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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer ☐
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Accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which
registered
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Class
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Outstanding as of March 03, 2023
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Common Stock, $0.0001 par value per share
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PART I – FINANCIAL INFORMATION
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Item 1.
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2
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Item 2.
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21 |
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Item 3.
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29 | |
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Item 4.
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29 | |
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PART II – OTHER INFORMATION
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Item 1.
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30 |
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Item 2.
|
30 |
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Item 3.
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30 |
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Item 4.
|
30 |
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Item 5.
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30 |
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Item 6.
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30 |
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| 30 |
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Consolidated Financial Statements (UNAUDITED)
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4
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5
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6
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7
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8
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September 30,
2022
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December 31,
2021
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|||||||
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ASSETS
|
||||||||
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Current assets:
|
||||||||
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Cash and cash equivalents
|
$
|
|
$
|
|
||||
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Restricted cash
|
|
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||||||
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Short-term financial instruments
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||||||
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Short-term loan receivable
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||||||
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Accounts receivables, net of allowance for doubtful accounts $
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||||||
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Deferred tax assets - current
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|
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||||||
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Prepaid expenses and other current assets
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||||||
| Current assets of discontinued operations |
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Total current assets
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||||||
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Non-current assets:
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||||||||
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Investments
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|
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||||||
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Property and equipment, net
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||||||
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Intangible assets, net
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||||||
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Deposits
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||||||
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Deferred tax assets - non current
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|
|
||||||
| Non-current assets of discontinued operations |
||||||||
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Total non-current assets
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|
|
||||||
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Total Assets
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$
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|
$
|
|
||||
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Liabilities and Stockholders’ Equity
|
||||||||
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Current liabilities:
|
||||||||
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Accounts payable
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$
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|
$
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|
||||
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Accrued expenses and other
|
|
|
||||||
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Value added tax payable
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|
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||||||
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Income tax payable
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||||||
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Short-term loan payable
|
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|
||||||
| Government grants outstanding for usage of future projects |
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||||||
| Current liabilities of discontinued operations |
||||||||
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Total current liabilities
|
|
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||||||
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Total liabilities
|
|
|
||||||
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Commitments and contingencies
|
||||||||
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Stockholders’ Equity
|
||||||||
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Common stock - $
|
|
|
||||||
|
Treasury stock
|
|
(
|
)
|
|||||
|
Additional paid-in-capital
|
|
|
||||||
| Accumulated other comprehensive loss |
(
|
)
|
(
|
)
|
||||
|
Accumulated retained earnings
|
(
|
)
|
|
|||||
|
Total company stockholders’ equity
|
|
|
||||||
|
Preferred stock (I-ON Korea and eformworks) - $
|
|
|
||||||
|
Non-controlling interests
|
|
(
|
)
|
|||||
|
Total stockholders’ equity
|
|
|
||||||
|
Total Liabilities and Stockholders’ Equity
|
$
|
|
$
|
|
||||
| Three-month Period ended September 30, |
Nine-month
Period ended September 30,
|
|||||||||||||||
|
2022
(RESTATED) |
2021
(RESTATED)
|
2022
(RESTATED) |
2021
(RESTATED)
|
|||||||||||||
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Net sales
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
Cost of goods sold
|
|
|
||||||||||||||
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Gross profit
|
|
|
||||||||||||||
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Operating expense
|
||||||||||||||||
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Income (loss) from operations
|
|
|
||||||||||||||
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Other income (expense)
|
||||||||||||||||
| Income (loss) from continuing operation |
||||||||||||||||
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Income (loss) before income taxes, loss on equity investment, and non-controlling interest
|
(
|
)
|
|
( |
) | |||||||||||
|
Provision for (benefit from) income tax
|
(
|
)
|
(
|
)
|
( |
) | ||||||||||
|
Income (loss) before loss on equity investment and non-controlling interest
|
( |
) | ( |
) | ||||||||||||
|
Loss on equity investment
|
( |
) | ( |
) | ||||||||||||
|
Income (loss) before non-controlling interest
|
( |
) | ( |
) | ||||||||||||
|
Non-controlling interest income (loss)
|
( |
) | ( |
) | ( |
) | ||||||||||
|
Net income (loss) attributable to Parent Company from discontinued operations
|
$
|
(
|
)
|
$
|
|
$ | $ | |||||||||
|
Comprehensive income statement:
|
||||||||||||||||
|
Net income (loss) from discontinued operation
|
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
|
Foreign currency translation loss
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Total comprehensive income (loss)
|
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
|
Basic earnings per share from continuing operations
|
||||||||||||||||
|
Net loss before non-controlling interest
|
$ | $ | $ | $ | ||||||||||||
|
Non-controlling interest
|
$ | $ | $ | $ | ||||||||||||
|
Earnings per share to stockholders
|
$ | $ | $ | $ | ||||||||||||
|
Diluted earnings per share from continuing operations
|
||||||||||||||||
|
Net loss before non-controlling interest
|
$ | $ | $ | $ | ||||||||||||
|
Non-controlling interest
|
$ | $ | $ | $ | ||||||||||||
|
Earnings per share to stockholders
|
$ | $ | $ | $ | ||||||||||||
|
Basic earnings per share from discontinued operations
|
||||||||||||||||
|
Net loss before non-controlling interest
|
$ | $ | $ | ( |
) | $ | ||||||||||
|
Non-controlling interest
|
$ | $ | $ | ( |
) | $ | ||||||||||
|
Earnings per share to stockholders
|
$ | $ | $ | $ | ||||||||||||
|
Diluted earnings per share from discontinued operations
|
||||||||||||||||
|
Net loss before non-controlling interest
|
$ | $ | $ | ( |
) | $ | ||||||||||
|
Non-controlling interest
|
$ | $ | $ | ( |
) | $ | ||||||||||
|
Earnings per share to stockholders
|
$ | $ | $ | $ | ||||||||||||
|
Weighted average number of common shares outstanding:
|
||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
|
Accumulated
|
Total
|
|||||||||||||||||||||||||||||||||||||||
|
Additional
|
Other
|
Company
|
Non-
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Common Stock
|
Paid-In
|
Retained
|
Treasury
|
Comprehensive
|
Stockholders’
|
Controlling
|
Preferred
|
Stockholders’
|
||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Earnings
|
Stock
|
Income (Loss)
|
Equity
|
Interest
|
Stock
|
Equity
|
|||||||||||||||||||||||||||||||
|
Balance
at December 31, 2021
|
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||
|
