Stockholders’ Equity

9 Months Ended

Sep. 30, 2024

Stockholders’ Equity [Abstract]

STOCKHOLDERS’ EQUITY

14 STOCKHOLDERS’ EQUITY

a. Common Stock

The Company has total authorized Common Stock of 750,000,000 shares with a par value of $0.0001 each. The Company had 16,185,552 and13,819,889 shares of Common Stock issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.

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

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

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

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

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

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

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

On August 6, 2024, the Company received a conversion notice from the holder of RRH Note 2 (see Note 12) pursuant to which $13,833 of the remaining principal, interest and late payment penalty under the RRH 2 Note was converted into 164,679 shares of Common Stock at a conversion price of $0.084 per share. As a result of the conversion of the RRH Note 2, a warrant, with full ratchet anti-dilution price protection, exercise price was reduced from $0.345 per share to $0.084 per share and the number of shares exercisable was increased from 3,145,342 shares to 12,918,370 shares, resulting in a deemed dividend charge and a credit to additional paid in capital of $426,807.

Between August 6, 2024 and September 17, 2024, in terms of conversion notices received from 4 convertible note holders, including the RRH Note 2 described above, the Company issued 2,365,663 shares of common stock for the conversion of $198,716 of convertible debt at a conversion price of $0.084 per share, realizing an aggregate loss on conversion of $159,493.

b. Restricted stock awards

A summary of restricted stock activity during the period January 1, 2023 to September 30, 2024 is as follows:

	Total restricted shares*		Weighted average fair market value per share*		Total unvested restricted shares*			Weighted average fair market value per share*			Total vested restricted shares*		Weighted average fair market value per share*
Outstanding January 1, 2023		783,167	$	1.50		170,792		$	1.47			612,375	$	1.50
Granted and issued		-		-		-			-			-		-
Forfeited/Cancelled		-		-		-			-			-		-
Vested		-		-		(170,792	)		(1.47	)		170,792		1.47
Outstanding December 31, 2023		783,167	$	1.50		-		$	-			783,167	$	1.50
Granted and issued		-		-		-			-			-		-
Forfeited/Cancelled		-		-		-			-			-		-
Vested		-		-		-			-			-		-
Outstanding September 30, 2024		783,167	$	1.50		-		$	-			783,167	$	1.50

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

The restricted stock granted, issued and exercisable at September 30, 2024 is as follows:

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

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

The Company has recorded an expense of $0 for the three and nine months ended September 30, 2024 and 2023. 

c. Preferred Stock

The Company has authorized 25,000,000 shares of preferred stock with a par value of $0.0001 authorized. No preferred stock was issued and outstanding as of September 30, 2024 and December 31, 2023.

d. Warrants

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

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

In connection with the formation of IPSIPay Express, the Company issued to each of the other venture partners, OpenPath and EfinityPay, IPEX Warrants to purchase an aggregate of 133,334 shares of Common Stock with an exercise of $0.45 per share. The Company is obligated to issue each of OpenPath and EfinityPay additional IPEX Warrants to purchase 199,999 shares of Common Stock at a price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the remaining initial Tranche. Simultaneously with the funding of the second Tranche in September 2023, the Company became obligated to issue to each of OpenPath and EfinityPay an additional IPEX Warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the second Tranche. Simultaneously with the funding of the third Tranche, the Company will issue to each of OpenPath and EfinityPay an additional IPEX warrant to purchase 166,667 shares of Common Stock with an exercise price equal to the average public closing price of the Common Stock for the three trading days immediately prior to the funding of the third Tranche. If the full IPSI Capital Contribution is funded, OpenPath and EfinityPay will receive IPEX Warrants to purchase an aggregate of 1,333,334 shares of Common Stock. See note 1(b) above. As of the date of this Report, it is not expected that the full IPSI Capital Contribution will be required to be funded.

