Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 15, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | PAYMENT DATA SYSTEMS INC | ||
Entity Central Index Key | 1,088,034 | ||
Trading Symbol | pyds | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding (in shares) | 15,872,578 | ||
Entity Public Float | $ 7,053,731 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 4,800,554 | $ 4,120,738 |
Accounts receivable, net | 969,674 | 907,750 |
Settlement processing assets | 38,027,984 | 43,851,311 |
Prepaid expenses and other | 176,945 | 142,029 |
Note receivable | 150,000 | 200,000 |
Current assets before restricted cash | 44,125,157 | 49,221,828 |
Restricted cash | 14,977,468 | 15,803,641 |
Total current assets | 59,102,625 | 65,025,469 |
Property and equipment, net | 2,105,186 | 2,494,510 |
Other assets: | ||
Intangibles, net | 4,676,427 | 172,899 |
Deferred tax asset | 1,394,000 | 1,621,000 |
Other assets | 157,565 | 200,808 |
Total other assets | 6,227,992 | 1,994,707 |
Total Assets | 67,435,803 | 69,514,686 |
Current Liabilities: | ||
Accounts payable | 300,736 | 145,044 |
Accrued expenses | 1,006,262 | 703,322 |
Settlement processing obligations | 38,027,984 | 43,851,311 |
Current liabilities before restricted cash | 39,334,982 | 44,699,677 |
Restricted cash | 14,977,468 | 15,803,641 |
Total current liabilities | 54,312,450 | 60,503,318 |
Stockholders' Equity: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized; -0- shares outstanding in 2017 and 2016 | 0 | 0 |
Common stock, $0.001 par value, 200,000,000 shares authorized; 16,874,235 and 12,392,288 issued and 16,201,634 and 11,795,939 outstanding in 2017 and 2016 (see Note 11) | 186,299 | 181,818 |
Additional paid-in capital | 74,041,083 | 63,881,365 |
Treasury stock, at cost; 672,601 and 596,349 shares in 2017 and 2016 (see Note 11) | (831,059) | (718,149) |
Deferred compensation | (7,012,544) | (4,082,025) |
Accumulated deficit | (53,260,426) | (50,251,641) |
Total stockholders' equity | 13,123,353 | 9,011,368 |
Total Liabilities and Stockholders' Equity | $ 67,435,803 | $ 69,514,686 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 16,874,235 | 12,392,288 |
Common stock, shares outstanding (in shares) | 16,201,634 | 11,795,939 |
Treasury stock (in shares) | 672,601 | 596,349 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Revenues | $ 14,571,158 | $ 12,076,358 |
Operating expenses: | ||
Cost of services | 10,802,932 | 8,293,354 |
Selling, general and administrative: | ||
Stock-based compensation | 968,141 | 1,314,778 |
Cancellation of stock-based compensation | 0 | (261,208) |
Other expenses | 4,378,969 | 3,188,407 |
Depreciation and amortization | 1,258,132 | 901,600 |
Total operating expenses | 17,408,174 | 13,436,931 |
Operating (loss) | (2,837,016) | (1,360,573) |
Other income: | ||
Interest income | 100,964 | 97,322 |
Other income | 1,583 | 99,277 |
Other income, net | 102,547 | 196,599 |
(Loss) before income taxes | (2,734,469) | (1,163,974) |
Income taxes | 274,316 | 32,668 |
Net (Loss) | $ (3,008,785) | $ (1,196,642) |
Earnings (Loss) Per Share | ||
Basic earnings (loss) per common share (in dollars per share) | $ (0.33) | $ (0.15) |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.33) | $ (0.15) |
Weighted average common shares outstanding (see Note 12) | ||
Basic (in shares) | 8,995,883 | 7,838,197 |
Diluted (in shares) | 8,995,883 | 7,838,197 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) | Total | Private Placement | Akimbo | Singular Payments, LLC | Common Stock | Common StockPrivate Placement | Common StockAkimbo | Common StockSingular Payments, LLC | Additional Paid - In Capital | Additional Paid - In CapitalPrivate Placement | Additional Paid - In CapitalAkimbo | Additional Paid - In CapitalSingular Payments, LLC | Treasury Stock | Deferred Compensation | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2015 | 12,379,537 | ||||||||||||||
Beginning balance at Dec. 31, 2015 | $ 9,115,276 | $ 185,533 | $ 64,302,498 | $ (286,394) | $ (6,031,362) | $ (49,054,999) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Issuance of common stock, restricted (shares) | 30,000 | 167,153 | |||||||||||||
Issuance of common stock, restricted | 51,700 | $ 419,221 | $ 30 | $ 168 | 51,670 | $ 419,053 | |||||||||
Deferred compensation amortization | 914,902 | 914,902 | |||||||||||||
Issuance of common stock under equity incentive plan (in shares) | 82,265 | ||||||||||||||
Issuance of common stock under equity incentive plan | 399,874 | $ 87 | 329,019 | 70,768 | |||||||||||
Purchase of treasury stock | (431,755) | (431,755) | |||||||||||||
Reversal of deferred compensation amortization that did not vest (in shares) | (266,667) | ||||||||||||||
Reversal of deferred compensation amortization that did not vest | (261,208) | $ (4,000) | (1,220,875) | 963,667 | |||||||||||
Net (loss) | (1,196,642) | (1,196,642) | |||||||||||||
Ending balance (in shares) at Dec. 31, 2016 | 12,392,288 | ||||||||||||||
Ending balance at Dec. 31, 2016 | 9,011,368 | $ 181,818 | 63,881,365 | (718,149) | (4,082,025) | (50,251,641) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Issuance of common stock, restricted (shares) | 20,000 | 1,176,000 | 1,515,152 | ||||||||||||
Issuance of common stock, restricted | 40,200 | $ 2,725,340 | $ 3,500,000 | $ 20 | $ 1,176 | $ 1,515 | 40,180 | $ 2,724,164 | $ 3,498,485 | ||||||
Issuance of common stock, employees, restricted (in shares) | 1,395,334 | ||||||||||||||
Issuance of common stock, employees, restricted | 0 | $ 1,395 | 3,082,293 | (3,083,688) | |||||||||||
Deferred compensation amortization | 783,169 | 783,169 | |||||||||||||
Issuance of common stock under equity incentive plan (in shares) | 375,461 | ||||||||||||||
Issuance of common stock under equity incentive plan | 184,971 | $ 375 | 814,596 | (630,000) | |||||||||||
Purchase of treasury stock | (112,910) | (112,910) | |||||||||||||
Net (loss) | (3,008,785) | (3,008,785) | |||||||||||||
Ending balance (in shares) at Dec. 31, 2017 | 16,874,235 | ||||||||||||||
Ending balance at Dec. 31, 2017 | $ 13,123,353 | $ 186,299 | $ 74,041,083 | $ (831,059) | $ (7,012,544) | $ (53,260,426) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities | ||
Net (loss) | $ (3,008,785) | $ (1,196,642) |
Adjustments to reconcile net (loss) to net cash (used) provided by operating activities: | ||
Depreciation | 761,660 | 738,461 |
Amortization | 496,472 | 163,139 |
Bad debt expense | 71,667 | 0 |
Goodwill | 0 | 5,777 |
Non-cash stock based compensation | 968,141 | 1,314,778 |
Cancellation of stock based compensation | 0 | (261,208) |
Issuance of stock to consultant | 40,200 | 51,700 |
Issuance of stock to Akimbo to settle Indemnification liability | 0 | 419,221 |
Deferred income tax | 227,000 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (133,591) | 227,634 |
Prepaid expenses and other | (34,916) | 7,089 |
Other assets | 43,243 | 2,041 |
Accounts payable and accrued expenses | 458,632 | (623,552) |
Net cash (used) provided by operating activities | (110,277) | 848,438 |
Investing Activities | ||
Purchases of property and equipment | (372,337) | (155,551) |
Purchase of Singular Payments, LLC | (900,000) | 0 |
Advance to Singular Payments, LLC | (600,000) | 0 |
Note receivable | 50,000 | (200,000) |
Net cash (used) by investing activities | (1,822,337) | (355,551) |
Financing Activities | ||
Proceeds from public offering, net of expenses | 2,725,340 | 0 |
Purchases of treasury stock | (112,910) | (431,755) |
Net cash (used) by financing activities | 2,612,430 | (431,755) |
Change in cash and cash equivalents | 679,816 | 61,132 |
Cash and cash equivalents, beginning of year | 4,120,738 | 4,059,606 |
Cash and Cash Equivalents, End of Year | 4,800,554 | 4,120,738 |
Supplemental disclosures of cash flow information | ||
Interest | 0 | 0 |
Income taxes | 45,000 | 48,164 |
Non-cash transactions: | ||
Issuance of common stock in exchange for purchases of Singular Payments, LLC | 3,500,000 | 0 |
Forgiveness of note receivable in exchange for purchase of Singular Payments, LLC | 600,000 | 0 |
Issuance of deferred stock compensation | $ 3,713,688 | $ 0 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Organization: Payment Data Systems, Inc., along with its subsidiaries, FiCentive, Inc., a Nevada corporation, and Zbill, Inc., a Nevada corporation, provides integrated electronic payment services, including credit and debit card-based processing services and transaction processing via the Automated Clearing House (“ACH”) network to billers and retailers. In addition, the Company operates an Internet electronic payment processing service for consumers under the domain name www.billx.com and various other product websites, such as akimbocard.com and singularpayments.com. Principles of Consolidation and Basis of Presentation: The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition: Revenue consists primarily of fees generated through the electronic processing of payment transactions and related services, and is recognized as revenue during the period the transactions are processed or when the related services are performed. The Company complies with ASC 605-45-45 and reports revenues gross as a principal versus net as an agent. Although some of the Company’s processing agreements vary with respect to specific credit risks, the Company has determined that for each agreement it is acting in the principal role. Merchants may be charged for these processing services at a bundled rate based on a percentage of the dollar amount of each transaction and, in some instances, additional fees are charged for each transaction. Certain merchant customers are charged a flat fee per transaction, while others may also be charged miscellaneous fees, including fees for chargebacks or returns, monthly minimums, and other miscellaneous services. Revenues derived from electronic processing of credit, debit, and prepaid card transactions that are authorized and captured through third-party networks are reported gross of amounts paid to sponsor banks as well as interchange and assessments paid to credit card associations (Visa, MasterCard, and Discover). Revenue also includes any up-front fees for the work involved in implementing the basic functionality required to provide electronic payment processing services to a customer. Revenue from such implementation fees is recognized over the term of the related service contract. Sales taxes billed are reported directly as a liability to the taxing authority, and are not included in revenue. Cash and Cash Equivalents: Cash and cash equivalents includes cash and other money market instruments. The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Settlement Processing Assets and Obligations: Settlement processing assets and obligations represent intermediary balances arising in our settlement process for merchants. Restricted Cash: Restricted cash includes certain funds collected from our merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under our agreement with the merchant. The funds may be used to offset any returned items or chargebacks to the Company and to indemnify the Company against third-party claims and any expenses that may be created by the customer as a result of any claim or fine. The Company may require the customer to provide a security deposit based on estimated transaction volumes, amounts and chargebacks and may revise the deposit based on periodic review of the same items. Repayment of the deposit to the customer is generally within 90 to 180 days beyond the date the last item is processed by the Company on behalf of the customer. The customer security deposit does not accrue interest to the benefit of the customer. Accounts Receivable/Allowance for Estimated Losses: Accounts Receivable are reported as outstanding principal net of an allowance for doubtful accounts of $61,223 and $26,556 at December 31, 2017 and 2016 , respectively. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability or failure of its customers to make required payments. The Company determines the allowance based on an account-by-account review, taking into consideration such factors as the age of the outstanding balance, historical pattern of collections and financial condition of the customer. Past losses incurred by the Company due to bad debts have been within its expectations. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make contractual payments, additional allowances might be required. Estimates for bad debt losses are variable based on the volume of transactions processed and could increase or decrease accordingly. The Company normally does not charge interest on accounts receivable. Property and Equipment: Property and equipment are stated at cost. Depreciation and amortization are computed on a straight-line method over the estimated useful lives of the related assets, ranging from three to ten years. Leasehold improvements are amortized over the lesser of the estimated useful lives or remaining lease period. Expenditures for maintenance and repairs are charged to expense as incurred. Accounting for Internal Use Software: The Company capitalizes the costs associated with software developed or obtained for internal use when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed-in service. Capitalized costs include only (i) external direct costs of materials and services consumed in developing or obtaining internal-use software, (ii) payroll and other related costs for employees who are directly associated with and who devote time to the internal-use software project, and (iii) interest costs incurred, when material, while developing internal-use software. The Company ceases capitalization of such costs no later than the point at which the project is substantially complete and ready for its intended purpose. For the years ended December 31, 2017 and December 31, 2016, the Company capitalized $267,869 and $136,537 , respectively. Concentration of Credit Risk: Financial instruments that potentially expose the Company to credit risk consist of cash and cash equivalents, and accounts receivable. The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC ( $250,000 ). Accounts receivables potentially subject the Company to concentrations of credit risk. The Company’s customer base operates in a variety of industries and is geographically dispersed although the relatively small number of customers increases the risk. The Company closely monitors extensions of credit. Estimated credit losses have been recorded in the consolidated financial statements. Recent credit losses have been within management's expectations. No customer accounted for more than 10% of revenues in 2017 or 2016 . Fair Value of Financial Instruments: Cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term borrowings are reflected in the accompanying consolidated financial statements at cost, which approximates fair value because of the short-term maturity of these instruments. Impairment of Long-Lived Assets and Intangible Assets: The Company reviews periodically, on at least an annual basis, the carrying value of its long-lived assets and intangible assets and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. To the extent the fair value of a long-lived asset, determined based upon the estimated future cash inflows attributable to the asset, less estimated future cash outflows, is less than the carrying amount, an impairment loss is recognized. Reserve for Processing Losses: If, due to insolvency or bankruptcy of one of the Company’s merchant customers, or for any other reason, the Company is not able to collect amounts from its card processing, credit card, ACH or merchant prepaid customers that have been properly "charged back" by the customer or if a prepaid cardholder incurs a negative balance, the Company must bear the credit risk for the full amount of the transaction. The Company may require cash deposits and other types of collateral from certain merchants to minimize any such risk. In addition, the Company utilizes a number of systems and procedures to manage merchant risk. ACH, prepaid and credit card merchant processing loss reserves are primarily determined by performing a historical analysis of our loss experience and considering other factors that could affect that experience in the future, such as the types of transactions processed and nature of the merchant relationship with its consumers and the Company with its prepaid card holders. This reserve amount is subject to the risk that actual losses may be greater than our estimates. The Company has not incurred any significant processing losses to date. Estimates for processing losses vary based on the volume of transactions processed and could increase or decrease accordingly. The Company evaluates its risk for such transactions and estimates its potential processing losses based primarily on historical experience and other relevant factors. At December 31, 2017 and, 2016 , the Company’s reserve for processing losses was $172,832 . Advertising Costs: Advertising is expensed as incurred. The Company incurred approximately $100,000 and $46,000 in advertising costs in 2017 and 2016 , respectively. Income Taxes: Deferred tax assets and liabilities are recorded based on difference between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Deferred tax assets are computed with the presumption that they will be realizable in future periods when taxable income is generated. Predicting the ability to realize these assets in future periods requires a great deal of judgment by management. U.S. generally accepted accounting principles prescribe a recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Income tax benefits that meet the “more likely than not” recognition threshold should be recognized. Goodwill is amortized over 15 years for tax purposes. As with all businesses, the Company’s tax returns are subject to periodic examination. The Company’s federal returns for the past four years remain open to examination. The Company is subject to the Texas margin tax. Management is not aware of any tax positions that would have a significant impact on its financial position. The Company has approximately $41.3 million of net operating loss carryforwards. However, the Company cannot predict with reasonable certainty that all of the available net operating loss carryforwards will be realized in future periods. Accordingly, a valuation allowance has been provided to reduce the net deferred tax assets to $1.4 million . Management does not anticipate a significant change in the 6 months after the assessment and will review the deferred tax asset balance at June 30, 2018, or earlier as events may warrant. Stock-Based Compensation: The Company recognizes as compensation expense all share-based payment awards made to employees and directors, including grants of stock options and warrants, based on estimated fair values. Fair value is generally determined based on the closing price of the Company’s common stock on the date of grant. 401(k) Plan: The Company has a defined contribution plan (the “401(k) Plan”) pursuant to Section 401(k) of the Internal Revenue Code. All eligible full and part-time employees of the Company who meet certain age requirements may participate in the 401(k) Plan. Participants may contribute between 1% and 15% of their pre-tax compensation, but not in excess of the maximum allowable under the Code. The 401(k) Plan allows for discretionary and matching contributions by the Company. In 2017 , the Company matched 100% of employee contributions up to 3% and 50% of the employee contribution over 3% with a maximum employer contribution of 5% . The Company made matching contributions of $65,478 and $52,905 in 2017 and 2016 , respectively. Earnings (Loss) Per Share: Basic and diluted earnings (loss) per common share are calculated by dividing earnings by the weighted average number of common shares outstanding during the period. New Accounting Pronouncement: In May 2014, the Financial Accounting Standards Board (FASB) issued accounting standards update, ASU 2014-9, “Revenue from Contracts with Customers (Topic 606) and a subsequent amendment to the standard in March 2016, ASU 2016-8 “Revenue from Contracts with Customers, Principal versus Agent Consideration (Reporting Revenue Gross versus Net) . The original standard provides guidance on recognizing revenue, including a five step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires additional disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard, as amended, is effective for for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The amendment allows companies to use either a full retrospective or a modified retrospective approach to adopt this ASU. The Company has evaluated the potential impact that the adoption of this standard will have on its financial position, results of operations, and related disclosures, and will adopt the provisions of this new standard in the first quarter of 2018. The Company functions as the merchant of record and has primary responsibility for providing end-to-end payment processing services for its clients. The Company's clients contract with the Company for all credit card processing services including transaction authorization, settlement, dispute resolution, security and risk management solutions, reporting and other value-added services. As such, the Company is the primary obligor in these transactions and is solely responsible for all processing costs, including interchange fees. Further, the Company sets prices as it deems reasonable for