Foreign currency translation
|
- | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
|
Net income (loss)
|
- | |||||||||||||||||||||||||||||||||||||||
|
Balance at March 31, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||||||||
|
Foreign currency translation
|
- |
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||||||
|
Net income (loss)
|
- |
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||||
|
Balance at June 30, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||||||||
|
Cancellation of common stock in connection with equity purchase agreement (RESTATED)
|
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
|
Adjustments from deconsolidation (RESTATED)
|
- | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
|
Foreign currency translation
|
- | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
|
Net income (loss) (RESTATED)
|
- | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
|
Balance
at September 30, 2022
|
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Accumulated
|
Total
|
|||||||||||||||||||||||||||||||||||||||
|
Additional
|
Other
|
Company
|
Non-
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Common Stock
|
Paid-In
|
Retained
|
Treasury
|
Comprehensive
|
Stockholders’
|
Controlling
|
Preferred
|
Stockholders’
|
||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Earnings
|
Stock
|
Income (Loss)
|
Equity
|
Interest
|
Stock
|
Equity
|
|||||||||||||||||||||||||||||||
|
Balance at December 31, 2020
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||||
|
Foreign
currency translation
|
- |
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||||||
|
Net
income (loss)
|
- |
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||||||||
|
Balance
at March 31, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||||||||
|
Foreign currency translation
|
- | |||||||||||||||||||||||||||||||||||||||
|
Net income (loss)
|
- | |||||||||||||||||||||||||||||||||||||||
|
Balance at June 30, 2021
|
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Foreign currency translation
|
- |
( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
|
Net income (loss)
|
- | |||||||||||||||||||||||||||||||||||||||
|
Balance at September 30, 2021
|
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | $ | |||||||||||||||||||||||||||
|
Nine Months
ended September 30,
|
2022
(RESTATED)
|
2021
|
||||||
|
Cash flows from operating activities:
|
||||||||
| Net income (loss) |
$
|
(
|
)
|
$
|
|
|||
| Less: Net income (loss) from discontinued operations | ( |
) | ||||||
| Net income (loss) from continuing operations | ||||||||
| Net cash used in operating activities from continuing operations | ||||||||
| Net cash used in operating activities from discontinued operations | ( |
) | ( |
) | ||||
| Total net cash used in operating activities |
(
|
)
|
(
|
)
|
||||
|
Cash flows from investing activities:
|
||||||||
| Net cash used in investing activities from continuing operations | ||||||||
| Net cash used in investing activities from discontinued operations | ( |
) | ( |
) | ||||
| Total net cash used in investing activities |
(
|
)
|
(
|
)
|
||||
|
Cash flows from financing activities:
|
||||||||
|
Net cash provided by (used in) financing activities from continuing operations
|
|
|
||||||
| Net cash provided by (used in) financing activities from discontinued operations |
|
(
|
)
|
|||||
| Total net cash provided by financing activities |
|
(
|
)
|
|||||
|
Effect of foreign currency translation on cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
| Net decrease in cash and cash equivalents |
(
|
)
|
(
|
)
|
||||
|
Cash and cash equivalents including restricted cash, beginning of period
|
|
|
||||||
|
Cash and cash equivalents including restricted cash, end of period
|
$
|
|
$
|
|
||||
|
Supplemental disclosure of cash flow information:
|
||||||||
| Continuing operations: | ||||||||
|
Interest paid
|
$
|
|
$
|
|
||||
|
Taxes paid
|
$
|
|
$
|
|
||||
| Discontinued operations: | ||||||||
| Interest paid | $ | $ | ||||||
| Taxes paid | $ | $ | ||||||
|
Significant noncash items:
|
||||||||
|
Cancellation of common stocks
|
$ |
$ |
||||||
| NOTE 1: |
Restatement
|
|
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
|
||||||||||||||||
|
|
||||||||||||||||
|
|
Three-month Period ended September 30,
2022
|
Nine-month Period ended September 30, 2022
|
||||||||||||||
|
|
As Previously Reported
|
Restated
|
As Previously Reported
|
Restated
|
||||||||||||
|
|
||||||||||||||||
|
Statements
of Operations:
|
||||||||||||||||
| Income (loss) from continuing operation |
||||||||||||||||
|
Income (loss) before income taxes, loss on equity investment, and non-controlling interest
|
( |
) | ( |
) | ||||||||||||
|
Provision for (benefit from) income tax
|
( |
) | ||||||||||||||
|
Income (loss) before loss on equity investment and non-controlling interest
|
( |
) | ( |
) | ||||||||||||
| Loss on equity investment | ( |
) | ( |
) | ||||||||||||
|
Income (loss) before non-controlling interest
|
( |
) | ( |
) | ||||||||||||
| Non-controlling interest income (loss) | ( |
) | ( |
) | ||||||||||||
|
Net income (loss) attributable to Parent Company from discontinued operations
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||
|
|
||||||||||||||||
|
Comprehensive income statement:
|
||||||||||||||||
|
Net income (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Total comprehensive income (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
Condensed Consolidated Statement of Cash Flows
|
||||||||
|
|
||||||||
|
Nine Months ended September 30, 2022
|
As Previously Reported
|
Restated
|
||||||
|
|
||||||||
|
Cash flows from operating activities:
|
||||||||
|
Net income (loss)
|
$
|
(
|
)
|
$
|
(
|
)
|
||
| Less: Net income (loss) from discontinued operations |
( |
) | ( |
) | ||||
| Net cash used in operating activities from discontinued operations | ( |
) | ( |
) | ||||
|
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
|
|
||||||||
|
Cash flows from investing activities:
|
||||||||
|
Net cash used in investing activities from discontinued operations
|
(
|
)
|
(
|
)
|
||||
|
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
| Cash flows from financing activities: | ||||||||
| Net cash provided by financing activities from discontinued operations | ||||||||
| Net cash provided by financing activities | ||||||||
|
|
||||||||
|
Effect of foreign currency translation on cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
| Significant noncash items: |
||||||||
|
Cancellation of common stocks
|
||||||||
|
Accumulated
|
Total
|
|||||||||||||||||||||||||||||||||||||||
|
Additional
|
Other
|
Company
|
Non-
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Common Stock
|
Paid-In
|
Retained
|
Treasury
|
Comprehensive
|
Stockholders’
|
Controlling
|
Preferred
|
Stockholders’
|
||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Earnings
|
Stock
|
Income (Loss)
|
Equity
|
Interest
|
Stock
|
Equity
|
|||||||||||||||||||||||||||||||
|
Cancellation of common stock in connection with equity purchase agreement
|
(
|
)
|
(
|
)
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||||||||||||
|
Adjustments from deconsolidation
|
-
|
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||||||||
|
Accumulated
|
Total
|
|||||||||||||||||||||||||||||||||||||||
|
Additional
|
Other
|
Company
|
Non-
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Common Stock
|
Paid-In
|
Retained
|
Treasury
|
Comprehensive
|
Stockholders’
|
Controlling
|
Preferred
|
Stockholders’
|
||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Earnings
|
Stock
|
Income (Loss)
|
Equity
|
Interest
|
Stock
|
Equity
|
|||||||||||||||||||||||||||||||
|
Cancellation of common stock in connection with equity purchase agreement (RESTATED)
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||||||||||||
|
Adjustments from deconsolidation (RESTATED)
|
-
|
|
|
(
|
)
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||
| NOTE 2: |
Organization and Operations
|
| NOTE 3: |
Summary of Significant Accounting Policies
|
| ● |
I-ON, Ltd (Japanese subsidiary) – The financial position and results of operations of I-ON, Ltd, the Japanese subsidiary of the Company, are initially recorded using its local currency, Japanese Yen
(“JPY”). Assets and liabilities denominated in foreign currency are translated to the functional currency at the functional currency rate of exchange at the balance sheet date. The results of operations denominated in foreign
currency are translated at the average rate of exchange during the reporting period. All differences are reflected in profit or loss. As of September 30, 2022, and December 31, 2021, the exchange rate was JPY
|
| ● |
Consolidation – Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rates prevailing at the balance sheet date. The results of operations are
translated from KWR to US Dollar at the weighted average rate of exchange during the reporting period. The registered equity capital denominated in the functional currency is translated at the historical rate of exchange at
the time of capital contribution. All translation adjustments resulting from the translation of the financial statements into the reporting currency, US Dollar, are dealt with as a component of accumulated other comprehensive
income. As of September 30, 2022, and December 31, 2021, the exchange rate was KRW
|
| ● |
Royalty – the Company receives a fixed amount of royalties from a company in Japan for providing rights to sell the Company’s products in Japanese
market. Revenue is recognized over the contract and service period.
|
| ● |
License Solution & Services – the Company recognizes revenue on installation of the web-content management software, services provided for
installation, and customization.
|
| ● |
Customizing Services – the Company recognizes revenue from processing transactions between businesses and their customers. Revenue is recognized over
the contract and service period and when service for the contract is completed.
|
| ● |
Maintenance – the Company recognizes revenue over the contract term based on percentage-of-completion method.
|
|
Facility equipment
|
|
|
Automobile
|
|
|
Office equipment
|
|
|
Development costs
|
|
|
Intangible assets excluding development costs
|
|
|
Other Intangible assets
|
|
| Level 1 |
Quoted prices in active markets for identical assets or liabilities that the Company has an ability to access as of the measurement
date.
|
| Level 2 |
Inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in
markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the same term of the assets or liabilities.
|
| Level 3 |
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or
liabilities.
