Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 03, 2016 | |
Document Information [Line Items] | ||
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) | 12,075,806 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 4,378,405 | $ 4,059,606 |
Accounts receivable, net | 1,070,236 | 1,135,384 |
Settlement processing assets | 25,071,987 | 39,797,232 |
Prepaid expenses and other | 217,416 | 149,118 |
Current assets before restricted cash | 30,738,044 | 45,141,340 |
Restricted cash | 18,316,160 | 17,972,065 |
Total current assets | 49,054,204 | 63,113,405 |
Property and equipment, net | 2,847,699 | 3,077,421 |
Other assets: | ||
Intangibles, net | 260,247 | 341,816 |
Deferred tax asset | 1,621,000 | 1,621,000 |
Note receivable | 200,000 | |
Other assets | 202,298 | 202,849 |
Total other assets | 2,283,545 | 2,165,665 |
Total assets | 54,185,448 | 68,356,491 |
Current liabilities: | ||
Accounts payable | 203,629 | 143,180 |
Accrued expenses | 1,226,964 | 1,328,738 |
Deferred revenues | 33,000 | |
Settlement processing obligations | 25,071,987 | 39,797,232 |
Current liabilities before restricted cash | 26,535,580 | 41,269,150 |
Restricted cash | 18,316,160 | 17,972,065 |
Total current liabilities | 44,851,740 | 59,241,215 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized; -0- shares outstanding at June 30, 2016 (unaudited) and December 31, 2015 | 0 | 0 |
Common stock, $0.001 par value, 200,000,000 shares authorized; 12,419,816 and 12,379,537 issued, and 12,070,184 and 12,029,905 outstanding at June 30, 2016 (unaudited) and December 31, 2015, respectively | 185,580 | 185,533 |
Additional paid-in capital | 64,449,901 | 64,302,498 |
Treasury stock, at cost; 349,632 and 349,632 shares | (286,393) | (286,394) |
Deferred compensation | (5,573,078) | (6,031,362) |
Accumulated deficit | (49,442,302) | (49,054,999) |
Total stockholders’ equity | 9,333,708 | 9,115,276 |
Total liabilities and stockholders’ equity | $ 54,185,448 | $ 68,356,491 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
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) | 12,419,816 | 12,379,537 |
Common stock, shares oustanding (in shares) | 12,070,184 | 12,029,905 |
Treasury stock, shares (in shares) | 349,632 | 349,632 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues | $ 2,890,060 | $ 3,424,756 | $ 6,118,691 | $ 7,167,216 |
Operating expenses: | ||||
Cost of services | 2,034,439 | 2,426,612 | 4,189,222 | 4,802,006 |
Selling, general and administrative: | ||||
Non-cash stock based compensation | 283,747 | 393,525 | 571,436 | 627,056 |
Cancellation of stock based compensation | (163,936) | |||
Other expenses | 801,540 | 419,838 | 1,409,889 | 937,018 |
Depreciation and amortization | 225,554 | 92,948 | 449,777 | 178,520 |
Total operating expenses | 3,345,280 | 3,332,923 | 6,620,324 | 6,380,664 |
Operating income (loss) | (455,220) | 91,833 | (501,633) | 786,552 |
Other income and (expense): | ||||
Interest income | 24,974 | 19,358 | 46,985 | 38,358 |
Other income (expense) | 98,279 | (32,305) | 97,679 | (32,409) |
Total other income and (expense), net | 123,253 | (12,947) | 144,664 | 5,949 |
Income (loss) before income taxes | (331,967) | 78,886 | (356,969) | 792,501 |
Income taxes | 23,334 | 54,036 | 30,334 | 59,036 |
Net income (loss) | $ (355,301) | $ 24,850 | $ (387,303) | $ 733,465 |
Basic earnings per common share: (in dollars per share) | $ (0.05) | $ 0 | $ (0.05) | $ 0.10 |
Diluted earnings per common share: (in dollars per share) | $ (0.05) | $ 0 | $ (0.05) | $ 0.06 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 7,738,759 | 7,369,329 | 7,729,003 | 7,369,329 |
Diluted (in shares) | 7,738,759 | 12,081,754 | 7,729,003 | 12,102,919 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating activities: | ||
Net income (loss) | $ (387,303) | $ 733,465 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 368,208 | 158,679 |
Amortization | 81,569 | 19,841 |
Non-cash stock based compensation | 571,436 | 627,056 |
Cancellation of stock based compensation | (163,936) | |
Issuance of stock to consultant | 34,300 | |
Changes in current assets and current liabilities: | ||
Accounts receivable | 65,148 | 132,305 |
Prepaid expenses and other | (68,298) | (29,437) |
Other assets | 551 | 27,564 |
Accounts payable and accrued expenses | (41,325) | (161,673) |
Deferred revenue | 33,000 | |
Settlement processing assets, net | ||
Net cash provided by operating activities: | 657,286 | 1,343,864 |
Investing activities: | ||
Purchases of property and equipment | (138,487) | (555,778) |
Note receivable | (200,000) | |
Net cash (used) by investing activities: | (338,487) | (555,778) |
Financing activities: | ||
Net cash (used) by financing activities: | ||
Change in cash and cash equivalents | 318,799 | 788,086 |
Cash and cash equivalents, beginning of period | 4,059,606 | 2,803,455 |
Cash and cash equivalents, end of period | 4,378,405 | 3,591,541 |
Supplemental disclosure of cash flow information: | ||
Interest | ||
