shares [Member]    
Stockholders’ Equity (Details) - Schedule of Restricted Stock Activity [Line Items]    
Total unvested restricted shares, Outstanding at beginning [1] 170,792 341,583
Total unvested restricted shares, Granted and issued [1]
Total unvested restricted shares, Forfeited/Cancelled [1]
Total unvested restricted shares, Vested [1] (170,792) (170,791)
Total unvested restricted shares, Outstanding at ending [1] 170,792
Unvested restricted Weighted average fair market value per share [Member]    
Stockholders’ Equity (Details) - Schedule of Restricted Stock Activity [Line Items]    
Weighted average fair market value per share, Outstanding at beginning [1] $ 1.47 $ 1.47
Weighted average fair market value per share, Granted and issued [1]
Weighted average fair market value per share, Forfeited/Cancelled [1]
Weighted average fair market value per share, Vested [1] (1.47) (1.47)
Weighted average fair market value per share, Outstanding at ending [1] $ 1.47
Total vested restricted shares [Member]    
Stockholders’ Equity (Details) - Schedule of Restricted Stock Activity [Line Items]    
Total unvested restricted shares, Outstanding at beginning [1] 612,375 374,917
Total unvested restricted shares, Granted and issued [1] 66,667
Total unvested restricted shares, Forfeited/Cancelled [1]
Total unvested restricted shares, Vested [1] 170,792 170,791
Total unvested restricted shares, Outstanding at ending [1] 783,167 612,375
Vested restricted Weighted average fair market value per share [Member]    
Stockholders’ Equity (Details) - Schedule of Restricted Stock Activity [Line Items]    
Weighted average fair market value per share, Outstanding at beginning [1] $ 1.5 $ 1.47
Weighted average fair market value per share, Granted and issued [1] 1.65
Weighted average fair market value per share, Forfeited/Cancelled [1]
Weighted average fair market value per share, Vested [1] 1.47 1.47
Weighted average fair market value per share, Outstanding at ending [1] $ 1.5 $ 1.5
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Stockholders’ Equity (Details) - Schedule of Restricted Stock Granted, Issued and Exercisable
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
 [1]
Restricted stock granted and Vested, number granted | shares 783,167
Restricted stock granted and Vested, weighted average fair value per share (in Dollars per share) | $ / shares $ 1.5
Grant Date Price 1.47 [Member]  
Restricted stock granted and Vested, number granted | shares 683,167
Restricted stock granted and Vested, weighted average fair value per share (in Dollars per share) | $ / shares $ 1.47
Grant Date Price 0.50 [Member]  
Restricted stock granted and Vested, number granted | shares 33,333
Restricted stock granted and Vested, weighted average fair value per share (in Dollars per share) | $ / shares $ 1.5
Grant Date Price 1.65 [Member]  
Restricted stock granted and Vested, number granted | shares 66,667
Restricted stock granted and Vested, weighted average fair value per share (in Dollars per share) | $ / shares $ 1.65
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Stockholders’ Equity (Details) - Schedule of Fair Value of the Warrants Granted and Issued - Warrants [Member]
 12 Months Ended
Dec. 31, 2023
$ / shares
Stockholders’ Equity (Details) - Schedule of Fair Value of the Warrants Granted and Issued [Line Items]  
Expected life 5 years
Expected dividend rate 0.00%
Minimum [Member]  