|
| NOTE 4: |
Discontinued
Operations
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
|
2022
(RESTATED)
|
2021
(RESTATED)
|
2022
(RESTATED)
|
2021
(RESTATED)
|
|||||||||||||
|
Net Sales
|
|
|
|
|
||||||||||||
|
Operating costs and expenses
|
|
|
|
|
||||||||||||
|
Income (loss) from operations before other income and income taxes
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Other income (loss)
|
|
|
|
|
||||||||||||
|
Income (loss) before income taxes, loss on equity investment, and non-controlling interest
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Income tax
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
| Income (loss) before loss on equity investment and non-controlling interest |
( |
) | ( |
) | ||||||||||||
| Loss on equity investment |
( |
) | ( |
) | ||||||||||||
| Income (loss) before non-controlling interest |
( |
) | ( |
) | ||||||||||||
| Non-controlling interest income (loss) |
( |
) | ( |
) | ( |
) | ||||||||||
|
Net income (loss) attributable to Parent Company from discontinued operations
|
(
|
)
|
|
|
|
|||||||||||
|
September 30,
2022
|
December 31,
2021
|
|||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
||||
|
Restricted cash
|
|
|
||||||
|
Short-term financial instruments
|
|
|
||||||
|
Short-term loan receivable
|
|
|
||||||
|
Accounts receivables, net of allowance for doubtful accounts $
|
|
|
||||||
|
Deferred tax assets - current
|
|
|
||||||
|
Prepaid expenses and other current assets
|
|
|
||||||
|
Total current assets of discontinued operations
|
|
|
||||||
|
Investments
|
|
|
||||||
|
Property and equipment, net
|
|
|
||||||
|
Intangible assets, net
|
|
|
||||||
|
Deposits
|
|
|
||||||
|
Deferred tax assets – non-current
|
|
|
||||||
|
Total non-current assets of discontinued operations
|
|
|
||||||
|
Accounts payable
|
$
|
|
$
|
|
||||
|
Accrued expenses and other
|
|
|
||||||
|
Value added tax payable
|
|
|
||||||
|
Income tax payable
|
|
|
||||||
|
Short-term loan payable
|
|
|
||||||
|
Government grants outstanding for usage of future projects
|
|
|
||||||
|
Total current liabilities of discontinued operations
|
|
|
||||||
| NOTE 5: |
Earnings Per Share
|
|
Three-months Period
Ended September 30,
|
Nine-months Period
Ended September 30,
|
|||||||||||||||
|
Periods Ended
|
2022
(RESTATED)
|
2021
(RESTATED)
|
2022
(RESTATED)
|
2021
(RESTATED)
|
||||||||||||
|
Net income (loss)
|
$
|
(
|
)
|
$
|
|
$ | $ | |||||||||
|
Net income (loss) from continuing operations
|
|
|
||||||||||||||
|
Net income (loss) attributable to Parent Company from discontinued operations
|
(
|
)
|
|
|||||||||||||
|
Weighted-average shares of common stock outstanding:
|
||||||||||||||||
|
Basic
|
|
|
||||||||||||||
|
Dilutive effect of common stock equivalents arising from share option, excluding antidilutive effect from loss
|
|
|
||||||||||||||
|
Dilutive shares
|
|
|
||||||||||||||
| Net income (loss) from continuing operations: | ||||||||||||||||
|
Earnings per share - Basic
|
||||||||||||||||
|
Net income (loss) before non-controlling interest
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
Non-controlling interest
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
Earnings per share to stockholders
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
Earnings per share - Diluted
|
||||||||||||||||
|
Net income (loss) before non-controlling interest
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
Non-controlling interest
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
Earnings per share to stockholders
|
$
|
|
$
|
|
$ | $ | ||||||||||
|
Net income (loss) from discontinued operations:
|
||||||||||||||||
|
Earnings per share - Basic
|
||||||||||||||||
|
Net income (loss) before non-controlling interest
|
$ |
$ |
$ |
( |
) | $ |
||||||||||
|
Non-controlling interest
|
$ |
$ |
$ |
( |
) | $ |
||||||||||
|
Earnings per share to stockholders
|
$ |
$ |
$ |
$ |
||||||||||||
|
|
||||||||||||||||
|
Earnings per share - Diluted
|
||||||||||||||||
|
Net income (loss) before non-controlling interest
|
$ |
$ |
$ |
( |
) | $ |
||||||||||
|
Non-controlling interest
|
$ |
$ |
$ |
( |
) | $ |
||||||||||
|
Earnings per share to stockholders
|
$ |
$ |
$ |
$ |
||||||||||||
| NOTE 6: |
Deconsolidation of Subsidiaries
|
| NOTE 7: |
Subsequent Events
|
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
Three months ended September 30,
|
|||||||||||||||||||||||
|
|
2022
(RESTATED)
|
2021
(RESTATED)
|
Change
|
|||||||||||||||||||||
|
|
Amount
|
% of
Revenue
|
Amount
|
% of
Revenue
|
Amount
|
%
|
||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Net sales
|
$
|
2,258,387
|
100.0
|
%
|
$
|
3,616,267
|
100.0
|
%
|
$
|
(1,357,880
|
)
|
-37.5
|
%
|
|||||||||||
|
Cost of goods sold
|
2,162,075
|
95.7
|
%
|
2,494,644
|
69.0
|
%
|
(332,569
|
)
|
-13.3
|
%
|
||||||||||||||
|
Gross profit
|
96,312
|
4.3
|
%
|
1,121,623
|
31.0
|
%
|
(1,025,311
|
)
|
-91.4
|
%
|
||||||||||||||
|
|
||||||||||||||||||||||||
|
Operating expense
|
941,882
|
41.7
|
%
|
730,846
|
20.2
|
%
|
211,036
|
28.9
|
%
|
|||||||||||||||
|
|
||||||||||||||||||||||||
|
Other income (expense)
|
801,613
|
35.5
|
%
|
12,210
|
0.3
|
%
|
789,403
|
6465.0
|
%
|
|||||||||||||||
|
|
||||||||||||||||||||||||
|
Income (loss) before provision for income taxes, loss on equity investment, and non-controlling interest
|
(43,957
|
)
|
(1.9
|
)%
|
402,987
|
11.1
|
%
|
(446,944
|
)
|
-110.9
|
%
|
|||||||||||||
|
Provision for (benefit from) income tax
|
(878
|
)
|
(0.0
|
)%
|
(579,022
|
)
|
(16.0
|
)%
|
578,144
|
-99.8
|
%
|
|||||||||||||
|
Income (loss) before loss on equity investment and non-controlling interest
|
(43,079
|
)
|
(1.9
|
)%
|
982,009
|
27.2
|
%
|
(1,025,088
|
)
|
-104.4
|
%
|
|||||||||||||
|
Loss on equity investment
|
(18,725
|
)
|
(0.8
|
)%
|
-
|
0.00
|
%
|
(18,725
|
)
|
N/A
|
||||||||||||||
|
Income (loss) before non-controlling interest
|
(61,804
|
)
|
(2.7
|
)%
|
982,009
|
27.2
|
%
|
(1,043,813
|
)
|
-106.3
|
||||||||||||||
|
Non-controlling interest income (loss)
|
(36,941
|
)
|
(1.6
|
)%
|
89
|
0.00
|
%
|
(37,030
|
)
|
-41606.7
|
%
|
|||||||||||||
|
Net income (loss) attributable to Parent Company from discontinued operations
|
(24,863
|
)
|
(1.1
|
)%
|
981,920
|
27.2
|
%
|
(1,006,783
|
)
|
-102.5
|
%
|
|||||||||||||
|
|
||||||||||||||||||||||||
|
Comprehensive income statement:
|
||||||||||||||||||||||||
|
Net income (loss)
|
38,968
|
1.7
|
%
|
982,009
|
27.2
|
%
|
(942,952
|
)
|
-96.0
|
%
|
||||||||||||||
|
Foreign currency translation loss
|
(977,851
|
)
|
(43.3
|
)%
|
(468,727
|
)
|
(13.0
|
)%
|
(509,124
|
)
|
108.6
|
%
|
||||||||||||
|
Total comprehensive income (loss)
|
$
|
(938,883
|
)
|
(41.6
|
)%
|
$
|
513,282
|
14.2
|
%
|
(1,452,076
|
)
|
282.9
|
%
|
|||||||||||
|
|
Nine months ended September 30,
|
|||||||||||||||||||||||
|
|
2022
(RESTATED)
|
2021
(RESTATED)
|
Change
|
|||||||||||||||||||||
|
|
Amount
|
% of
Revenue
|
Amount
|
% of
Revenue
|
Amount
|
%
|
||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Net sales
|
$
|
7,578,685
|
100.0
|
%
|
$
|
12,224,926
|
100.0
|
%
|
$
|
(4,646,241
|
)
|
-38.0
|
%
|
|||||||||||
|
Cost of goods sold
|
6,923,957
|
91.4
|
%
|
8,626,293
|
70.6
|
%
|
(1,702,336
|
)
|
-19.7
|
%
|
||||||||||||||
|
Gross profit
|
654,728
|
8.6
|
%
|
3,598,633
|
29.4
|
%
|
(2,943,905
|
)
|
-81.8
|
%
|
||||||||||||||
|
|
||||||||||||||||||||||||
|
Operating expense
|
2,649,706
|
35.0
|
%
|
2,404,575
|
19.7
|
%
|
245,131
|
10.2
|
%
|
|||||||||||||||
|
|
||||||||||||||||||||||||
|
Other income (expense)
|
1,807,581
|
23.9
|
%
|
15,439
|
0.1
|
%
|
1,792,142
|
11607.9
|
%
|
|||||||||||||||
|
|
||||||||||||||||||||||||
|
Income (loss) before provision for income taxes, loss on equity investment, and non-controlling interest
|
(187,397
|
)
|
(2.5
|
)%
|
1,209,497
|
9.9
|
%
|
(1,396,894
|
)
|
-115.5
|
%
|
|||||||||||||
|
Provision for (benefit from) income tax
|
30,002
|
0.4
|
%
|
(506,439
|
)
|
(4.1
|
)%
|
536,441
|
-105.9
|
%
|
||||||||||||||
|
Income (loss) before loss on equity investment and non-controlling interest