Income taxes | $ 62,184 | $ 77,369 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Business Description and Accounting Policies [Text Block] | Note 1. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements of Payment Data Systems, Inc. and its subsidiaries (the “Company”) have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been omitted pursuant to such rules and regulations. In the opinion of management, the accompanying interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company's financial position, results of operations and cash flows for such periods. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on March 30, 2016. Results of operations for interim periods are not necessarily indicative of results that may be expected for any other interim periods or the full fiscal year. Cash and Cash Equivalents Settlement Processing Assets and Obligations Restricted Cash Internal Use Software: Estimates: New Accounting Pronouncement 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. The Company is currently evaluating the effect that adopting this standard will have on our financial statements and related disclosures. Reclassifications |
Note 2 - Accrued Expenses
Note 2 - Accrued Expenses | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | Note 2. Accrued Expenses Accrued expenses consisted of the following balances: June 30, 2016 December 31, 2015 Indemnification liability $ 425,000 $ 450,000 Accrued commissions 264,501 440,232 Reserve for merchant losses 248,868 248,868 Other accrued expenses 152,730 112,414 Accrued taxes 24,862 54,077 Accrued salaries 111,003 23,147 Total accrued expenses $ 1,226,964 $ 1,328,738 |
Note 3 - Net Income Per Share
Note 3 - Net Income Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | Note 3. Net Income Per Share Basic earnings 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 awards and 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 for the three and six months ended June 30, 2016 and 2015. All of the share numbers used are after the 1-for-15 reverse split effected on July 23, 2015 by using the June 30, 2015 share numbers and dividing by 15. Any fractional shares were rounded up. Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Numerator: Numerator for basic and diluted earnings per share, net income available to common shareholders $ (355,301 ) $ 24,850 $ (387,303 ) $ 733,465 Denominator: Denominator for basic earnings per share, weighted average shares outstanding 7,738,759 7,369,329 7,729,003 7,369,329 Effect of dilutive securities - 4,712,425 - 4,733,590 Denominator for diluted earnings per share, adjust weighted average shares and assumed conversion 7,738,759 12,081,754 7,729,003 12,102,919 Basic earnings (loss) per common share $ (0.05 ) $ 0.00 $ (0.05 ) $ 0.10 Diluted earnings (loss) per common share and common share equivalent $ (0.05 ) $ 0.00 $ (0.05 ) $ 0.06 The awards and options to purchase shares of common stock that were outstanding at June 30, 2016 and 2015 that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive, are as follows: Six Months Ended 2016 2015 Anti-dilutive awards and options 4,325,711 - |
Note 4 - Acquisition
Note 4 - Acquisition | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | Note 4. Acquisition On December 22, 2014, the Company acquired the assets of Akimbo to increase market share of prepaid debit card services. The purchase price for the software, customer list, fixed assets and goodwill was $3 million in common stock of the Company. The Akimbo operations are included in the Company’s consolidated financial statements from the date of acquisition. The purchase price for Akimbo was allocated based on the fair values of the assets at the date of acquisition as follows: Software $ 2,585,385 Equipment and other assets 2,252 Customer list and contracts 396,824 Goodwill 15,539 Trade accounts payable (300,000 ) Indemnification liability (450,000 ) Total $ 2,250,000 Goodwill is being amortized over 15 years for tax purposes. |
Note 5 - Income Taxes
Note 5 - Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 5. Income Taxes The Company has recognized a deferred tax asset of $1.6 million and has recorded a valuation allowance of $12.2 million to reduce the other deferred tax assets. The Company reviewed the assessment of the deferred tax asset and valuation allowance for the period ending June 30, 2016 and will reevaluate the assessment on December 31, 2016. |
Note 6 - Related Party Transact
Note 6 - Related Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | Note 6. Related Party Transactions Herb Authier During the six months ended June 30, 2016 and the year ended December 31, 2015, the Company paid Herb Authier a total of $24,231 and $45,750 in cash, respectively, for services related to network engineering and administration that he provided to the Company. Mr. Authier was the father-in-law of Louis Hoch, the Company’s President, Chief Executive Officer and Chief Operating Officer. Louis Hoch During the six months ending June 30, 2016 and the year ended December 31, 2015, the Company purchased a total of $2,250 and $857, respectively, of corporate imprinted sportswear and caps from Angry Pug Sportswear. Louis Hoch, the Company’s President, Chief Executive Officer and Chief Operating Officer, is a co-owner of Angry Pug Sportswear. Miguel Chapa During the six months ending June 30, 2016 and the year ended December 31, 2015, the Company received $24,876 and $20,901, respectively, in revenue from Club Rio Maroc Bar, Lush Rooftop, and Nirvana Bar and Rock. Miguel Chapa, a member of our Board of Directors, is an owner in Club Rio Maroc Bar, Lush Rooftop, and Nirvana Bar and Rock. Louis Hoch, the Company’s President, Chief Executive Officer and Chief Operating Officer, is also a minority owner in Lush Rooftop. |