On December 14, 2023, the maturity date of two notes totaling $225,000 ($200,000 and $25,000, respectively) which matured on December 31, 2023 were extended for an additional 3 months to March 30, 2024. In exchange for the maturity date extension, the Company issued the note holders five-year warrants exercisable for 292,463 shares of Common Stock at an exercise price of $0.345 per share. On May 4, 2024, the maturity date of the $200,000 note was further extended to June 14, 2024, and the maturity date of the $25,000 note was further extended to June 30, 2024. In exchange for the maturity date extension, the Company issued to note holders warrants exercisable for 292,463 shares of Common Stock at an exercise price of $0.345 per share.

During 2023, warrants exercisable for 33,334 shares expired as unexercised and an additional warrant exercisable for 1,000,000 shares of Common Stock was forfeited on the disposal of Frictionless and Beyond Fintech.

On March 4, 2024, the Company entered into a Securities Purchase Agreement with an accredited investor, as disclosed in note 12 above. In terms of the Securities Purchase Agreement, the Company issued a five-year warrant to purchase an aggregate of 357,764 shares of the Common Stock at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The Company is under no obligation to register the shares of Common Stock underlying the Note or the Warrant, for public resale.

On March 14, 2024, the Company extended the maturity date of 11 convertible notes maturing between February 13, 2024 and February 23, 2024 by an additional six months and as compensation for the extension, the note holders were issued warrants exercisable for 387,673 shares of Common Stock at an exercise price of $0.345 per share.

Between May 3, 2024 and May 28, 2024, the Company entered into a Securities Purchase Agreements with four accredited investors, as disclosed in note 12 above. In terms of the Securities Purchase Agreement, the Company issued five-year warrants to purchase an aggregate of 468,738 shares of the Common Stock at an exercise price of $0.345 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The Company is under no obligation to register the shares of Common Stock underlying the Note or the Warrant, for public resale.

On May 4, 2024, the maturity date of two notes totaling $225,000 which originally matured on December 31, 2023 and which maturity dates were extended to March 30, 2024, on May 4, 2024, the maturity date of the $200,000 note was further extended to June 14, 2024, and the maturity date of the $25,000 note was further extended to June 30, 2024. In exchange for the maturity date extension, on June 14, 2024, the Company issued to note holders warrants exercisable for 292,463 shares of Common Stock at an exercise price of $0.345 per share.

On August 6, 2024, the Company received a conversion notice from the holder of RRH Note 2 (see Note 12). As a result of the conversion of the RRH Note 2, all warrants of the Company that contain price-based anti-dilution protection had the exercise price of such warrants adjusted to $0.084 per share and certain warrants of the Company that contain “full ratchet” anti-dilution price protection had the number of shares exercisable for such warrants increased by the full ratchet provision and the conversion prices of such warrants adjusted to $0.084 per share. Certain warrants exercisable for 3,145,342 shares of common stock at an exercise price of $0.345 per share, have a full ratchet provision which results in an increase in the number of shares of Common Stock exercisable for such warrants by 9,773,028 to a total number of shares of Common Stock exercisable for such warrants of 12,918,370 and a reduction in the exercise price to $0.084 per share from $0.345 per share, In addition to this, certain warrants exercisable for 457,897 shares of common stock have exercise price protection which reduced the exercise price of these warrants to $0.084 per share from $0.345 per share, resulting in a decrease in potential proceeds receivable from the exercise price of such warrants by $119,511. This resulted in a fair value adjustment charge of $2,478,211 of which $2,051,405 was recorded as a charge to the statement of comprehensive loss as it related to warrants subject to derivative liability treatment and $426,807 was recorded as a deemed dividend expense, as it related to a down round adjustment to the price of a warrant issued during the current year, which is not subject to derivative liability treatment.

The 2023 and 2024 Warrants contain exercise limitations providing that a holder thereof may not exercise the Warrants to the extent that, if after giving effect to such exercise, the holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the outstanding shares of the Common Stock immediately after giving effect to such exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61^st day after such notice.