|
(217,399
|
)
|
(2.9
|
)%
|
1,715,936
|
14.0
|
%
|
(1,933,335
|
)
|
-112.7
|
%
|
|||||||||||||
|
Loss on equity investment
|
(18,725
|
)
|
(0.2
|
)%
|
-
|
0.00
|
%
|
(18,725
|
)
|
N/A
|
||||||||||||||
|
Income (loss) before non-controlling interest
|
(236,124
|
)
|
(3.1
|
)%
|
1,715,936
|
14.0
|
%
|
(1,952,060
|
)
|
-113.8
|
%
|
|||||||||||||
|
Non-controlling interest income (loss)
|
(273,108
|
)
|
(3.6
|
)%
|
(409
|
)
|
0.00
|
%
|
(272,699
|
)
|
-66674.6
|
%
|
||||||||||||
|
Net income (loss) attributable to Parent Company from discontinued operations
|
36,984
|
0.5
|
%
|
1,716,345
|
14.0
|
%
|
(1,679,361
|
)
|
-97.8
|
%
|
||||||||||||||
|
|
||||||||||||||||||||||||
|
Comprehensive income statement:
|
||||||||||||||||||||||||
|
Net income (loss)
|
(236,124
|
)
|
(3.1
|
)%
|
1,715,936
|
14.0
|
%
|
(1,952,060
|
)
|
-113.8
|
%
|
|||||||||||||
|
Foreign currency translation loss
|
(1,691,420
|
)
|
(22.3
|
)%
|
(1,015,434
|
)
|
(8.3
|
)%
|
(675,986
|
)
|
66.6
|
%
|
||||||||||||
|
Total comprehensive income (loss)
|
$
|
(1,927,544
|
)
|
(25.4
|
)%
|
$
|
700,502
|
5.7
|
%
|
(2,628,046
|
)
|
-375.2
|
%
|
|||||||||||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
| Item 4. |
Controls and Procedures
|
| Item 1. |
Legal Proceedings
|
| Item 2. |
Unregistered Sales of Equity Securities
|
| Item 3. |
Defaults Upon Senior Securities
|
| Item 5. |
Other Information
|
| Item 6. |
Exhibits
|
|
Exhibit
Number
|
Exhibit
Description
|
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
|
|
|
32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
|
|
|
31.2**
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
|
32.2***
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Date: March 03, 2023
|
I-ON Digital Corp
I-ON COMMUNICATIONS CORP.
|
|
|
By:
|
/s/ Jae Cheol Oh
|
|
|
Jae Cheol Oh
|
||
|
Chief Executive Officer, Treasurer, Director (Principal Executive and Financial Officer)
|
||
|
By:
|
/s/ Jae Cheol Oh
|
|
|
Jae Cheol Oh
|
||
|
Chief Executive Officer, Treasurer, Director (Principal Executive and Financial Officer)
|
||
|
1.
|
have reviewed this Amendment No. 1 to the quarterly report on Form 10-Q/A for the period ended September 30, 2022 of I-ON Digital Corp.;
|
| 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.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e Ind 15d-1I)) 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 my 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 over financial reporting;
|
| 5. |
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of 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: March 03, 2023
|
|
|
/s/ Jae Cheol Oh
|
|
|
Name: Jae Cheol Oh
|
|
|
Title: Chairman, Chief Executive Officer and Chief Financial Officer
(Principal Executive, Financial and Accounting Officer)
|
| (1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
| (2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: March 03, 2023
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/s/ Jae Cheol Oh
|
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Name: Jae Cheol Oh
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|
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Title: Chairman, Chief Executive and Financial Officer
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|
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(Principal Executive, Financial and Accounting Officer)
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Document and Entity Information - shares |
9 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Mar. 03, 2023 |
|
| Cover [Abstract] | ||
| Document Type | 10-Q/A | |
| Amendment Flag | true | |
| Amendment Description | I-ON Digital Corp. and subsidiaries (the “Company,” “we,” “us” or “our”) is filing this Amendment No. 1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, originally filed with the SEC on January 13, 2023 (the “Original Form 10-Q”) to correct and restate the financial statements for an error in connection with our presentation and disclosure of the deconsolidation due to the sell-off of a former subsidiary, I-ON Communications, Ltd. (“Communications”). | |
| Document Quarterly Report | true | |
| Document Period End Date | Sep. 30, 2022 | |
| Current Fiscal Year End Date | --12-31 | |
| Document Fiscal Year Focus | 2022 | |
| Document Fiscal Period Focus | Q3 | |
| Document Transition Report | false | |
| Entity File Number | 000-54995 | |
| Entity Registrant Name | I-ON DIGITAL CORP. | |
| Entity Central Index Key | 0001580490 | |
| Entity Incorporation, State or Country Code | DE | |
| Entity Tax Identification Number | 46-3031328 | |
| Entity Address, Address Line One | 15, Teheran-ro 10-gil, Gangnam-gu | |
| Entity Address, City or Town | Seoul | |
| Entity Address, Country | KR | |
| Entity Address, Postal Zip Code | 06234 | |
| City Area Code | 82-2 | |
| Local Phone Number | 3430-1200 | |
| Entity Current Reporting Status | Yes | |
| Entity Interactive Data Current | Yes | |
| Entity Filer Category | Non-accelerated Filer | |
| Entity Small Business | true | |
| Entity Emerging Growth Company | false | |
| Entity Shell Company | false | |
| Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
| Trading Symbol | IONI | |
| Security Exchange Name | NONE | |
| Entity Common Stock, Shares Outstanding | 19,723,870 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Current assets: | ||
| Accounts receivables, allowance for doubtful accounts | $ 0 | $ 645,335 |
| Stockholders' Equity | ||
| Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
| Common stock, shares issued (in shares) | 19,724,220 | 35,030,339 |
| Common stock, shares outstanding (in shares) | 19,724,220 | 35,030,339 |
| Preferred stock, par value (in dollars per share) | $ 0.438 | $ 0.438 |
| Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
| Preferred stock, issued (in shares) | 0 | 600,742 |
| Preferred stock, outstanding (in shares) | 0 | 600,742 |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) |
Common Stock [Member] |
Additional Paid-In Capital [Member] |
Retained Earnings [Member] |
Treasury Stock [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Total Company Stockholders' Equity [Member] |
Non-Controlling Interest [Member] |
Preferred Stock [Member] |
Total |
|---|---|---|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2020 | $ 3,503 | $ 3,713,370 | $ 5,517,785 | $ (709,478) | $ 289,933 | $ 8,815,113 | $ 5,832 | $ 475,036 | $ 9,295,981 |
| Balance (in shares) at Dec. 31, 2020 | 35,030,339 | ||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
| Foreign currency translation | $ 0 | 0 | 0 | 0 | (558,140) | (558,140) | 0 | 0 | (558,140) |
| Net income (loss) | 0 | 0 | (273,992) | 0 | 0 | (273,992) | (889) | 0 | (274,881) |
| Balance at Mar. 31, 2021 | $ 3,503 | 3,713,370 | 5,243,793 | (709,478) | (268,207) | 7,982,981 | 4,943 | 475,036 | 8,462,960 |
| Balance (in shares) at Mar. 31, 2021 | 35,030,339 | ||||||||
| Balance at Dec. 31, 2020 | $ 3,503 | 3,713,370 | 5,517,785 | (709,478) | 289,933 | 8,815,113 | 5,832 | 475,036 | 9,295,981 |
| Balance (in shares) at Dec. 31, 2020 | 35,030,339 | ||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
| Foreign currency translation | (1,015,434) | ||||||||
| Balance at Sep. 30, 2021 | $ 3,503 | 3,713,370 | 7,234,130 | (709,478) | (725,501) | 9,516,024 | 5,423 | 475,036 | 9,996,483 |
| Balance (in shares) at Sep. 30, 2021 | 35,030,339 | ||||||||
| Balance at Mar. 31, 2021 | $ 3,503 | 3,713,370 | 5,243,793 | (709,478) | (268,207) | 7,982,981 | 4,943 | 475,036 | 8,462,960 |
| Balance (in shares) at Mar. 31, 2021 | 35,030,339 | ||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
| Foreign currency translation | $ 0 | 0 | 0 | 0 | 11,433 | 11,433 | 0 | 0 | 11,433 |
| Net income (loss) | 0 | 0 | 1,008,417 | 0 | 0 | 1,008,417 | 391 | 0 | 1,008,808 |
| Balance at Jun. 30, 2021 | $ 3,503 | 3,713,370 | 6,252,210 | (709,478) | (256,774) | 9,002,831 | 5,334 | 475,036 | 9,483,201 |