each merchant. The gross fees the Company collects are intended to cover the interchange, assessments and other processing fees and include the Company's margin on transactions processed. For these reasons, the Company is the principal obligor in the contractual relationship with its customers and therefor, the Company records its revenues, including interchange and assessments on a gross basis. The Company's existing revenue recognition process will remain intact and we will continue to record revenues at the gross amount billed due to its primary responsibility for providing end-to-end payment processing services for its clients. In February 2016, the FASB issued, “Leases (Topic 842),” which is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee will be required to recognize on the balance sheet an asset (right to use) and a liability (lease obligation) for leases with terms of more than 12 months. Accounting by lessors will remain largely unchanged from current U.S. generally accepted accounting principles. The new standard is effective for public companies for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Management does not expect that adopting this standard will have a significant impact on its financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230):Restricted Cash . The update requires that companies should include cash and cash equivalents with restrictions in total cash and cash equivalents on the statement of cash flows. If restricted cash is presented separately from cash and cash equivalents on the balance sheet, a reconciliation between the statement of financial position and the statement of cash flow must be disclosed. The update requires retrospective application to all periods presented. The effective date of this update is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company has evaluated this updated requirement and will adopt this policy in 2018. |
Acquisition of Singular Payment
Acquisition of Singular Payments, LLC. | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition of Singular Payments, LLC. | Acquisition of Singular Payments, LLC. On September 1, 2017, the Company entered into a membership interest purchase agreement with Singular Payments, LLC (“Singular”), a Florida limited liability company in the business of credit card processing, pursuant to which the Company agreed to purchase all of the membership interest in Singular Payments, LLC. The aggregate purchase price was $5,000,000 and consisted of a cash payment of $1,500,000 at closing, minus the balance on the outstanding note receivable of $600,000 and subject to adjustment based on net working capital, and $3,500,000 in shares of common stock, or 1,515,152 shares of the Company's common stock, $0.001 par value per share, valued at $2.31 per share. Such shares are unregistered and subject to a lock-up agreement of 24 months. The final number of shares issued, and the related value per each such share, was determined using the volume-weighted average daily closing price for the shares of common stock for the 5 business days immediately preceding September 1, 2017, or $2.31 . The purchase price was allocated to the net assets acquired based upon their estimated fair values as follows: Estimated Fair Estimated Useful Value Life Customer list $ 5,000,000 5 Years Total $ 5,000,000 The 2017 consolidated statement of operations includes 4 months of Singular operations, which is approximately $3.7 million of revenue and $0.6 million of operating loss. Unaudited Pro Forma Information The Company estimates that the revenues and net income for the periods below that would have been reported if the Singular acquisition would have taken place on the first day of the Company's 2016 calendar year would be as follows: 2017 2016 Revenues $ 22,079,244 $ 23,000,000 Gross Profit 4,521,507 5,146,325 Net (Loss) (3,804,700 ) (2,568,074 ) Income per share: Basic $ (0.37 ) $ (0.27 ) Diluted $ (0.37 ) $ (0.27 ) Amounts set forth above are not necessarily indicative of the results that would have been obtained had the Singular acquisition had taken place on the first day of the Company's 2016 calendar year or of the results that may be achieved by the combined enterprise in the future. |
Note Receivable
Note Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Note Receivable | Note Receivable On February 2, 2016, the Company entered into a loan and security agreement with C2Go, Inc., a Nevada corporation, pursuant to which the Company loaned a principal amount of $ 200,000 to C2Go with an interest rate of 10% per annum for a term of 18 months. C2Go’s obligations under the loan and security agreement are secured by a first lien on all assets of C2Go. The debt is senior, and any future debt incurred by C2Go must be subordinated to the debt of the loan and security agreement. Upon maturity of the debt, C2Go was required to issue to the Company 5% of the issued and outstanding shares of common stock of C2Go, on a fully diluted basis, giving effect to any convertible securities, warrants, etc., such shares being validly issued, fully-paid and non-assessable shares for no additional consideration. C2Go defaulted on the Note, therefore the interest rate under the loan and security agreement rose to 18% per annum. The full principal of the note, plus accrued and unpaid interest, was due to be repaid on or before August 2, 2017. C2Go did not make any payment on that date. Pursuant to the Note, C2Go had until August 16, 2017 to cure the payment default. The default was not cured. On August 28, 2017, the Company filed a lawsuit against C2Go, Inc, alleging multiple defaults under the loan and security agreement. The case is pending in Bexar County, San Antonio, TX. On December 7, 2017, the Company entered into an agreement jointly with C2Go and Mercury Investment Partners LLC whereby upon the receipt in full of the $200,000 , full release of all obligations of C2Go to the Company will occur. Under the agreement, FiCentive, Inc. received $50,000 due upon signing of the agreement on December 7, 2017. The Company is owed $50,000 due on April 30, 2018 and a final payment of $100,000 due on or before October 31, 2018. Upon payment in full of the $200,000 owed, the Company agreed to waive all interest due and payable under the terms of the loan. There are no assurances that the Company will be able to recover the remaining $ 150,000 principal and there are no assurances there will be any assets for the Company to recover from its lien on all the assets of C2Go, Inc. if payment in full of the obligation is not made. At September 30, 2017, the Company wrote off the accrued interest of $31,667 previously recognized on the C2Go note receivable. As of December 31, 2017, the Company has $ 0 recorded as an allowance for credit losses on this note receivable. On March 7, 2017, the Company agreed to provide $500,000 to Singular Payments, LLC, a Florida limited liability company, under a secured line of credit promissory note. Interest on the note did not accrue until the earlier of August 31, 2017, the date of closing and funding the Company’s proposed acquisition of Singular Payments or the termination of a non-binding letter of intent regarding the proposed acquisition; or until such mutually agreed upon extended date. The loan was increased to $600,000 on August 2, 2017. The Singular Payments, LLC acquisition closed on September 1, 2017. The note receivable was applied to the cash purchase price as part of the Purchase Agreement. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following at December 31: 2017 2016 Software $ 4,060,964 $ 3,692,474 Equipment 813,000 812,049 Furniture and fixtures 217,345 214,450 Leasehold improvements 25,353 25,353 Total property and equipment 5,116,662 4,744,326 Less: accumulated depreciation (3,011,476 ) (2,249,816 ) Net property and equipment $ 2,105,186 $ 2,494,510 |
Intangibles
Intangibles | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles | Intangibles Akimbo Acquisition (2015) Akimbo intangibles consist of the customer list and contracts at cost of $396,824 (net of accumulated amortization of $396,824 ) and goodwill of $9,759 acquired in the purchase of the assets of Akimbo Financial, Inc. in 2015 . The intangible asset is fully amortized at December 31, 2017. The fair value of the customer list and contracts was calculated using the net present value of the projected gross profit to be generated by the customer list over a period of 36 months beginning in January 2015 and was amortized over 3 years at $163,139 annually. Goodwill was determined based on the purchase price paid over the assets acquired and has an indefinite life, which is tested for impairment annually. Singular Payments, LLC Acquisition (2017) Singular Payments, LLC intangibles consist of customer list assets of $5,000,000 at cost (net of accumulated amortization of $333,333 ) acquired in the purchase of the membership interest of Singular Payments, LLC in 2017. The fair value of the customer list was calculated using the net present value of the projected gross profit to be generated by the customer list over the next 60 months beginning in September 2017 and ending in August 2022. Amortization expense in 2017 was $333,333 . Annual amortization expense will be $1,000,000 . |
Valuation Accounts