Stockholders’ Equity (Details) - Schedule of Fair Value of the Warrants Granted and Issued [Line Items]  
Exercise price (in Dollars per share) $ 0.345
Risk free interest rate 3.77%
Expected volatility of underlying stock 187.40%
Maximum [Member]  
Stockholders’ Equity (Details) - Schedule of Fair Value of the Warrants Granted and Issued [Line Items]  
Exercise price (in Dollars per share) $ 0.45
Risk free interest rate 4.86%
Expected volatility of underlying stock 192.80%
v3.24.1.u1
Stockholders’ Equity (Details) - Schedule of Warrant Activity - Warrant [Member] - $ / shares
 1 Months Ended 12 Months Ended
Feb. 03, 2022
Dec. 28, 2022
Dec. 31, 2023
Dec. 31, 2022
Schedule of Warrant Activity [Line Items]        
Shares Underlying, Outstanding (in Shares) [1]     5,186,376 1,243,477
Weighted average exercise price, Outstanding [1]     $ 0.9 $ 3.6
Shares Underlying, Granted (in Shares) [1]     6,289,051 1,700,000
Weighted average exercise price, Granted [1]     $ 0.3556 $ 0.5478
Shares Underlying, Forfeited (in Shares) [1]     (33,334)  
Exercise price per share, Forfeited [1]     $ 1.5  
Weighted average exercise price, Forfeited [1]     $ 1.5  
Shares Underlying, Increase in warrants due to debt amendment full rachet trigger (in Shares) [1]       2,408,696
IExercise price per share, ncrease in warrants due to debt amendment full rachet trigger [1]       $ 0.345
Weighted average exercise price, Increase in warrants due to debt amendment full rachet trigger [1]       $ 0.345
Shares Underlying, Cancelled on disposal of investment in Frictionless and Beyond Fintech (in Shares) [1]     (1,000,000) (165,797)
Exercise price per share, Cancelled on disposal of investment in Frictionless and Beyond Fintech [1]     $ 0.345 $ 4.5
Weighted average exercise price, Cancelled on disposal of investment in Frictionless and Beyond Fintech [1]     $ 0.345 $ 4.5
Shares Underlying, Exercised (in Shares) [1]    
Exercise price per share, Exercised [1]    
Weighted average exercise price, Exercised $ 4.5 $ 0.345 [1] [1]
Shares Underlying, Outstanding (in Shares) [1]     10,442,093 5,186,376
Weighted average exercise price, Outstanding [1]     $ 0.6265 $ 0.9
Minimum [Member]        
Schedule of Warrant Activity [Line Items]        
Exercise price per share, Outstanding [1]     0.345 1.5
Exercise price per share, Granted [1]     0.345 0.345
Exercise price per share, Outstanding [1]     0.345 0.345
Maximum [Member]        
Schedule of Warrant Activity [Line Items]        
Exercise price per share, Outstanding [1]     5.625 5.625
Exercise price per share, Granted [1]     1.5 1.035
Exercise price per share, Outstanding [1]     $ 5.625 $ 5.625
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Stockholders’ Equity (Details) - Schedule of Warrants Outstanding and Exercisable - Warrant [Member]
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
Schedule of Warrants Outstanding and Exercisable [Line Items]  
Number Outstanding 10,442,093 [1]
Weighted Average Remaining Contractual life in years 3 years 11 months 8 days
Weighted Average Exercise Price (in Dollars per share) | $ / shares $ 0.6265 [1]
Number Exercisable 10,379,593 [1]
Weighted Average Exercise Price (in Dollars per share) | $ / shares $ 0.624 [1]
Weighted Average Remaining Contractual life in years 3 years 11 months 12 days
Exercise Price 0.345 [Member]  
Schedule of Warrants Outstanding and Exercisable [Line Items]  