| Balance (in shares) at Jun. 30, 2021 | 35,030,339 | ||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
| Foreign currency translation | $ 0 | 0 | 0 | 0 | (468,727) | (468,727) | 0 | 0 | (468,727) |
| Net income (loss) | 0 | 0 | 981,920 | 0 | 0 | 981,920 | 89 | 0 | 982,009 |
| Balance at Sep. 30, 2021 | $ 3,503 | 3,713,370 | 7,234,130 | (709,478) | (725,501) | 9,516,024 | 5,423 | 475,036 | 9,996,483 |
| Balance (in shares) at Sep. 30, 2021 | 35,030,339 | ||||||||
| Balance at Dec. 31, 2021 | $ 3,503 | 3,713,370 | 7,681,661 | (709,478) | (726,500) | 9,962,556 | (165,796) | 1,093,569 | 10,890,329 |
| Balance (in shares) at Dec. 31, 2021 | 35,030,339 | ||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
| Foreign currency translation | $ 0 | 0 | 0 | 0 | (227,991) | (227,991) | 0 | 0 | (227,991) |
| Net income (loss) | 0 | 0 | 412,474 | 0 | 0 | 412,474 | 25,281 | 0 | 437,755 |
| Balance at Mar. 31, 2022 | $ 3,503 | 3,713,370 | 8,094,135 | (709,478) | (954,491) | 10,147,039 | (140,515) | 1,093,569 | 11,100,093 |
| Balance (in shares) at Mar. 31, 2022 | 35,030,339 | ||||||||
| Balance at Dec. 31, 2021 | $ 3,503 | 3,713,370 | 7,681,661 | (709,478) | (726,500) | 9,962,556 | (165,796) | 1,093,569 | 10,890,329 |
| Balance (in shares) at Dec. 31, 2021 | 35,030,339 | ||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
| Foreign currency translation | (1,691,420) | ||||||||
| Balance at Sep. 30, 2022 | $ 1,972 | 2,689,391 | (273,443) | 0 | (2,417,920) | 0 | 0 | 0 | 0 |
| Balance (in shares) at Sep. 30, 2022 | 19,724,220 | ||||||||
| Balance at Mar. 31, 2022 | $ 3,503 | 3,713,370 | 8,094,135 | (709,478) | (954,491) | 10,147,039 | (140,515) | 1,093,569 | 11,100,093 |
| Balance (in shares) at Mar. 31, 2022 | 35,030,339 | ||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
| Foreign currency translation | $ 0 | 0 | 0 | 0 | (485,578) | (485,578) | 0 | 0 | (485,578) |
| Net income (loss) | 0 | 0 | (451,399) | 0 | 0 | (451,399) | (261,448) | 0 | (712,847) |
| Balance at Jun. 30, 2022 | $ 3,503 | 3,713,370 | 7,642,736 | (709,478) | (1,440,069) | 9,210,062 | (401,963) | 1,093,569 | 9,901,668 |
| Balance (in shares) at Jun. 30, 2022 | 35,030,339 | ||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
| Cancellation of common stock in connection with equity purchase agreement | $ (1,531) | (1,023,979) | 0 | 0 | 0 | (1,025,510) | 0 | 0 | (1,025,510) |
| Cancellation of common stock in connection with equity purchase agreement (in shares) | (15,306,119) | ||||||||
| Adjustments from deconsolidation (RESTATED) | $ 0 | 0 | (7,891,316) | 709,478 | 0 | (7,181,838) | 438,904 | (1,093,569) | (7,836,503) |
| Foreign currency translation | 0 | 0 | 0 | 0 | (977,851) | (977,851) | 0 | 0 | (977,851) |
| Net income (loss) | 0 | 0 | (24,863) | 0 | 0 | (24,863) | (36,941) | 0 | (61,804) |
| Balance at Sep. 30, 2022 | $ 1,972 | $ 2,689,391 | $ (273,443) | $ 0 | $ (2,417,920) | $ 0 | $ 0 | $ 0 | $ 0 |
| Balance (in shares) at Sep. 30, 2022 | 19,724,220 |
Restatement |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Restatement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restatement |
Management of the Company has concluded that our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, originally filed with the SEC on January 13, 2023, contained an
error in connection with the presentation and disclosure of the deconsolidation due to the Sell-off of a former subsidiary, I-ON Communications, Ltd.
The following tables present the effects of the restatement on the accompanying consolidated financial statements at September 30, 2022:
Condensed Consolidated Statement of Stockholders’ Equity – As Previously Reported
Condensed Consolidated Statement of Stockholders’ Equity – Restated
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Organization and Operations |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2022 | |||
| Organization and Operations [Abstract] | |||
| Organization and Operations |
I-ON
Digital Corp. (“the Company”) was incorporated on July 5, 1999 and is engaged in developing and supplying computerized system. The corporate headquarter is located at 15 Teheran-ro 10-gil Gangnam-gu Seoul, South Korea. The Company
provides enterprise content management services to customers primarily in Korea, Japan and Indonesia, by developing industry-leading products such as ICS (web content management system), iDrive (e-document management system), LAMS
(load aggregator’s management system), e.Form (mobile contract system), IDAS (digital asset management system) and ICE (content delivery system).
On or
about August 1, 2021, the Company’s wholly-owned subsidiary I-ON Communications, Ltd. (“Communications”) formed a new subsidiary named eformworks Co., Ltd. (“e.Form”) into which Communications moved its electronic signature
operations. Communications contributed approximately $253,000 on August 1, 2021 and $77,000 on September 30, 2022 to e.Form to subscribe for its founders shares and owns 59.82% of the outstanding capital stock of e.Form.
On June 28, 2022, the board of directors of the Company’s wholly-owned subsidiary I-ON Communications, Ltd. (“Communications”) approved to form a new subsidiary named EIPGRID, which provides the
community energy service platforms. Hence Communications will contribute approximately $773,000 to EIPGRID to
subscribe for its founders’ shares, and has considered a subsidiary to consolidate.
On
September 29, 2022, the Company effectuated an Equity Transfer Agreement (the “Sell-Off Agreement”) among the Company, Communications and JFJ Digital Corp., a Delaware corporation (“JFJ”), whereby all of the outstanding equity
of Communications was transferred to JFJ in exchange for the return of 15,306,119 shares of the Company’s Common
Stock held by Jae Cheol Oh and Hong Rae Kim, the Company’s principal executive officer and members of the Board of Directors (the “Sell-Off”) . Pursuant to the Sell-Off Agreement, in addition to acquiring all of the
outstanding capital stock of Communications, JFJ will assume all responsibilities for any debts, obligations and liabilities of Communications and acquire all rights to any assets of Communications, including, but not limited
to, the Subscription Amount.
As a result of the Sell-Off, Communications ceased being a subsidiary of the Company. Accordingly, the operating results of Communications are reported in pretax income (loss), income tax, income (loss) before loss on equity investment, loss on equity investment, income (loss) before non-controlling interest, non-controlling interest income (loss), and net loss from discontinued operations, in the Condensed Consolidated Statements of Operations for all periods presented. In addition, the related assets and liabilities held
prior to the Sell-Off are reported as Assets and Liabilities of Discontinued Operations on the Condensed Consolidated Balance Sheets. All amounts and disclosures included in the Notes to Condensed Consolidated Financial
Statements reflect only the Company’s continuing operations unless otherwise noted. For additional information, see Note 4 and Note 6, “Discontinued Operations.”
|
Summary of Significant Accounting Policies |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies |
The summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated
financial statements and notes are representations of the Company’s management, who is responsible for integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of
America and have been consistently applied in the preparation of the unaudited condensed consolidated financial statements.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts,
transactions, and profits have been eliminated upon consolidation. The accompanying consolidated financial statements and the notes hereto are reported in US Dollars. The consolidated financial statements were prepared and presented in
accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation.