Valuation Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation Accounts | Valuation Accounts Valuation and allowance accounts included the following at December 31: Balance Beginning of Year Net Charged to Costs and Expenses Transfers Net Write-Off Balance End of Year 2017 Allowance for doubtful accounts $ 26,556 $ 71,667 $ — $ (37,000 ) $ 61,223 Reserve for processing losses $ 172,832 — — $ 172,832 2016 Allowance for doubtful accounts $ 35,033 $ — $ — $ (8,477 ) $ 26,556 Reserve for processing losses $ 248,868 — — $ (76,036 ) $ 172,832 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following balances at December 31: 2017 2016 Accrued commissions $ 331,214 $ 221,837 Reserve for merchant losses 172,832 172,832 Other accrued expenses 387,882 192,769 Accrued taxes 45,129 38,469 Accrued salaries 69,205 77,415 Total accrued expenses $ 1,006,262 $ 703,322 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Operating Leases | Operating Leases The Company leases approximately 7,200 square feet of office space that houses its principal executive offices and operations. Rental expense under the operating lease was approximately $197,300 and $158,200 for the years ended December 31, 2017 and 2016 , respectively. The lease expires on April 30, 2018. The Company assumed ongoing obligations of the Singular Payments' leased space in Nashville, TN and St. Augustine, FL to house their sales offices and operations. Rental expense under the operating leases was $25,236 for the year ended December 31, 2017. The Company also leases select computer equipment over a 36 month period initiated in May, 2016. The lease expires in April, 2019. Rental expense under the operating lease was $72,000 for the year ended December 31, 2017 and $45,500 for the year ended December 31, 2016. The future operating lease payments as December 31, 2017 are as follows: Year ended December 31, 2018 $ 125,400 2019 72,000 2020 28,000 2021 1,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Louis Hoch During the year ended December 31, 2017 and 2016 , the Company purchased $1,826 and $2,250 , respectively, of corporate imprinted sportswear, promotional items and caps from Angry Pug Sportswear. Louis Hoch, the Company’s President and Chief Executive Officer is a 50% owner of Angry Pug Sportswear. Miguel Chapa During the year ended December 31, 2017 and 2016 , the Company received $29,555 and $51,500 in revenue from Lush Rooftop. Miguel Chapa, a member of our Board of Directors, is an owner in Lush Rooftop. Louis Hoch, the Company’s President and Chief Executive Officer, is also a minority owner in Lush Rooftop. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. On December 22, 2017, the President of the United States signed the Tax Cuts and Jobs Act (“U.S. Tax Reform”), which enacts a wide range of changes to the U.S. corporate income tax system. The impact of U.S. Tax Reform primarily represents the Company’s estimates of revaluing the Company’s U.S. deferred tax assets and liabilities based on the rates at which they are expected to be recognized in the future. For U.S. federal purposes the corporate statutory income tax rate was reduced from 35% to 21%, effective for the 2018 tax year. Based on the Company’s historical financial performance, at December 31, 2017, the net deferred tax asset position was remeasured at the lower corporate rate of 21% and a tax expense was recognized to adjust net deferred tax assets to the reduced value. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31: 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 8,665,000 $ 13,676,000 Depreciation and amortization 322,000 313,000 Non-cash compensation 627,000 279,000 Other 23,000 23,000 Valuation Allowance (8,243,000 ) (12,670,000 ) Deferred tax asset $ 1,394,000 $ 1,621,000 Management has reviewed its net deferred asset position, and due to the history of operating losses has determined that the application of a valuation allowance at December 31, 2017 and December 31, 2016 is warranted. If applicable, the Company would recognize interest expense and penalties related to uncertain tax positions in interest expense. As of December 31, 2017 , the Company had not accrued any interest or penalties related to uncertain tax provisions. The Company has net operating loss carryforwards for tax purposes of approximately $41.3 million that begin to expire in the year 2021 . Approximately $0.1 million of the total net operating loss is subject to an IRS Section 382 limitation from 1999. The tax provision for federal and state income tax is as follows for the year ended December 31: 2017 2016 Current provision: Federal $ — $ — State 47,316 32,668 47,316 32,668 Deferred provision: Federal expense 227,000 — Expense for income taxes $ 274,316 $ 32,668 The reconciliation of federal income tax computed at the U.S. federal statutory tax rates to total income tax expense (benefit) is as follows for the year ended December 31: 2017 2016 Income tax expense (benefit) at 34% $ (1,023,000 ) $ (407,000 ) Change in valuation allowance 4,427,000 331,000 Permanent and other differences (2,557,000 ) 76,000 Deferred tax impact of enacted tax rate and law changes (620,000 ) — Alternative minimum tax and Texas margin tax 47,316 32,668 Income tax expense (benefit) $ 274,316 $ 32,668 |
Stock Options, Incentive Plans,
Stock Options, Incentive Plans, Stock Awards, and Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options, Incentive Plans, Stock Awards, and Employee Benefit Plan | Stock Options, Incentive Plans, Stock Awards, and Employee Benefit Plan Stock Option Plans: The Company’s 2015 Equity Incentive Plan provides for the grant of incentive stock options as defined in Section 422 of the Internal Revenue Code and the grant of Stock Options, Restricted Stock, Restricted Stock Units, Performance Awards, or other Awards to employees, non-employee directors, and consultants. The Board of Directors has authorized 5,000,000 shares of common capital stock for issuance under the 2015 Stock Incentive Plan, including automatic increases provided for in the 2015 Equity Incentive Plan through fiscal year 2025. The number of shares of common stock reserved for issuance under the 2015 Equity Incentive Plan will automatically increase, with no further action by the stockholders, on the first business day of each fiscal year during the term of the Plan, beginning January 1, 2016, in an amount equal to 5% of the issued and outstanding shares of common stock on the last day of the immediately preceding year, or such lesser amount if so determined by the Board or the Plan Administrator. During 2017, the Company granted 1,695,334 restricted shares of stock to employees, officers and directors. During 2017 , the Company granted 66,667 restricted stock units to one director and 105,000 restricted stock units to employees either as a new hire bonus, or performance bonus. Treasury Stock : During 2017 , the Company purchased 56,973 shares with a value of $89,250 to cover the employee’s and director’s share to tax liabilities related to stock grants maturing on December 27, 2016. The Company also purchased 19,379 shares of common stock with a value of $23,760 through Wedbush under an agreement where shares were purchased at market at the discretion of Wedbush. Stock Awards : The Company has granted restricted stock awards to its employees at different periods from 2005 through 2017. The majority of the shares granted to those employees vest 10 years from the grant date, and is forfeited in the event that the recipient’s employment relationship with the Company is terminated prior to vesting. The Company granted 300,000 shares of common stock with a 10 year vesting period to Vaden Landers as a part of his employment agreement. The Company granted 1,395,334 shares of stock to employees and directors as a performance bonus. Executive offices included in the grant were Louis Hoch ( 300,000 shares) and Tom Jewell ( 150,000 shares). The Company entered into a Director’s agreement with Brad Rollins in 2017 where the director received 66,667 restricted stock units, pursuant and subject to the terms of the Company’s 2015 Equity Incentive Plan. The initial 22,223 shares vests on May 1, 2018 , the second installment of 22,222 shares vesting on May 1, 2019 , and the third installment of 22,222 shares vests on May 1, 2020 . During 2017 , a portion of the restricted stock awards were granted, but not issued and are not listed as outstanding in the financial statements for 2017 . Stock-based compensation expense related to stock options and restricted stock awards was $968,141 for 2017 and $968,141 for 2016 . A summary of stock awards outstanding and 2017 activities are as follows: Stock Awards Shares Weighted Average Exercise Price Weighted Average Contractual Remaining Life Aggregate Intrinsic Value Outstanding, December 31, 2016 3,361,276 $ 1.85 Granted 1,695,334 2.23 Vested 36,674 — Forfeited — — Outstanding, December 31, 2017 5,019,936 $ 1.98 8.51 $ 2,773,236 Expected to Vest after December 31, 2017 5,019,936 $ 1.98 8.51 $ 2,773,236 As of December 31, 2017 , there were $7,012,544 of unrecognized compensation costs related to the un-vested share-based compensation arrangements granted. The cost is expected to be recognized over the weighted average remaining contractual life of 8.51 years. The aggregate intrinsic value represents the difference between the weighted average exercise price and the closing price of the Company’s stock on December 31, 2017 , or $2.53 . Employee Stock Purchase Plan : The Company established the 1999 Employee Stock Purchase Plan (“ESPP”) under the requirements of Section 423 of the Internal Revenue Code to allow eligible employees to purchase the Company’s common stock at regular intervals. Participating employees may purchase common stock through voluntary payroll deductions at the end of each participation period at a purchase price equal to 85% of the lower of the fair market value of the common stock at the beginning or the end of the participation period. The Company issued - 0 - shares from the ESPP in 2017 and 2016 , respectively. The ESPP is no longer active. Stock Warrants : There were no stock warrants as of December 31, 2017 and December 31, 2016 . |
Earnings (loss) per Share
Earnings (loss) per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per Share | Earnings (loss) per Share Basic earnings (loss) per share (EPS) were computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted EPS differs from basic EPS due to the assumed conversion of potentially dilutive options that were outstanding during the period. The following is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for net income (loss). 2017 2016 Numerator: Numerator for basic and diluted earnings per share, net (loss) available to common shareholders $ (3,008,785 ) $ (1,196,642 ) Denominator: Denominator for basic earnings per share, weighted average shares outstanding 8,995,883 7,838,197 Effect of dilutive securities-stock options and restricted awards — — Denominator for diluted earnings per share, adjusted weighted average shares and assumed conversion 8,995,883 7,838,197 Basic (loss) per common share $ (0.33 ) $ (0.15 ) Diluted (loss) per common share and common share equivalent $ (0.33 ) $ (0.15 ) The awards and options to purchase shares of common stock that were outstanding at December 31, 2017 and 2016 that were not included in the computation of diluted earnings (loss) per share because the effect would have been anti-dilutive, are as follows: Year Ended December 31, 2017 2016 Anti-dilutive awards and options 3,595,939 3,361,276 |
Concentration of Credit Risk an