Number Outstanding 9,055,642 [1]
Weighted Average Remaining Contractual life in years 4 years 1 month 28 days
Number Exercisable 9,055,642 [1]
Weighted Average Remaining Contractual life in years 4 years 1 month 28 days
Exercise Price 0.450 [Member]  
Schedule of Warrants Outstanding and Exercisable [Line Items]  
Number Outstanding 266,668 [1]
Weighted Average Remaining Contractual life in years 4 years 5 months 23 days
Number Exercisable 266,668 [1]
Weighted Average Remaining Contractual life in years 4 years 5 months 23 days
Exercise Price 1.035 [Member]  
Schedule of Warrants Outstanding and Exercisable [Line Items]  
Number Outstanding 500,000 [1]
Weighted Average Remaining Contractual life in years 1 year 6 months 7 days
Number Exercisable 437,500 [1]
Weighted Average Remaining Contractual life in years 1 year 6 months 7 days
Exercise Price 1.500 [Member]  
Schedule of Warrants Outstanding and Exercisable [Line Items]  
Number Outstanding 33,334 [1]
Weighted Average Remaining Contractual life in years 4 years 7 months 13 days
Number Exercisable 33,334 [1]
Weighted Average Remaining Contractual life in years 4 years 7 months 13 days
Exercise Price 4.50 [Member]  
Schedule of Warrants Outstanding and Exercisable [Line Items]  
Number Outstanding 505,560 [1]
Weighted Average Remaining Contractual life in years 2 years 2 months 15 days
Number Exercisable 505,560 [1]
Weighted Average Remaining Contractual life in years 2 years 2 months 15 days
Exercise Price 5.625 [Member]  
Schedule of Warrants Outstanding and Exercisable [Line Items]  
Number Outstanding 80,889 [1]
Weighted Average Remaining Contractual life in years 2 years 2 months 15 days
Number Exercisable 80,889 [1]
Weighted Average Remaining Contractual life in years 2 years 2 months 15 days
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Stockholders’ Equity (Details) - Schedule of Option Activity - Stock Option [Member] - $ / shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Stockholders’ Equity (Details) - Schedule of Option Activity [Line Items]    
Shares Underlying, Outstanding (in Shares) [1] 1,543,891 1,017,223
Weighted average exercise price, Outstanding [1] $ 4.47 $ 4.5
Shares Underlying, Outstanding (in Shares) [1] 1,520,002 1,543,891
Weighted average exercise price, Outstanding [1] $ 4.46 $ 4.47
Shares Underlying, Granted (in Shares) [1] 526,668
Exercise price per share, Granted [1]  
Weighted average exercise price, Granted [1] $ 4.2
Shares Underlying, Forfeited/Cancelled (in Shares) [1] (23,889)
Exercise price per share, Forfeited/Cancelled [1]  
Weighted average exercise price, Forfeited/Cancelled [1] $ 5.41
Shares Underlying, Exercised (in Shares) [1]
Exercise price per share, Exercised [1]
Weighted average exercise price, Exercised [1]
Minimum [Member]    
Stockholders’ Equity (Details) - Schedule of Option Activity [Line Items]    
Exercise price per share, Outstanding [1] 1.2 4.5
Exercise price per share, Outstanding [1] 1.2 1.2
Exercise price per share, Granted [1]   1.2
Exercise price per share, Forfeited/Cancelled [1] 1.2  
Maximum [Member]    
Stockholders’ Equity (Details) - Schedule of Option Activity [Line Items]    
Exercise price per share, Outstanding [1] 12 12
Exercise price per share, Outstanding [1] 12 12
Exercise price per share, Granted [1]   $ 4.5
Exercise price per share, Forfeited/Cancelled [1] $ 12  
[1] After giving effect to a 1 for 30 reverse stock split on August 30, 2023.