The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of
America (“GAAP”) have been omitted pursuant to such rules and regulations. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year
ended December 31, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated
financial statements, and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The
interim results presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year.
Use of Estimates in the Preparation of Financial Statements
The preparation of the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed
consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could materially differ from these estimates.
Foreign Currency Transaction and Translation
The Company’s principal country of operations is Korea. The financial position and results of operations of the Company are
determined using the local currency, Korean Won (“KRW”), as the functional currency.
Segment Reporting
FASB ASC 280, Segment Reporting, requires public companies to report financial and
descriptive information about their reportable operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available and that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief executive officer has been identified as the chief decision maker.
Revenue Recognition
Revenues are recognized when control of the promised services is transferred to the Company’s customers, in an amount that reflects
the consideration the Company expects to be entitled to in exchange for those services.
The Company’s revenue consists of services provided and commissions. These revenue sources are as follows:
Cash and Cash Equivalents
The Company considers all money market funds and highly liquid financial investments with maturities of three months or less when
acquired to be cash equivalents.
Property and Equipment
Property and equipment are recorded at cost. Depreciation of property and equipment is computed using the double declining
balance method, based on the estimated useful lives as follows:
Repairs and maintenance are expensed as incurred. Expenditures that increase the value or productive capacity of assets are
capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts, and any gain or loss is included in
operations.
The Company is working on a government research project and many other technical innovation projects. The Company receives
government grants that it uses to offset the amount of assets acquired or expenses incurred.
Research and Development
Research and development costs are expensed as incurred. Research and development costs include travel, payroll, and other general
expenses specific to research and development activities.
Intangible Assets
When the Company acquires an intangible asset, it is recorded at acquisition cost (the purchase price of the intangible asset and
the costs directly related to the preparation of the asset for its intended purpose). The cost of an intangible asset acquired in a business combination is measured at the fair value at the acquisition date according to the accounting
standards for business combinations. Intangible assets with a finite life are amortized using the straight-line method over their estimated useful lives.
The estimated useful lives of the respective asset categories are as follows:
Severance and Retirement Benefits
In accordance with the Korean Labor Standard Law, employees and directors with at least one year of service are entitled to receive a lump-sum payment upon termination of their employment, based on their length of service and rate of pay at the time
of termination. Accrued severance benefits represent an amount which would be payable assuming all eligible employees and directors were to terminate their employment as of the balance sheet date. The annual severance benefits expense
charged to operations is calculated based upon the net change in the accrued severance benefits payable at the balance sheet date based on the guidance of FASB ASC 960, Accounting – Defined Benefit Pension Plans.
Impairment analysis for long-lived assets and intangible assets
The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets) are reviewed
for impairment in accordance with the guidance of the FASB ASC 360, Property, Plant, and Equipment and FASB ASC 205 Presentation of Financial Statements. The Company tests for impairment losses
on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of
the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying
amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management
which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including undiscounted cash flow models, quoted market values and third-party
independent appraisals, as considered necessary. The Company had not experienced impairment losses on its long-lived assets and intangible assets during any of the periods presented.
Earnings Per Share
FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and
denominator of the basic and diluted earnings (loss) per share (EPS) computations. Basic earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common shares
outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding
if the potential common shares had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because
their inclusion would be anti-dilutive.
Fair Value Measurements
The Company follows FASB ASC Topic 820, Fair Value Measurements. ASC 820 defines fair value,
establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an
asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.
ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable
inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information
available.
Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of
unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.
The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for
financial instruments measured at fair value on a recurring basis.
The three levels of inputs are as follows:
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the
fair value measurement. Our financial instruments include cash and cash equivalents, restricted cash, short-term financial instruments, short-term loans, accounts receivable, investments, accounts payables and debt. The carrying values of
these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with
similar terms available to us.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of
taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes.
The Company follows FASB ASC 740, Income
Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income
taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates,
applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax
position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not
recognize additional liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25 for the 9 months ended September 30, 2022 and 2021.
Contingencies
Accounting guidance requires that the Company record an estimated loss from a loss contingency when information
available prior to issuance of the consolidated financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the consolidated financial statements and the amount of the
loss can be reasonably estimated. Accounting for contingencies such as legal matters requires significant judgment. Many of these legal matters can take years to resolve. Generally, as the time period increases over which the uncertainties
are resolved, the likelihood of changes to the estimate of the ultimate outcome increases.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk are cash and trade
receivable arising from its normal business activities. The Company deposits its cash in high credit quality institutions. The Company performs ongoing credit evaluations to its customers and establishes allowances when appropriate.
Cash and cash equivalents are maintained at various financial institutions located in Korea and Japan. The Company has
never experienced any losses related to these balances.
Advertising
Costs associated with advertising and promotions are expensed as incurred.
Employee Stock Based Compensation
The Company accounts for its share-based compensation plan in accordance with FASB ASC 718, Stock Compensation, which establishes a fair value method of accounting for stock-based compensation plans. The Company records stock compensation expense based on the value
of the number of shares vesting specified periods over three years.
Stock-based compensation issued to employees and members of our board of directors is measured at the date of grant
based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis.
For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the
Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate,
which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted any fluctuations in these calculations could have a material effect on the results
presented in our consolidated statements of operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our consolidated financial statements.
Non-controlling Interests
Non-controlling interests are measured at their
proportionate share of the acquiree’s identifiable net assets at the acquisition date and is adjusted at each reporting date for the net income (loss) attributable to that non-controlling interest during that period.
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform
on Financial Reporting. This standard provides optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this
standard apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to
contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this standard are elective and are effective upon issuance for all entities. The Company is evaluating the
expedients and exceptions provided by the amendments in this standard to determine their impact.
Other recently issued accounting updates are not expected to have a material impact on the Company’s Interim Financial Statements.
|
Discontinued Operations |
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| Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations |
On September 29, 2022, the Company effectuated an Equity Transfer Agreement (the “Sell-Off Agreement”) among the Company, Communications and JFJ Digital
Corp., a Delaware corporation (“JFJ”), whereby all of the outstanding equity of Communications was transferred to JFJ in exchange for the return of 15,306,119 shares of the Company’s Common Stock held by Jae Cheol Oh and Hong Rae Kim, the Company’s principal executive officer and members of the Board of
Directors (the “Sell-Off”) . Pursuant to the Sell-Off Agreement, in addition to acquiring all of the outstanding capital stock of Communications, JFJ will assume all responsibilities for any debts, obligations and liabilities of Communications
and acquire all rights to any assets of Communications.
As a result of the Sell-Off, Communications ceased being a subsidiary of the Company. Accordingly, the operating results of
Communications are reported in pretax income (loss), income tax, income (loss) before loss on equity investment, loss on equity investment, income (loss) before non-controlling interest, non-controlling interest income (loss), and net income (loss) from discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. In addition, the related assets and liabilities held prior to the Sell-Off are
reported as Assets and Liabilities of Discontinued Operations on the Condensed Consolidated Balance Sheets.
In accordance with FASB ASC 805, Business Combinations, the transaction was determined as transfers and exchanges between entities that are under the common
control. Accordingly, the difference between the proceeds received by the Company and the book value of the Communications and Communication’s subsidiaries will be recognized as an equity transaction and no gain or loss would be recorded.
The following table presents the components of discontinued operations in relation to Communications reported in the consolidated statements of
operations:
The following table presents the major classes of assets and liabilities of discontinued operations of Communications reported in the consolidated
balance sheets:
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Earnings Per Share |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share |
The Company
calculates earnings per share in accordance with FASB ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed
using the weighted average number of shares outstanding during the fiscal year. Potentially dilutive common shares consist of stock options outstanding (using the treasury method).
The following
table sets forth the computation of basic and diluted net income per common share:
No non-vested share awards or non-vested share unit awards were antidilutive for the nine months ended September 30, 2022 and 2021.
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Deconsolidation of Subsidiaries |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2022 | |||
| Deconsolidation of Subsidiaries [Abstract] | |||
| Deconsolidation of Subsidiaries |
As of the Sell-Off date, which was September 29, 2022, the Company had approximately $12.6 million of total assets and $3.6 million of total liabilities on its consolidated balance sheet.