Concentration of Credit Risk and Significant Customers | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers The Company has no significant off-balance sheet or concentrations of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. The Company currently maintains the majority of its cash and cash equivalent balance with one financial institution. |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings Under a loan and security agreement dated February 2, 2016, our wholly-owned subsidiary FiCentive, Inc. loaned a principal amount of $150,000 to C2Go, Inc. with an interest rate of 10% per annum for a term of 18 months. The loan was secured by a first lien on all assets of C2Go. C2Go defaulted under the note by failing to repay the loan plus interest on August 2, 2017. A lawsuit filed by FiCentive is pending in Bexar County, San Antonio, Texas. On December 7, 2017, the Company entered into a note purchase and settlement agreement with C2Go and Mercury Investment Partners LLC. Pursuant to the note purchase and settlement agreement Mercury Investment Partners agreed to purchase the note and the rights secured by the security agreement with all rights and obligations and pay to FiCentive a sum of $200,000 in three installments. The first installment of $50,000 was paid on December 7, 2017. The second installment of $50,000 is due on April 30, 2018, and the remaining amount of $100,000 is due on October 31, 2018. In return, FiCentive agreed to waive all interest due and payable under the terms of the C2Go loan. There are no assurances that the Company will be able to recover the remaining $150,000 principal and that there are no assurances there will be any assets for the Company to recover from our lien on all the assets of C2Go, Inc. if payment in full of the obligation is not made. Aside from the lawsuit described above, the Company may be involved in legal matters arising in the ordinary course of business from time to time. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is or could become involved in litigation will not have a material adverse effect on our business, financial condition or results of operations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 9, 2018, the Board of Directors amended the Stock Buyback Plan adding an additional $2 million dollars to the plan to be available for stock buybacks. After the amendment, the total plan amount available is now $3 million . With the incremental plan funds available, the net funds available after the authorized incremental funds is $2,455,030 . On January 8, 2018 and January 9, 2018, the Company repurchased 397,845 shares in a private transaction at the closing price on January 8, 2018 and January 9, 2018 from officers, employees and director's to cover the respective employees', officers' and directors' share of taxes for shares that vested on that day, as approved by the Audit Committee and the Board of Directors on the same day, with the respective officers and directors recusing themselves. The value of the treasury shares purchased to cover the taxes was $956,128 . The share buyback included share purchases for Michael Long, Chairman of the Board, Louis Hoch, President and Chief Executive Officer and Tom Jewell, Chief Financial Officer as approved by the Audit Committee of the Board of Directors and the Board of Directors as of January 9, 2018. In mid-January 2018, Pueblo Bank and Trust, terminated their relationship with the Company's gateway provider and as a result the Company stopped processing PINless debit transactions. The Company has secured a relationship with another gateway and bank sponsorship relationship, but has not yet resumed processing of PINless debit transactions. In anticipation of the existing principal executive office lease expiration on April 30, 2018, the Company entered into a new lease in San Antonio, TX commencing on or about May 1, 2018. The operating lease is for a period of 76 months and expires on or about July 31, 2024. The space leased ranges from 6,000 square feet to 10,535 square feet. Annual rents during the lease term will range from $117,000 to $232,000 . In order to consolidate the Singular Payments' sales offices and operations, the company entered into a lease in Nashville, Tennessee commencing on or about March 1, 2018. The operating lease is for a period of 62 months and expires on April 30, 2023. The space leased is 3,794 square feet. Annual rents during the lease term range from $109,000 to $122,000 . |
Description of Business and S22
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization: Payment Data Systems, Inc., along with its subsidiaries, FiCentive, Inc., a Nevada corporation, and Zbill, Inc., a Nevada corporation, provides integrated electronic payment services, including credit and debit card-based processing services and transaction processing via the Automated Clearing House (“ACH”) network to billers and retailers. In addition, the Company operates an Internet electronic payment processing service for consumers under the domain name www.billx.com and various other product websites, such as akimbocard.com and singularpayments |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation: The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition: Revenue consists primarily of fees generated through the electronic processing of payment transactions and related services, and is recognized as revenue during the period the transactions are processed or when the related services are performed. The Company complies with ASC 605-45-45 and reports revenues gross as a principal versus net as an agent. Although some of the Company’s processing agreements vary with respect to specific credit risks, the Company has determined that for each agreement it is acting in the principal role. Merchants may be charged for these processing services at a bundled rate based on a percentage of the dollar amount of each transaction and, in some instances, additional fees are charged for each transaction. Certain merchant customers are charged a flat fee per transaction, while others may also be charged miscellaneous fees, including fees for chargebacks or returns, monthly minimums, and other miscellaneous services. Revenues derived from electronic processing of credit, debit, and prepaid card transactions that are authorized and captured through third-party networks are reported gross of amounts paid to sponsor banks as well as interchange and assessments paid to credit card associations (Visa, MasterCard, and Discover). Revenue also includes any up-front fees for the work involved in implementing the basic functionality required to provide electronic payment processing services to a customer. Revenue from such implementation fees is recognized over the term of the related service contract. Sales taxes billed are reported directly as a liability to the taxing authority, and are not included in revenue. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash and cash equivalents includes cash and other money market instruments. The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. |
Settlement Processing Assets and Obligations | Settlement Processing Assets and Obligations: Settlement processing assets and obligations represent intermediary balances arising in our settlement process for merchants. |
Restricted Cash | Restricted Cash: Restricted cash includes certain funds collected from our merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under our agreement with the merchant. The funds may be used to offset any returned items or chargebacks to the Company and to indemnify the Company against third-party claims and any expenses that may be created by the customer as a result of any claim or fine. The Company may require the customer to provide a security deposit based on estimated transaction volumes, amounts and chargebacks and may revise the deposit based on periodic review of the same items. Repayment of the deposit to the customer is generally within 90 to 180 days beyond the date the last item is processed by the Company on behalf of the customer. The customer security deposit does not accrue interest to the benefit of the customer. |
Accounts Receivable/Allowance for Estimated Losses | Accounts Receivable/Allowance for Estimated Losses: Accounts Receivable are reported as outstanding principal net of an allowance for doubtful accounts of $61,223 and $26,556 at December 31, 2017 and 2016 , respectively. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability or failure of its customers to make required payments. The Company determines the allowance based on an account-by-account review, taking into consideration such factors as the age of the outstanding balance, historical pattern of collections and financial condition of the customer. Past losses incurred by the Company due to bad debts have been within its expectations. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make contractual payments, additional allowances might be required. Estimates for bad debt losses are variable based on the volume of transactions processed and could increase or decrease accordingly. The Company normally does not charge interest on accounts receivable. |
Property and Equipment | Property and Equipment: Property and equipment are stated at cost. Depreciation and amortization are computed on a straight-line method over the estimated useful lives of the related assets, ranging from three to ten years. Leasehold improvements are amortized over the lesser of the estimated useful lives or remaining lease period. Expenditures for maintenance and repairs are charged to expense as incurred. |
Accounting for Internal Use Software | Accounting for Internal Use Software: The Company capitalizes the costs associated with software developed or obtained for internal use when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed-in service. Capitalized costs include only (i) external direct costs of materials and services consumed in developing or obtaining internal-use software, (ii) payroll and other related costs for employees who are directly associated with and who devote time to the internal-use software project, and (iii) interest costs incurred, when material, while developing internal-use software. The Company ceases capitalization of such costs no later than the point at which the project is substantially complete and ready for its intended purpose |
Concentration of Credit Risk | Concentration of Credit Risk: Financial instruments that potentially expose the Company to credit risk consist of cash and cash equivalents, and accounts receivable. The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC ( $250,000 ). Accounts receivables potentially subject the Company to concentrations of credit risk. The Company’s customer base operates in a variety of industries and is geographically dispersed although the relatively small number of customers increases the risk. The Company closely monitors extensions of credit. Estimated credit losses have been recorded in the consolidated financial statements. Recent credit losses have been within management's expectations. No customer accounted for more than 10% of revenues in 2017 or 2016 . |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: Cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term borrowings are reflected in the accompanying consolidated financial statements at cost, which approximates fair value because of the short-term maturity of these instruments. |