v3.24.1.u1
Stockholders’ Equity (Details) - Schedule of Options Outstanding and Exercisable - Option [Member]
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
Schedule of Options Outstanding and Exercisable [Line Items]  
Number Outstanding 1,520,002
Weighted Average Remaining Contractual life in years 7 years 10 months 28 days
Weighted Average Exercise Price (in Dollars per share) | $ / shares $ 4.46
Number Exercisable 1,408,891
Weighted Average Exercise Price (in Dollars per share) | $ / shares $ 4.45
Weighted Average Remaining Contractual life in years 7 years 11 months 4 days
Exercise Price One Point Two Zero [Member]  
Schedule of Options Outstanding and Exercisable [Line Items]  
Number Outstanding 20,001
Weighted Average Remaining Contractual life in years 5 years 10 months 9 days
Number Exercisable 20,001
Weighted Average Remaining Contractual life in years 5 years 10 months 9 days
Exercise Price Four Point Five Zero [Member]  
Schedule of Options Outstanding and Exercisable [Line Items]  
Number Outstanding 1,500,001
Weighted Average Remaining Contractual life in years 7 years 11 months 8 days
Number Exercisable 1,388,890
Weighted Average Remaining Contractual life in years 7 years 11 months 15 days
v3.24.1.u1
Loss on Convertible Notes (Details) - USD ($)
 1 Months Ended 12 Months Ended
Dec. 14, 2023
Aug. 03, 2023
Aug. 30, 2022
Feb. 04, 2022
Dec. 30, 2022
Dec. 31, 2023
Dec. 31, 2022
Debt Instrument [Line Items]              
Settlement penalty payment       $ 247,063      
Gross proceeds       $ 1,235,313      
Penalty expenses   $ 9,306          
Purchased shares 292,463   100,000        
Debt extinguishment           $ 64,256  
Aggregate amount           $ 836,414  
Exercise price         $ 0.345    
Stock issued         1,304,348    
Derivative liability         $ 20,079    
Non-convertible promissory notes         482,000    
Additional charge         $ 964,000    
Maximum [Member]              
Debt Instrument [Line Items]              
Conversion price, per share         $ 0.345    
Minimum [Member]              
Debt Instrument [Line Items]              
Conversion price, per share           $ 0.15 $ 0.0115
Warrant [Member]              
Debt Instrument [Line Items]              
Exercise price         0.0115    
Fair value     $ 238,182        
Conversion price, per share         0.0115    
Derivative liability           $ 43,608  
Warrant [Member] | Maximum [Member]              
Debt Instrument [Line Items]              
Conversion price, per share         1.5    
Warrant [Member] | Minimum [Member]              
Debt Instrument [Line Items]              
Conversion price, per share         0.05    
Cavalry and Mercer [Member]              
Debt Instrument [Line Items]              
Purchased shares     3,000,000        
Conversion price, per share         $ 0.0115 $ 0.345  
Stock issued         100,000    
Cavalry and Mercer [Member] | Maximum [Member]              
Debt Instrument [Line Items]              
Exercise price     $ 4.5        
Conversion price, per share         $ 0.345 $ 4.5 4.5
Cavalry and Mercer [Member] | Minimum [Member]              
Debt Instrument [Line Items]              
Exercise price     $ 0.15        
Conversion price, per share         $ 0.15   0.345
Cavalry and Mercer [Member] | Warrant [Member]              
Debt Instrument [Line Items]              
Conversion price, per share             $ 0.15
Common Stock [Member]              
Debt Instrument [Line Items]              
Stock issued         3,000,000    
Warrant Agreement [Member] | Cavalry and Mercer [Member]              
Debt Instrument [Line Items]              
Conversion price, per share         $ 4.5    
Note Amendment Letter Agreement [Member]              
Debt Instrument [Line Items]              
Maturity date         Dec. 30, 2023    
Warrant Agreement [Member]              
Debt Instrument [Line Items]              
Stock issued         39,130,435    
Black Scholes Valuation Model [Member]              
Debt Instrument [Line Items]              
Derivative liability         $ 2,340,580    
Black Scholes Valuation Model [Member] | Warrant [Member]              
Debt Instrument [Line Items]              
Derivative liability         $ 43,608    
v3.24.1.u1
Loss on Convertible Notes (Details) - Schedule of the Loss on Convertible Notes - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Schedule of the Loss on Convertible Notes [Abstract]    