Those assets and liabilities were owned by Communications or Communications’ subsidiaries, such as I-ON, Ltd (Japanese subsidiary), eformworks Co., Ltd. (Korean subsidiary) and EIPGRID (Korean subsidiary). As a result of the Sell-Off Agreement, all
assets and liabilities will be transferred to JFJ and the Company will remain as a shell company with no operating assets or liabilities in its financial statements.
Mr. Oh and Kim returned their shares of the Company, total 15,306,119
approximately 43% of total outstanding shares, to the Company in exchange for the transfer of all outstanding equity of Communications
to JFJ. Stock price on September 29, 2022 was $0.067; therefore, the fair market value the proceeds will be $1,025,510 which was calculated by multiplying the number of shares transferred to the stock price on September 29, 2022.
In accordance with FASB ASC 805, Business Combinations, the transaction was determined as transfers and
exchanges between entities that are under the common control. Accordingly, the difference between the proceeds received by the Company and the book value of the Communications and Communication’s subsidiaries will be recognized as an equity
transaction and no gain or loss would be recorded.
|
Subsequent Events |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2022 | |||
| Subsequent Events [Abstract] | |||
| Subsequent Events |
The Company evaluates subsequent events and transactions that occur after the
balance sheet date up to the date that the financial statements are available to be issued. Any material events that occur between the balance sheet date and the date that the financial statements were available for issuance are disclosed as
subsequent events, while the financial statements are adjusted to reflect any conditions that existed at the balance sheet date. Based upon this review, except as disclosed below or within the footnotes, the Company did not identify any
recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements.
As previously reported, the Company entered into a Series A Preferred Stock
Purchase Agreement (the “Purchase Agreement”) with I-ON Acquisition Corp., a Florida corporation (“IAC”) on September 28, 2022. Pursuant to the terms of the Purchase Agreement, IAC acquired 3,000 shares of a newly created Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred”) for proceeds in the amount of $250,000
(the “Subscription Amount”) in the form of a promissory note (the “Note”) which is secured by the pledge of the Series A Shares, the Series B Shares (as defined herein) and other assets of IAC in a Stock Pledge and Escrow Agreement (the “Pledge
Agreement”). The Purchase Agreement was subsequently amended to include the subscription for 3,600 Series A Shares. Each Series A
Preferred Share is convertible into Ten Thousand (10,000) shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock” and is entitled to vote on matters as to which holders of the Common Stock shall be entitled to vote at a rate
of Ten Thousand (10,000) votes per share of Series A Preferred.
Also on September 28, 2022, the Company entered into a Contribution Agreement
(the “Contribution Agreement”) with certain Purchasers (the “Purchasers”) pursuant to which the Purchasers agreed to purchase 6,000
shares of a newly created Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred”), in exchange
for the Purchasers’ rights and title to certain assets of the Purchasers described in the Contribution Agreement. Each Series B Preferred Share is convertible into One Thousand (1,000) shares of Common Stock and entitled to vote on matters as to which holders of the Common stock shall be entitled to vote at a rate of One Thousand (1,000) votes per Series B Preferred Share.
On January 20, 2023, the Note was fully paid and the Series A Preferred Shares
were issued and released to IAC and the Series B Shares were issued and released to the respective purchasers thereof.
The Company adopted the operations of IAC. Accordingly, the Company is in the
business of providing digital-based enterprise solutions, including the digitization and distribution of precious metals, primarily gold, and other asset-based digital securities on the Blockchain.
Asset digitization includes gold and precious metals with proven reserves that the Company may acquire and for similar assets of independent claim owners. Services
to be provided by the Company are to be managed and administered via Distributed Ledger Technology, also referred to as an independent Node Verification Network, in the form of digital tokens or certificates. The Company’s technology will allow
tier-one and institutional-level financial managers or owners of the assets to fully transact or interface for exchange, settlement, transfer or financial reporting purposes with any regulatory-compliant, blockchain enabled Bank, Financial
Institution, Asset Manager or secure Payment Intermediary. The Company is also engaged in the development of U.S. and global markets, commercial distribution channels and digitization opportunities.
On February 1, 2023, the Company accepted the resignations of Jae Cheol Oh, as the Chief Executive Officer, Treasurer and Chairman, and Jae Ho Cho, Hong Rae Kim,
Eugene Hong, Jean Koh and Charlie Baik as directors of the Company.
To fill the vacancies created by these resignations, Carlos X. Montoya was appointed to the Board of Directors on February 1, 2023. Mr. Montoya was also
appointed as the Company’s President and Rod Smith was appointed Secretary of the Company, both effective immediately.
|
Summary of Significant Accounting Policies (Policies) |
9 Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||||||||
| Summary of Significant Accounting Policies [Abstract] | |||||||||||||
| Principles of Consolidation |
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts,
transactions, and profits have been eliminated upon consolidation. The accompanying consolidated financial statements and the notes hereto are reported in US Dollars. The consolidated financial statements were prepared and presented in
accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation.
|
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| Basis of Presentation |
The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of
America (“GAAP”) have been omitted pursuant to such rules and regulations. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year
ended December 31, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated
financial statements, and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The
interim results presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year.
|
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| Use of Estimates in the Preparation of Financial Statements |
Use of Estimates in the Preparation of Financial Statements
The preparation of the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed
consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could materially differ from these estimates.
|
||||||||||||
| Foreign Currency Transaction and Translation |
Foreign Currency Transaction and Translation
The Company’s principal country of operations is Korea. The financial position and results of operations of the Company are
determined using the local currency, Korean Won (“KRW”), as the functional currency.
|
||||||||||||
| Segment Reporting |
Segment Reporting
FASB ASC 280, Segment Reporting, requires public companies to report financial and
descriptive information about their reportable operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available and that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief executive officer has been identified as the chief decision maker.
|
||||||||||||
| Revenue Recognition |
Revenue Recognition
Revenues are recognized when control of the promised services is transferred to the Company’s customers, in an amount that reflects
the consideration the Company expects to be entitled to in exchange for those services.
The Company’s revenue consists of services provided and commissions. These revenue sources are as follows:
|
||||||||||||
| Cash and Cash Equivalents |
Cash and Cash Equivalents
The Company considers all money market funds and highly liquid financial investments with maturities of three months or less when
acquired to be cash equivalents.
|
||||||||||||
| Property and Equipment |
Property and Equipment
Property and equipment are recorded at cost. Depreciation of property and equipment is computed using the double declining
balance method, based on the estimated useful lives as follows:
Repairs and maintenance are expensed as incurred. Expenditures that increase the value or productive capacity of assets are
capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts, and any gain or loss is included in
operations.
The Company is working on a government research project and many other technical innovation projects. The Company receives
government grants that it uses to offset the amount of assets acquired or expenses incurred.
|
||||||||||||
| Research and Development |
Research and Development
Research and development costs are expensed as incurred. Research and development costs include travel, payroll, and other general
expenses specific to research and development activities.
|
||||||||||||
| Intangible Assets |
Intangible Assets
When the Company acquires an intangible asset, it is recorded at acquisition cost (the purchase price of the intangible asset and
the costs directly related to the preparation of the asset for its intended purpose). The cost of an intangible asset acquired in a business combination is measured at the fair value at the acquisition date according to the accounting
standards for business combinations. Intangible assets with a finite life are amortized using the straight-line method over their estimated useful lives.
The estimated useful lives of the respective asset categories are as follows:
|
||||||||||||
| Severance and Retirement Benefits |
Severance and Retirement Benefits
In accordance with the Korean Labor Standard Law, employees and directors with at least one year of service are entitled to receive a lump-sum payment upon termination of their employment, based on their length of service and rate of pay at the time
of termination. Accrued severance benefits represent an amount which would be payable assuming all eligible employees and directors were to terminate their employment as of the balance sheet date. The annual severance benefits expense
charged to operations is calculated based upon the net change in the accrued severance benefits payable at the balance sheet date based on the guidance of FASB ASC 960, Accounting – Defined Benefit Pension Plans.
|
||||||||||||
| Impairment Analysis for Long-lived Assets and Intangible Assets |
Impairment analysis for long-lived assets and intangible assets
The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets) are reviewed
for impairment in accordance with the guidance of the FASB ASC 360, Property, Plant, and Equipment and FASB ASC 205 Presentation of Financial Statements. The Company tests for impairment losses
on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of
the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying
amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management
which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including undiscounted cash flow models, quoted market values and third-party
independent appraisals, as considered necessary. The Company had not experienced impairment losses on its long-lived assets and intangible assets during any of the periods presented.
|
||||||||||||
| Earnings Per Share |
Earnings Per Share
FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and
denominator of the basic and diluted earnings (loss) per share (EPS) computations. Basic earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common shares
outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding
if the potential common shares had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because
their inclusion would be anti-dilutive.
|
||||||||||||
| Fair Value Measurements |
Fair Value Measurements
The Company follows FASB ASC Topic 820, Fair Value Measurements. ASC 820 defines fair value,
establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an
asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.
ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable
inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information
available.
Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of
unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.
The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for
financial instruments measured at fair value on a recurring basis.
The three levels of inputs are as follows:
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the
fair value measurement. Our financial instruments include cash and cash equivalents, restricted cash, short-term financial instruments, short-term loans, accounts receivable, investments, accounts payables and debt. The carrying values of
these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with
similar terms available to us.
|
||||||||||||
| Income Taxes |
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of
taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes.
The Company follows FASB ASC 740, Income
Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income
taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates,
applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax
position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not
recognize additional liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25 for the 9 months ended September 30, 2022 and 2021.
|
||||||||||||
| Contingencies |
Contingencies
Accounting guidance requires that the Company record an estimated loss from a loss contingency when information
available prior to issuance of the consolidated financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the consolidated financial statements and the amount of the
loss can be reasonably estimated. Accounting for contingencies such as legal matters requires significant judgment. Many of these legal matters can take years to resolve. Generally, as the time period increases over which the uncertainties
are resolved, the likelihood of changes to the estimate of the ultimate outcome increases.
|
||||||||||||
| Concentration of Credit Risk |
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk are cash and trade
receivable arising from its normal business activities. The Company deposits its cash in high credit quality institutions. The Company performs ongoing credit evaluations to its customers and establishes allowances when appropriate.
Cash and cash equivalents are maintained at various financial institutions located in Korea and Japan. The Company has
never experienced any losses related to these balances.
|
||||||||||||
| Advertising |
Advertising
Costs associated with advertising and promotions are expensed as incurred.
|
||||||||||||
| Employee Stock Based Compensation |
Employee Stock Based Compensation
The Company accounts for its share-based compensation plan in accordance with FASB ASC 718, Stock Compensation, which establishes a fair value method of accounting for stock-based compensation plans. The Company records stock compensation expense based on the value
of the number of shares vesting specified periods over three years.
Stock-based compensation issued to employees and members of our board of directors is measured at the date of grant
based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis.
For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the
Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate,
which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted any fluctuations in these calculations could have a material effect on the results
presented in our consolidated statements of operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our consolidated financial statements.
|
||||||||||||
| Non-controlling Interests |
Non-controlling Interests
Non-controlling interests are measured at their
proportionate share of the acquiree’s identifiable net assets at the acquisition date and is adjusted at each reporting date for the net income (loss) attributable to that non-controlling interest during that period.
|
||||||||||||
| Recently Issued Accounting Pronouncements |
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform
on Financial Reporting. This standard provides optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this
standard apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to
contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this standard are elective and are effective upon issuance for all entities. The Company is evaluating the
expedients and exceptions provided by the amendments in this standard to determine their impact.
Other recently issued accounting updates are not expected to have a material impact on the Company’s Interim Financial Statements.
|
Restatement (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restatement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Effects of Restatement on Consolidated Financial Statements |
The following tables present the effects of the restatement on the accompanying consolidated financial statements at September 30, 2022:
Condensed Consolidated Statement of Stockholders’ Equity – As Previously Reported
Condensed Consolidated Statement of Stockholders’ Equity – Restated
|
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Summary of Significant Accounting Policies (Tables) |
9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||
| Summary of Significant Accounting Policies [Abstract] | |||||||
| Estimated Useful Lives of Property and Equipment |
Property and equipment are recorded at cost. Depreciation of property and equipment is computed using the double declining
balance method, based on the estimated useful lives as follows:
|
||||||
| Estimated Useful Lives of Respective Asset Categories |
The estimated useful lives of the respective asset categories are as follows:
|
Discontinued Operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations |
The following table presents the components of discontinued operations in relation to Communications reported in the consolidated statements of
operations:
The following table presents the major classes of assets and liabilities of discontinued operations of Communications reported in the consolidated
balance sheets:
|
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Earnings Per Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Computation of Basic and Diluted Net Income Per Common Share |
The following
table sets forth the computation of basic and diluted net income per common share:
|
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Organization and Operations (Details) - USD ($) |
9 Months Ended | |||
|---|---|---|---|---|
Sep. 29, 2022 |
Jun. 28, 2022 |
Aug. 01, 2021 |
Sep. 30, 2022 |
|
| Organization and Operations [Abstract] | ||||
| Numbers of shares of common stock issued upon sell-off agreement (in shares) | 15,306,119 | |||
| Subsidiaries [Member] | ||||
| Organization and Operations [Abstract] | ||||
| Numbers of shares of common stock issued upon sell-off agreement (in shares) | 15,306,119 | |||
| Subsidiaries [Member] | eformworks Co., Ltd [Member] | ||||
| Organization and Operations [Abstract] | ||||
| Ownership percentage | 59.82% | |||
| Contribution to subsidiary | $ 253,000 | $ 77,000 | ||
| Subsidiaries [Member] | EIPGRID [Member] | ||||
| Organization and Operations [Abstract] | ||||
| Contribution to subsidiary | $ 773,000 |
Summary of Significant Accounting Policies, Foreign Currency Transaction and Translation (Details) |
9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
|
Sep. 30, 2022
₩ / ¥
|
Sep. 30, 2022
₩ / $
₩ / ¥
|
Sep. 30, 2021
₩ / ¥
|
Sep. 30, 2021
₩ / $
|
Sep. 30, 2022
₩ / $
|
Dec. 31, 2021
₩ / ¥
|
Dec. 31, 2021
₩ / $
|
|
| Foreign Currency Transaction and Translation [Abstract] | |||||||
| Foreign currency exchange rate | 9.32 | 9.32 | 1,434.8 | 10.3 | 1,185.5 | ||
| Average exchange rate for the period | 9.91 | 1,268.9 | 10.41 | 1,131.01 | |||
Summary of Significant Accounting Policies, Property and Equipment (Details) |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Facility Equipment [Member] | |
| Property and Equipment [Abstract] | |
| Estimated useful lives | 4 years |
| Automobile [Member] | |
| Property and Equipment [Abstract] | |
| Estimated useful lives | 4 years |
| Office Equipment [Member] | |
| Property and Equipment [Abstract] | |
| Estimated useful lives | 4 years |
Summary of Significant Accounting Policies, Intangible Assets (Details) |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Development Costs [Member] | |
| Intangible Assets [Abstract] | |
| Estimated useful lives of finite lived intangible assets | 3 years |
| Intangible Assets Excluding Development Costs [Member] | |
| Intangible Assets [Abstract] | |
| Estimated useful lives of finite lived intangible assets | 10 years |
| Other Intangible Assets [Member] | Minimum [Member] | |
| Intangible Assets [Abstract] | |
| Estimated useful lives of finite lived intangible assets | 3 years |
| Other Intangible Assets [Member] | Maximum [Member] | |
| Intangible Assets [Abstract] | |
| Estimated useful lives of finite lived intangible assets | 5 years |
Summary of Significant Accounting Policies, Severance and Retirement Benefits (Details) |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Severance and Retirement Benefits [Abstract] | |
| Minimum service to receive lump-sum payment | 1 year |
Summary of Significant Accounting Policies, Employee Stock Based Compensation (Details) |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Employee Stock Based Compensation [Abstract] | |
| Vesting period | 3 years |
Deconsolidation of Subsidiaries (Details) - USD ($) |
Sep. 29, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|---|
| Deconsolidation of Subsidiaries [Abstract] | |||
| Total assets | $ 0 | $ 14,406,446 | |
| Total liabilities | $ 0 | $ 3,516,117 | |
| Numbers of shares of common stock issued upon sell-off agreement (in shares) | 15,306,119 | ||
| Subsidiaries [Member] | |||
| Deconsolidation of Subsidiaries [Abstract] | |||
| Total assets | $ 12,600,000 | ||
| Total liabilities | $ 3,600,000 | ||
| Numbers of shares of common stock issued upon sell-off agreement (in shares) | 15,306,119 | ||
| Percentage of common stock received upon sell-off | 43.00% | ||
| Stock price (in dollars per share) | $ 0.067 | ||
| Fair market value of stock repurchased | $ 1,025,510 |