Impairment of Long-Lived Assets and Intangible Assets | Impairment of Long-Lived Assets and Intangible Assets: The Company reviews periodically, on at least an annual basis, the carrying value of its long-lived assets and intangible assets and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. To the extent the fair value of a long-lived asset, determined based upon the estimated future cash inflows attributable to the asset, less estimated future cash outflows, is less than the carrying amount, an impairment loss is recognized. |
Reserve for Processing Losses | Reserve for Processing Losses: If, due to insolvency or bankruptcy of one of the Company’s merchant customers, or for any other reason, the Company is not able to collect amounts from its card processing, credit card, ACH or merchant prepaid customers that have been properly "charged back" by the customer or if a prepaid cardholder incurs a negative balance, the Company must bear the credit risk for the full amount of the transaction. The Company may require cash deposits and other types of collateral from certain merchants to minimize any such risk. In addition, the Company utilizes a number of systems and procedures to manage merchant risk. ACH, prepaid and credit card merchant processing loss reserves are primarily determined by performing a historical analysis of our loss experience and considering other factors that could affect that experience in the future, such as the types of transactions processed and nature of the merchant relationship with its consumers and the Company with its prepaid card holders. This reserve amount is subject to the risk that actual losses may be greater than our estimates. The Company has not incurred any significant processing losses to date. Estimates for processing losses vary based on the volume of transactions processed and could increase or decrease accordingly. The Company evaluates its risk for such transactions and estimates its potential processing losses based primarily on historical experience and other relevant factors. |
Advertising costs | Advertising Costs: Advertising is expensed as incurred. |
Income Taxes | Income Taxes: Deferred tax assets and liabilities are recorded based on difference between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Deferred tax assets are computed with the presumption that they will be realizable in future periods when taxable income is generated. Predicting the ability to realize these assets in future periods requires a great deal of judgment by management. U.S. generally accepted accounting principles prescribe a recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Income tax benefits that meet the “more likely than not” recognition threshold should be recognized. Goodwill is amortized over 15 years for tax purposes. As with all businesses, the Company’s tax returns are subject to periodic examination. The Company’s federal returns for the past four years remain open to examination. The Company is subject to the Texas margin tax. Management is not aware of any tax positions that would have a significant impact on its financial position. The Company has approximately $41.3 million of net operating loss carryforwards. However, the Company cannot predict with reasonable certainty that all of the available net operating loss carryforwards will be realized in future periods. Accordingly, a valuation allowance has been provided to reduce the net deferred tax assets to $1.4 million . Management does not anticipate a significant change in the 6 months after the assessment and will review the deferred tax asset balance at June 30, 2018, or earlier as events may warrant. |
Stock-Based Compensation | Stock-Based Compensation: The Company recognizes as compensation expense all share-based payment awards made to employees and directors, including grants of stock options and warrants, based on estimated fair values. Fair value is generally determined based on the closing price of the Company’s common stock on the date of grant. |
401(k) Plan | 401(k) Plan: The Company has a defined contribution plan (the “401(k) Plan”) pursuant to Section 401(k) of the Internal Revenue Code. All eligible full and part-time employees of the Company who meet certain age requirements may participate in the 401(k) Plan. Participants may contribute between 1% and 15% of their pre-tax compensation, but not in excess of the maximum allowable under the Code. The 401(k) Plan allows for discretionary and matching contributions by the Company. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share: Basic and diluted earnings (loss) per common share are calculated by dividing earnings by the weighted average number of common shares outstanding during the period. |
New Accounting Pronouncement | New Accounting Pronouncement: In May 2014, the Financial Accounting Standards Board (FASB) issued accounting standards update, ASU 2014-9, “Revenue from Contracts with Customers (Topic 606) and a subsequent amendment to the standard in March 2016, ASU 2016-8 “Revenue from Contracts with Customers, Principal versus Agent Consideration (Reporting Revenue Gross versus Net) . The original standard provides guidance on recognizing revenue, including a five step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires additional disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard, as amended, is effective for for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The amendment allows companies to use either a full retrospective or a modified retrospective approach to adopt this ASU. The Company has evaluated the potential impact that the adoption of this standard will have on its financial position, results of operations, and related disclosures, and will adopt the provisions of this new standard in the first quarter of 2018. The Company functions as the merchant of record and has primary responsibility for providing end-to-end payment processing services for its clients. The Company's clients contract with the Company for all credit card processing services including transaction authorization, settlement, dispute resolution, security and risk management solutions, reporting and other value-added services. As such, the Company is the primary obligor in these transactions and is solely responsible for all processing costs, including interchange fees. Further, the Company sets prices as it deems reasonable for each merchant. The gross fees the Company collects are intended to cover the interchange, assessments and other processing fees and include the Company's margin on transactions processed. For these reasons, the Company is the principal obligor in the contractual relationship with its customers and therefor, the Company records its revenues, including interchange and assessments on a gross basis. The Company's existing revenue recognition process will remain intact and we will continue to record revenues at the gross amount billed due to its primary responsibility for providing end-to-end payment processing services for its clients. In February 2016, the FASB issued, “Leases (Topic 842),” which is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee will be required to recognize on the balance sheet an asset (right to use) and a liability (lease obligation) for leases with terms of more than 12 months. Accounting by lessors will remain largely unchanged from current U.S. generally accepted accounting principles. The new standard is effective for public companies for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Management does not expect that adopting this standard will have a significant impact on its financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230):Restricted Cash . The update requires that companies should include cash and cash equivalents with restrictions in total cash and cash equivalents on the statement of cash flows. If restricted cash is presented separately from cash and cash equivalents on the balance sheet, a reconciliation between the statement of financial position and the statement of cash flow must be disclosed. The update requires retrospective application to all periods presented. The effective date of this update is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company has evaluated this updated requirement and will adopt this policy in 2018. |
Acquisition of Singular Payme23
Acquisition of Singular Payments, LLC. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of acquisition purchase price | The purchase price was allocated to the net assets acquired based upon their estimated fair values as follows: Estimated Fair Estimated Useful Value Life Customer list $ 5,000,000 5 Years Total $ 5,000,000 |
Schedule of supplemental unaudited pro forma information | The Company estimates that the revenues and net income for the periods below that would have been reported if the Singular acquisition would have taken place on the first day of the Company's 2016 calendar year would be as follows: 2017 2016 Revenues $ 22,079,244 $ 23,000,000 Gross Profit 4,521,507 5,146,325 Net (Loss) (3,804,700 ) (2,568,074 ) Income per share: Basic $ (0.37 ) $ (0.27 ) Diluted $ (0.37 ) $ (0.27 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consisted of the following at December 31: 2017 2016 Software $ 4,060,964 $ 3,692,474 Equipment 813,000 812,049 Furniture and fixtures 217,345 214,450 Leasehold improvements 25,353 25,353 Total property and equipment 5,116,662 4,744,326 Less: accumulated depreciation (3,011,476 ) (2,249,816 ) Net property and equipment $ 2,105,186 $ 2,494,510 |
Valuation Accounts (Tables)
Valuation Accounts (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Summary of Valuation Allowance | Valuation and allowance accounts included the following at December 31: Balance Beginning of Year Net Charged to Costs and Expenses Transfers Net Write-Off Balance End of Year 2017 Allowance for doubtful accounts $ 26,556 $ 71,667 $ — $ (37,000 ) $ 61,223 Reserve for processing losses $ 172,832 — — $ 172,832 2016 Allowance for doubtful accounts $ 35,033 $ — $ — $ (8,477 ) $ 26,556 Reserve for processing losses $ 248,868 — — $ (76,036 ) $ 172,832 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consisted of the following balances at December 31: 2017 2016 Accrued commissions $ 331,214 $ 221,837 Reserve for merchant losses 172,832 172,832 Other accrued expenses 387,882 192,769 Accrued taxes 45,129 38,469 Accrued salaries 69,205 77,415 Total accrued expenses $ 1,006,262 $ 703,322 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The future operating lease payments as December 31, 2017 are as follows: Year ended December 31, 2018 $ 125,400 2019 72,000 2020 28,000 2021 1,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31: 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 8,665,000 $ 13,676,000 Depreciation and amortization 322,000 313,000 Non-cash compensation 627,000 279,000 Other 23,000 23,000 Valuation Allowance (8,243,000 ) (12,670,000 ) Deferred tax asset $ 1,394,000 $ 1,621,000 |