Penalty on cash settlement of convertible note $ 9,306 $ 247,063
Expense on extension of maturity date of convertible notes 64,256 836,414
Fair value of warrants issued to convertible note holders on extension of maturity date 238,182
Fair value of derivative liability arising on the amendment of the exercise price of convertible notes and the full-rachet trigger on certain warrants issued to convertible note holders 2,360,658
Value of notes exchanged for certain warrants, net of the derivative liability value of $(43,608) 920,392
Loss on convertible notes $ 73,562 $ 4,602,709
v3.24.1.u1
Loss on Convertible Notes (Details) - Schedule of the Loss on Convertible Notes (Parentheticals)
Dec. 31, 2023
USD ($)
Schedule of the Loss on Convertible Notes [Abstract]  
Net of the derivative liability value $ (43,608)
v3.24.1.u1
Income Taxes (Details) - USD ($)
 12 Months Ended
Dec. 22, 2017
Dec. 31, 2023
Dec. 31, 2022
Income Taxes (Details) [Line Items]      
Marginal rate 35.00%    
Flat rate 21.00%    
Income tax rate 30.00%    
Net operating losses percentage 80.00%    
Valuation allowance for deferred income tax assets   $ 8,143,986 $ 7,231,814
Deferred income tax assets valuation allowance   $ 912,172 1,302,719
Federal term   3 years  
Income tax purposes federal   $ 26,800,000  
Income tax purposes state   19,000,000  
Net operating losses   $ 6,900,076 $ 6,479,181
Operating loss Carryforwards expiration year   2034  
Indefinite life tax   $ 23,300,000  
Operating Loss Carryforward [Member]      
Income Taxes (Details) [Line Items]      
Net operating losses   $ 3,500,000  
v3.24.1.u1
Income Taxes (Details) - Schedule of Provision for Income Taxes - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Current    
Federal
State
Foreign
Total current tax benefits
Deferred    
Federal
State
Foreign
Total deferred tax benefits
v3.24.1.u1
Income Taxes (Details) - Schedule of Reconciliation of the U.S. Federal Statutory Income Tax - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Continuing operations    
Tax expense at the federal statutory rate $ (1,225,845) $ (2,169,599)
State tax expense, net of federal tax effect (170,564) (324,289)
Permanent differences 712,951 1,194,446
Prior year net operating loss true up (228,714) (3,277)
Total Continuing operations (912,172) (1,302,719)
Deferred income tax asset valuation allowance 912,172 1,302,719
Deferred tax assets, net
v3.24.1.u1
Income Taxes (Details) - Schedule of Deferred Income Tax Assets - USD ($)
Dec. 31, 2023
Dec. 31, 2022
Schedule of Deferred Income Tax Assets [Line Items]    
Other $ 241,491 $ 241,491
Capital loss 491,275  
Net operating losses 6,900,076 6,479,181
Stock based compensation 511,142 511,142
Valuation allowance (8,143,986) (7,231,814)
Net deferred income tax assets
v3.24.1.u1
Equity Based Compensation (Details) - Schedule of Equity Based Compensation - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Schedule of Equity Based Compensation [Abstract]    
Equity based compensation $ 522,684 $ 1,927,746
Incentive Stock Awards [Member]    
Schedule of Equity Based Compensation [Abstract]    
Equity based compensation 377,856 1,594,746
Securities Issued for Services Rendered [Member]    
Schedule of Equity Based Compensation [Abstract]    
Equity based compensation $ 144,828 $ 333,000
v3.24.1.u1
Net Loss Per Share (Details) - Schedule of Anti-dilutive Shares - shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Schedule of Dilutive Shares [Line Items]    
Anti-dilutive shares 25,326,088 13,300,129
Convertible debt [Member]    
Schedule of Dilutive Shares [Line Items]    
Anti-dilutive shares 13,363,993 6,569,863
Stock options [Member]    
Schedule of Dilutive Shares [Line Items]    
Anti-dilutive shares 1,520,002 1,543,891
Warrants to purchase shares of common stock [Member]    
Schedule of Dilutive Shares [Line Items]    
Anti-dilutive shares 10,442,093 5,186,375
v3.24.1.u1
Related Party Transactions (Details) - USD ($)
 12 Months Ended
Sep. 13, 2022
Sep. 13, 2022
Jul. 11, 2022
Jul. 11, 2022
Dec. 31, 2023
Dec. 31, 2022
Jun. 21, 2023
Mr. Fuller [Member]              
Related Party Transaction [Line Items]              
Shares of options exercisable (in Shares) 6,667 6,667          
Exercise price (in Dollars per share)   $ 1.2          
James Fuller [Member]              