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

	Nine months ended September 30, 2024
Exercise price	$	0.084 to 0.345
Risk free interest rate		3.73 to 4.56%
Expected life		1 to 5 years
Expected volatility of underlying stock		177.78 to 191.17%
Expected dividend rate		0%

A summary of warrant activity during the period January 1, 2023 to September 30, 2024 is as follows:

	Shares Underlying Warrants*			Exercise price per share*		Weighted average exercise price*
Outstanding January 1, 2023		5,186,376		$	0.345 – 5.625	$	0.9000
Granted		6,289,051			0.345 – 1.50		0.3556
Forfeited		(33,334	)		1.50		1.5000
Cancelled on disposal of investment in Frictionless and Beyond Fintech		(1,000,000	)		0.345		0.3450
Exercised		-			-		-
Outstanding December 31, 2023		10,442,093		$	0.345 – 5.625	$	0.6265
Granted		1,506,638			0.345		0.345
Increase in warrants issued due to anti-dilution price protection		9,773,028			0.084		0.084
Forfeited		-			-		-
Exercised		-			-		-
Outstanding September 30, 2024		21,721,759		$	0.084 – 5.625	$	0.3196

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

The warrants outstanding and exercisable at September 30, 2024 are as follows:

		Warrants Outstanding*						Warrants Exercisable*
Exercise Price*		Number Outstanding*		Weighted Average Remaining Contractual life in years		Weighted Average Exercise Price*		Number Exercisable*		Weighted Average Exercise Price*		Weighted Average Remaining Contractual life in years
$	0.084		13,376,267		3.12				13,376,267				3.12
$	0.345		6,959,041		3.89				6,959,041				3.89
$	0.450		266,668		3.73				266,668				3.73
$	1.035		500,000		0.77				500,000				0.77
$	1.500		33,334		3.87				33,334				3.87
$	4.50		505,560		1.46				505,560				1.46
$	5.625		80,889		1.46				80,889				1.46
			21,721,759		3.28	$	0.3196		21,721,759	$	0.3196		3.28

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

The warrants outstanding have an intrinsic value of $13,376 and $0 as of September 30, 2024 and 2023.

e. Stock options

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

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

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

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

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

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

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

During 2023, the Company cancelled options exercisable for 23,891 shares of Common Stock due to the previous resignation or termination of employees and officers whose stock options were not exercised in accordance with the terms allowed under the plan and were therefore canceled.

During 2024, the Company options exercisable for 6,667 shares of Common Stock expired due to the resignation of a director whose options were not exercised in accordance with the terms allowed under the plan and were therefore canceled.

A summary of option activity during the period January 1, 2023 to September 30, 2024 is as follows:

	Shares Underlying options*			Exercise price per share*		Weighted average exercise price*
Outstanding January 1, 2023		1,543,891		$	1.20 to 12.00	$	4.47
Granted		-			-		-
Forfeited/Cancelled		(23,889	)	$	1.20 to 12.00		5.41
Exercised		-			-		-
Outstanding December 31, 2023		1,520,002		$	1.20 to 12.00	$	4.46
Granted		-			-		-
Forfeited/Cancelled		(6,667	)		1.20		1.20
Exercised		-			-		-
Outstanding September 30, 2024		1,513,335		$	1.20 to 12.00	$	4.47

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

The options outstanding and exercisable at September 30, 2024 are as follows:

		Options Outstanding*						Options Exercisable*
Exercise Price*		Number Outstanding*		Weighted Average Remaining Contractual life in years		Weighted Average Exercise Price*		Number Exercisable*		Weighted Average Exercise Price*		Weighted Average Remaining Contractual life in years
$	1.20		13,334		7.96				13,334				7.96
$	4.50		1,500,001		7.19				1,500,001				7.19
			1,513,335		7.20	$	4.47		1,513,335	$	4.47		7.20

The options outstanding have an intrinsic value of $0 as of September 30, 2024 and 2023.

The option expense was $31,488 and $94,464 for the three months ended September 30, 2024 and 2023, respectively, and $220,416 and $283,392 for the nine months ended September 30, 2024 and 2023, respectively.