Schedule of Components of Income Tax Expense | The tax provision for federal and state income tax is as follows for the year ended December 31: 2017 2016 Current provision: Federal $ — $ — State 47,316 32,668 47,316 32,668 Deferred provision: Federal expense 227,000 — Expense for income taxes $ 274,316 $ 32,668 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of federal income tax computed at the U.S. federal statutory tax rates to total income tax expense (benefit) is as follows for the year ended December 31: 2017 2016 Income tax expense (benefit) at 34% $ (1,023,000 ) $ (407,000 ) Change in valuation allowance 4,427,000 331,000 Permanent and other differences (2,557,000 ) 76,000 Deferred tax impact of enacted tax rate and law changes (620,000 ) — Alternative minimum tax and Texas margin tax 47,316 32,668 Income tax expense (benefit) $ 274,316 $ 32,668 |
Stock Options, Incentive Plan29
Stock Options, Incentive Plans, Stock Awards, and Employee Benefit Plan (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation Activity | A summary of stock awards outstanding and 2017 activities are as follows: Stock Awards Shares Weighted Average Exercise Price Weighted Average Contractual Remaining Life Aggregate Intrinsic Value Outstanding, December 31, 2016 3,361,276 $ 1.85 Granted 1,695,334 2.23 Vested 36,674 — Forfeited — — Outstanding, December 31, 2017 5,019,936 $ 1.98 8.51 $ 2,773,236 Expected to Vest after December 31, 2017 5,019,936 $ 1.98 8.51 $ 2,773,236 |
Earnings (loss) per Share (Tabl
Earnings (loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for net income (loss). 2017 2016 Numerator: Numerator for basic and diluted earnings per share, net (loss) available to common shareholders $ (3,008,785 ) $ (1,196,642 ) Denominator: Denominator for basic earnings per share, weighted average shares outstanding 8,995,883 7,838,197 Effect of dilutive securities-stock options and restricted awards — — Denominator for diluted earnings per share, adjusted weighted average shares and assumed conversion 8,995,883 7,838,197 Basic (loss) per common share $ (0.33 ) $ (0.15 ) Diluted (loss) per common share and common share equivalent $ (0.33 ) $ (0.15 ) |
Schedule of Antidilutive Securities | The awards and options to purchase shares of common stock that were outstanding at December 31, 2017 and 2016 that were not included in the computation of diluted earnings (loss) per share because the effect would have been anti-dilutive, are as follows: Year Ended December 31, 2017 2016 Anti-dilutive awards and options 3,595,939 3,361,276 |
Description of Business and S31
Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Allowance for doubtful accounts | $ 61,223 | $ 26,556 |
Capitalized computer software | 267,869 | 136,537 |
FDIC insured amount | 250,000 | |
Reserve for merchant losses | 172,832 | 172,832 |
Advertising costs | 100,000 | 46,000 |
Net operating loss carryforwards | 41,300,000 | |
Deferred tax asset | 1,394,000 | 1,621,000 |
Employer discretionary contribution amount | $ 65,478 | $ 52,905 |
First 3% Matched | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Employer matching contribution, percent of match | 100.00% | |
Employer matching contribution, percent of employees' gross pay | 3.00% | |
Over 3% Matched | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Employer matching contribution, percent of match | 50.00% | |
Employer matching contribution, percent of employees' gross pay | 3.00% | |
Maximum Matched | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Employer matching contribution, percent of employees' gross pay | 5.00% | |
Akimbo | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Goodwill amortization period | 15 years | |
Minimum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Estimated useful life of property and equipment | 3 years | |
Contribution percentage per employee | 1.00% | |
Maximum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Estimated useful life of property and equipment | 10 years | |
Contribution percentage per employee | 15.00% |
Acquisition of Singular Payme32
Acquisition of Singular Payments, LLC. (Details) - USD ($) | Sep. 01, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Cash payments to acquire businesses | $ 900,000 | $ 0 | ||
Outstanding balance of note receivable assumed | $ 600,000 | $ 0 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Singular Payments, LLC | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ 5,000,000 | |||
Cash payments to acquire businesses | 1,500,000 | |||
Outstanding balance of note receivable assumed | 600,000 | |||
Equity interest issued or issuable, value | $ 3,500,000 | |||
Equity interest issued or issuable, number of shares (in shares) | 1,515,152 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Share price (in dollars per share) | $ 2.31 | |||
Equity interest issued, lock-up agreement, term | 24 months | |||
Equity interest issued, basis for determining value, number of business days preceding September 1, 2017 | 5 days | |||
Revenues | $ 3,700,000 | |||
Operating loss | $ 600,000 |
Acquisition of Singular Payme33
Acquisition of Singular Payments, LLC. - Purchase Price (Details) - Singular Payments, LLC - USD ($) | Sep. 01, 2017 | Sep. 30, 2017 |
Business Acquisition [Line Items] | ||
Estimated Fair Value | $ 5,000,000 | |
Customer List | ||
Business Acquisition [Line Items] | ||
Estimated Fair Value | $ 5,000,000 | |
Estimated Useful Life | 5 years | 60 months |
Acquisition of Singular Payme34
Acquisition of Singular Payments, LLC. - Unaudited Pro Forma Information (Details) - Singular Payments, LLC - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Revenues | $ 22,079,244 | $ 23,000,000 |
Gross Profit | 4,521,507 | 5,146,325 |
Net (Loss) | $ (3,804,700) | $ (2,568,074) |
Income per share, Basic (in dollars per share) | $ (0.37) | $ (0.27) |
Income per share, Diluted (in dollars per share) | $ (0.37) | $ (0.27) |
Note Receivable (Details)
Note Receivable (Details) - USD ($) | Dec. 07, 2017 | Feb. 02, 2016 | Oct. 31, 2018 | Apr. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Aug. 02, 2017 | Mar. 07, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Note receivable | $ 150,000 | $ 200,000 | |||||||
Pending Litigation | FiCentive, Inc. V. C2Go, Inc. | Defaults Of Mutual Loan And Security Agreement | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Litigation settlement, amount awarded from other party | $ 200,000 | ||||||||
Payment received upon signing agreement | 50,000 | ||||||||
Remaining principal obligation owed from other party | 150,000 | $ 150,000 | |||||||
Pending Litigation | FiCentive, Inc. V. C2Go, Inc. | Defaults Of Mutual Loan And Security Agreement | Forecast | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Remaining principal obligation owed from other party | $ 100,000 | $ 50,000 | |||||||
C2Go Loan | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Note receivable | $ 200,000 | $ 150,000 | |||||||
Stated interest rate | 10.00% | ||||||||
Notes receivable term | 18 months | ||||||||
Repayment shares of payee issued to company, percent | 5.00% | ||||||||
Interest rate in event of default | 18.00% | ||||||||
Notes receivable, write-off of accrued interest | $ 31,667 | ||||||||
Financing receivable, allowance for credit losses | $ 0 | ||||||||
Singular Payments, LLC | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Note receivable | $ 600,000 | $ 500,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 5,116,662 | $ 4,744,326 |
Less: accumulated depreciation | (3,011,476) | (2,249,816) |
Net property and equipment | 2,105,186 | 2,494,510 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 4,060,964 | 3,692,474 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 813,000 | 812,049 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 217,345 | 214,450 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 25,353 | $ 25,353 |
Intangibles (Details)
Intangibles (Details) - USD ($) | Sep. 01, 2017 | Sep. 30, 2017 | Jan. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2015 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Amortization | $ 496,472 | $ 163,139 | |||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract] | |||||||
2,020 | 1,000,000 | ||||||
2,021 | 1,000,000 | ||||||
2,022 | 1,000,000 | ||||||
Akimbo | Customer List and Contracts | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Acquired intangible assets | $ 396,824 | ||||||
Finite-lived intangible assets, accumulated amortization | 396,824 | ||||||
Goodwill | $ 9,759 | ||||||
Finite-lived intangible asset, useful life used for net present value | 36 months | ||||||
Finite-lived intangible asset, useful life | 3 years | ||||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
2,015 | $ 163,139 | ||||||
2,016 | 163,139 | ||||||
2,017 | $ 163,139 | ||||||
Singular Payments, LLC | Customer List | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Acquired intangible assets | $ 5,000,000 | ||||||
Finite-lived intangible assets, accumulated amortization | $ 333,333 | ||||||
Finite-lived intangible asset, useful life | 5 years | 60 months | |||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Amortization | 333,333 | ||||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract] | |||||||
2,018 | 1,000,000 | ||||||
2,019 | $ 1,000,000 |
Valuation Accounts (Details)
Valuation Accounts (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance Beginning of Year | $ 172,832 | |
Balance End of Year | 172,832 | $ 172,832 |
Allowance for Doubtful Accounts | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance Beginning of Year | 26,556 | 35,033 |
Net Charged to Costs and Expenses | 71,667 | 0 |
Transfers | 0 | 0 |
Net Write-Off | (37,000) | (8,477) |
Balance End of Year | 61,223 | 26,556 |
Legal Reserve | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance Beginning of Year | 172,832 | 248,868 |
Net Charged to Costs and Expenses | 0 | |
Transfers | 0 | 0 |
Net Write-Off | 0 | (76,036) |
Balance End of Year | $ 172,832 | $ 172,832 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued commissions | $ 331,214 | $ 221,837 |
Reserve for merchant losses | 172,832 | 172,832 |
Other accrued expenses | 387,882 | 192,769 |
Accrued taxes | 45,129 | 38,469 |
Accrued salaries | 69,205 | 77,415 |
Total accrued expenses | $ 1,006,262 | $ 703,322 |
Operating Leases (Details)
Operating Leases (Details) | 1 Months Ended | 12 Months Ended | |
May 31, 2017 | Dec. 31, 2017USD ($)ft² | Dec. 31, 2016USD ($) | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,018 | $ 125,400 | ||