Related Party Transaction [Line Items]              
Option expense         $ 0 $ 7,993  
William Corbett [Member]              
Related Party Transaction [Line Items]              
Shares of options exercisable (in Shares)     500,000 500,000      
Exercise price (in Dollars per share)       $ 4.5      
Option expense         266,346 1,090,201  
Working capital expenses             $ 50,000
Clifford Henry [Member]              
Related Party Transaction [Line Items]              
Shares of options exercisable (in Shares) 6,667 6,667          
Exercise price (in Dollars per share)   $ 1.2          
Option expense         0 7,993  
Financial and capital markets advice         3,500    
Common Stock, Value, Issued $ 7,993 $ 7,993          
Madisson Butler [Member]              
Related Party Transaction [Line Items]              
Shares of options exercisable (in Shares) 6,667 6,667          
Option expense         0 7,993  
Madisson Corbett [Member]              
Related Party Transaction [Line Items]              
Exercise price (in Dollars per share)   $ 1.2          
Common Stock, Value, Issued $ 7,993 $ 7,993          
David Rios [Member]              
Related Party Transaction [Line Items]              
Shares of options exercisable (in Shares) 6,667 6,667          
Exercise price (in Dollars per share)   $ 1.2          
Option expense $ 7,993       0 7,993  
Mr. Rosenblum [Member]              
Related Party Transaction [Line Items]              
Restricted shares (in Shares)     66,667        
Restricted shares value     $ 110,000        
Richard Rosenblum [Member]              
Related Party Transaction [Line Items]              
Option expense         $ 111,510 $ 111,510  
v3.24.1.u1
Commitments and Contingencies (Details)
 12 Months Ended
Dec. 31, 2023
Note Payable [Member]  
Loss Contingencies [Line Items]  
Notes payable and convertible notes payable description The Company has notes payable and convertible notes payable, disclosed under notes 12 and 13 above, which originally matured between December 30, 2023 and September 14, 2024, of which the notes that had maturity dates between December 30, 2023 and February 23, 2024 have been extended to dates between April 30, 2024 and August 23, 2024.
v3.24.1.u1
Subsequent Events (Details) - USD ($)
 1 Months Ended 12 Months Ended 14 Months Ended
Mar. 04, 2024
Feb. 21, 2024
Feb. 12, 2024
Feb. 21, 2024
Dec. 31, 2023
Mar. 04, 2024
May 03, 2024
Dec. 30, 2022
Subsequent Event [Line Items]                
Common stock outstanding percentage         40.00%      
Accrued interest percentage         110.00%      
BZWR [Member]                
Subsequent Event [Line Items]                
Ownership percentage         100.00%      
Warrant [Member]                
Subsequent Event [Line Items]                
Interest payments         $ 1,591,734      
Conversion price per share (in Dollars per share)               $ 0.0115
Securities Purchase Agreement [Member]                
Subsequent Event [Line Items]                
Conversion price per share (in Dollars per share)         $ 0.345      
Conversion rate         70.00%      
Interest accrued percentage         15.00%      
Common Stock [Member] | Securities Purchase Agreement [Member]                
Subsequent Event [Line Items]                
Conversion price per share (in Dollars per share)         $ 0.0036      
Subsequent Event [Member]                
Subsequent Event [Line Items]                
Gross proceeds     $ 158,333          
Principal amount     226,190          
Subsequent Event [Member] | Securities Purchase Agreement [Member]                
Subsequent Event [Line Items]                
Original issue amount     $ 67,857          
Maturity date           Sep. 04, 2024    
Forecast [Member]                
Subsequent Event [Line Items]                
Gross proceeds $ 100,000     $ 308,335        
Bears interest   8.00%   8.00%        
Conversion price (in Dollars per share)   $ 0.345            
Interest charge           $ 9,143    
Forecast [Member] | Warrant [Member]                
Subsequent Event [Line Items]                
Interest payments             $ 30,871  
Forecast [Member] | Securities Purchase Agreement [Member]                
Subsequent Event [Line Items]                
Original issue amount $ 14,286         $ 14,286    
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