2,019 | 72,000 | ||
2,020 | 28,000 | ||
2,021 | $ 1,000 | ||
Office Space, Executive Offices and Operations | |||
Operating Leased Assets [Line Items] | |||
Operating leases, area leased (in square feet) | ft² | 7,200 | ||
Rent expense | $ 197,300 | $ 158,000 | |
Sales Offices And Operations Consolidation | Singular Payments, LLC | Nashville, TN And St. Augustine, FL | |||
Operating Leased Assets [Line Items] | |||
Rent expense | 25,236 | ||
Lease of Select Computer Equipment | |||
Operating Leased Assets [Line Items] | |||
Rent expense | $ 72,000 | $ 45,500 | |
Operating leases, term of contract | 36 months |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||
Treasury stock repurchased | $ 112,910 | $ 431,755 |
Angry Pug Sportswear | ||
Related Party Transaction [Line Items] | ||
Purchases from related party | $ 1,826 | 2,250 |
Louis A. Hoch | Ownership Of Angry Pug Sportswear | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 50.00% | |
Club Rio Maroc Bar, Lush Rooftop, and Nirvana Bar and Rock | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 29,555 | $ 51,500 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 8,665,000 | $ 13,676,000 |
Depreciation and amortization | 322,000 | 313,000 |
Non-cash compensation | 627,000 | 279,000 |
Other | 23,000 | 23,000 |
Valuation Allowance | (8,243,000) | (12,670,000) |
Deferred tax asset | $ 1,394,000 | $ 1,621,000 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Dec. 31, 2017USD ($) |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 41.3 |
Portion Subject to an IRS Section 382 Limitation | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 0.1 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Current provision: | ||
Federal | $ 0 | $ 0 |
State | 47,316 | 32,668 |
Current income tax provision | 47,316 | 32,668 |
Deferred provision: | ||
Federal expense | 227,000 | 0 |
Expense for income taxes | $ 274,316 | $ 32,668 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax rate | 34.00% | 34.00% |
Income tax expense (benefit) at 34% | $ (1,023,000) | $ (407,000) |
Change in valuation allowance | 4,427,000 | 331,000 |
Permanent and other differences | (2,557,000) | 76,000 |
Deferred tax impact of enacted tax rate and law changes | (620,000) | 0 |
Alternative minimum tax and Texas margin tax | 47,316 | 32,668 |
Expense for income taxes | $ 274,316 | $ 32,668 |
Stock Options, Incentive Plan46
Stock Options, Incentive Plans, Stock Awards, and Employee Benefit Plan (Details) - USD ($) | May 01, 2020 | May 01, 2019 | May 01, 2018 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Treasury stock repurchased | $ 112,910 | $ 431,755 | ||||
Stock-based compensation expense | 968,141 | $ 968,141 | ||||
Unrecognized compensation costs | $ 7,012,544 | |||||
Weighted average remaining contractual life | 8 years 6 months 4 days | |||||
Share price (in dollars per share) | $ 2.53 | |||||
Stock warrants outstanding (in shares) | 0 | |||||
Wedbush | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Treasury stock repurchased (in shares) | 19,379 | |||||
Treasury stock repurchased | $ 23,760 | |||||
Directors And Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Treasury stock repurchased (in shares) | 56,973 | |||||
Treasury stock repurchased | $ 89,250 | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted (in shares) | 1,695,334 | |||||
Award vesting period | 10 years | |||||
Restricted stock units vested in period (in shares) | 36,674 | |||||
Restricted Stock | Directors And Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted (in shares) | 1,395,334 | |||||
Restricted Stock | Executive Officer | Louis A. Hoch | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted (in shares) | 300,000 | |||||
Restricted Stock | Executive Officer | Tom Jewell | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted (in shares) | 150,000 | |||||
Equity Incentive Plan 2025 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized (in shares) | 5,000,000 | |||||
Percentage increase in capital shares reserved for future issuance per year | 5.00% | |||||
Equity Incentive Plan 2025 | Director 1 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted (in shares) | 66,667 | |||||
Equity Incentive Plan 2025 | Director 1 | Forecast | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units vested in period (in shares) | 22,222 | 22,223 | ||||
Equity Incentive Plan 2025 | Director 1 | Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units vested in period (in shares) | 22,222 | |||||
Equity Incentive Plan 2025 | Restricted Stock | Directors And Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted (in shares) | 1,695,334 | |||||
Equity Incentive Plan 2025 | Restricted Stock | Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted (in shares) | 66,667 | |||||
Equity Incentive Plan 2025 | Restricted Stock | Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted (in shares) | 105,000 | |||||
Employment Agreement | Restricted Stock | Vaden Landers | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted (in shares) | 300,000 | |||||
Award vesting period | 10 years | |||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Purchase price of common stock, percent | 85.00% | |||||
Stock issued related to employee stock purchase plan (in shares) | 0 |
Stock Options, Incentive Plan47
Stock Options, Incentive Plans, Stock Awards, and Employee Benefit Plan - Schedule of Share-based Compensation Activity (Details) - Restricted Stock | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Shares | |
Outstanding, December 31, 2016 (in shares) | shares | 3,361,276 |
Granted (in shares) | shares | 1,695,334 |
Vested (in shares) | shares | 36,674 |
Forfeited (in shares) | shares | 0 |
Outstanding, December 31, 2017 (in shares) | shares | 5,019,936 |
Expected to Vest after December 31, 2017 (in shares) | shares | 5,019,936 |
Weighted Average Exercise Price | |
Outstanding, December 31, 2016 (in dollars per share) | $ / shares | $ 1.85 |
Granted (in dollars per share) | $ / shares | 2.23 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding, December 31, 2017 (in dollars per share) | $ / shares | 1.98 |
Expected to Vest after December 31, 2017 (in dollars per share) | $ / shares | $ 1.98 |
Weighted Average Contractual Remaining Life | |
Weighted average contractual remaining life, outstanding | 8 years 5 months 34 days |
Weighted average contractual remaining life, expected to vest after year end | 8 years 5 months 34 days |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, outstanding | $ | $ 2,773,236 |
Aggregate intrinsic value, expected to vest after year end | $ | $ 2,773,236 |
Earnings (loss) per Share - Sch
Earnings (loss) per Share - Schedule of Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | ||
Numerator for basic and diluted earnings per share, net (loss) available to common shareholders | $ (3,008,785) | $ (1,196,642) |
Denominator: | ||
Denominator for basic earnings per share, weighted average shares outstanding | 8,995,883 | 7,838,197 |
Effect of dilutive securities-stock options and restricted awards (in shares) | 0 | 0 |
Denominator for diluted earnings per share, adjusted weighted average shares and assumed conversion | 8,995,883 | 7,838,197 |
Basic (loss) per common share (in dollars per share) | $ (0.33) | $ (0.15) |
Diluted (loss) per common share and common share equivalent (in dollars per share) | $ (0.33) | $ (0.15) |
Earnings (loss) per Share - S49
Earnings (loss) per Share - Schedule of Antidilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive awards and options (in shares) | 3,595,939 | 3,361,276 |
Legal Proceedings (Details)
Legal Proceedings (Details) | Dec. 07, 2017USD ($)installment | Feb. 02, 2016USD ($) | Oct. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Loss Contingencies [Line Items] | ||||||
Note receivable | $ 150,000 | $ 200,000 | ||||
Pending Litigation | Defaults Of Mutual Loan And Security Agreement | FiCentive, Inc. V. C2Go, Inc. | ||||||
Loss Contingencies [Line Items] | ||||||
Litigation settlement, amount awarded from other party | $ 200,000 | |||||
Litigation settlement, number of installments | installment | 3 | |||||
Payment received upon signing agreement | $ 50,000 | |||||
Remaining principal obligation owed from other party | 150,000 | $ 150,000 | ||||
Pending Litigation | Defaults Of Mutual Loan And Security Agreement | FiCentive, Inc. V. C2Go, Inc. | Forecast | ||||||
Loss Contingencies [Line Items] | ||||||
Remaining principal obligation owed from other party | $ 100,000 | $ 50,000 | ||||
C2Go Loan | ||||||
Loss Contingencies [Line Items] | ||||||
Note receivable | $ 200,000 | $ 150,000 | ||||
Stated interest rate | 10.00% | |||||
Notes receivable term | 18 months |
Subsequent Events (Details)
Subsequent Events (Details) | May 01, 2018USD ($)ft² | Mar. 01, 2018USD ($)ft² | Jan. 09, 2018USD ($)shares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Subsequent Event [Line Items] | |||||
Treasury stock repurchased | $ 112,910 | $ 431,755 | |||
Subsequent Event | Principle Executive Office Lease | San Antonio, TX | Forecast | |||||
Subsequent Event [Line Items] | |||||
Lessee, operating lease, term of contract | 76 months | ||||
Subsequent Event | Principle Executive Office Lease | San Antonio, TX | Forecast | Minimum | |||||
Subsequent Event [Line Items] | |||||
Area of leased property | ft² | 6,000 | ||||
Operating leases, annual rent expense | $ 117,000 | ||||
Subsequent Event | Principle Executive Office Lease | San Antonio, TX | Forecast | Maximum | |||||
Subsequent Event [Line Items] | |||||
Area of leased property | ft² | 10,535 | ||||
Operating leases, annual rent expense | $ 232,000 | ||||
Subsequent Event | Sales Offices And Operations Consolidation | Nashville, TN | Forecast | |||||
Subsequent Event [Line Items] | |||||
Lessee, operating lease, term of contract | 62 months | ||||
Area of leased property | ft² | 3,794 | ||||
Subsequent Event | Sales Offices And Operations Consolidation | Nashville, TN | Forecast | Minimum | |||||
Subsequent Event [Line Items] | |||||
Operating leases, annual rent expense | $ 109,000 | ||||
Subsequent Event | Sales Offices And Operations Consolidation | Nashville, TN | Forecast | Maximum | |||||
Subsequent Event [Line Items] | |||||
Operating leases, annual rent expense | $ 122,000 | ||||
Subsequent Event | Officers, Employees And Directors | |||||
Subsequent Event [Line Items] | |||||
Treasury stock repurchased (in shares) | shares | 397,845 | ||||
Treasury stock repurchased | $ 956,128 | ||||
Subsequent Event | Share Buyback Plan | |||||
Subsequent Event [Line Items] | |||||
Additional authorized amount | 2,000,000 | ||||
Authorized amount | 3,000,000 | ||||
Remaining authorized repurchase amount | $ 2,455,030 |