Note 7 - Employment Agreements
Note 7 - Employment Agreements | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Postemployment Benefits Disclosure [Text Block] | Note 7. Employment Agreements Pursuant to the Company’s respective employment agreements with Michael Long, Chairman, and Louis Hoch, President, Chief Executive Officer, and Chief Operating Officer, as amended, in the event of change in control, termination without cause, or non-renewal of the employment agreement the Company will be liable for separation payments, equaling an amount of (a) 2.95 the respective base salary and bonus payments, plus (b) a pro rata portion of the respective annual bonus based on the number of days elapsed in the year prior, plus (c) 2.0 times the respective base salary for non-competition, and (d) continuing other benefits. The Company will also accelerate vesting of stock incentive awards, which as of June 30, 2016 are approximately $1.3 million each, and although it may not impact our cash position, will negatively affect our financial performance. The Company estimates the cash disbursements over time to be $1.5 to $2.0 million each for the respective agreements with Mr. Long and Mr. Hoch. In the case of termination of the agreement due to death of the executive, the Company will be liable for separation payments, equaling an amount of (a) 2.95 the respective base salary and bonus payments, plus (b) a pro rata portion of the respective annual bonus based on the number of days elapsed in the year prior to death, and (c) continuing other benefits. The Company estimates the cash disbursements over time to be around to be $1.0 million each for the respective agreements with Mr. Long and Mr. Hoch. In the case of termination of the agreement due to disability without death, the Company will be liable for separation payments, equaling an amount of (a) 2.95 the respective base salary and bonus payments, plus (b) a pro rata portion of the respective annual bonus based on the number of days elapsed in the year prior to death, plus (c) continuing other benefits, plus (d) disability benefits constituting salary for 3 years. The Company estimates the cash disbursement over time to be $1.8 to $2.2 million for each for the respective agreements with Mr. Long and Mr. Hoch. The Compensation Committee of the Board of Directors has indicated it is in the process of renegotiating the amendments to the employment agreements with respect to the death and disability separation payments, which, if finalized, would greatly reduce the amounts due in those instances. Both Mr. Long and Mr. Hoch have agreed that the 5th amendment to the employment agreements should have only allowed for deferred compensation in the case of death calculations using only the executive’s salary and nothing for bonus compensation or any other benefits and or deferred compensation in the case of disability the only deferred compensation will be the continuation of only salary payments for thirty-six months to be paid by the company and or any disability insurance carrier. Both Mr. Long and Mr. Hoch have agreed to execute the amendments once the Compensation Committee approves the changes. While there is no guarantee that these amendments will be executed, both management and the Compensation Committee have indicated this is their intent. |
Note 8 - Purchase of Equity Sec
Note 8 - Purchase of Equity Securities | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | Note 8. Purchases of Equity Securities On December 27, 2006, the Company issued 589,488 shares of common stock for compensation purposes subject to a ten year vesting schedule. These shares will vest on December 27, 2016. Assuming the price of the Company’s common stock is $2.00 on the day of vesting, the recipients’ share of taxes will be approximately $400,000 to $500,000, depending on respective individual income tax rates. The Company has no legal obligation to assist recipients with their share of taxes, however, the Company may choose to pay cash bonuses, or repurchase shares from the recipient to assist in paying some or all of the taxes due. If the Company elects to repurchase shares from the recipients, such repurchase would require Board of Director approval and Audit Committee review. |
Note 9 - Reverse Stock Split
Note 9 - Reverse Stock Split | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Reverse Stock Split [Text Block] | Note 9. Reverse Stock Split On July 23, 2015, pursuant to shareholder and board approval, the Company effected a 1-for-15 reverse stock split of the outstanding common stock by filing a certificate of change with the Secretary of State of the State of Nevada and obtaining approval by the Financial Industry Regulatory Authority. The number of the Company’s authorized common shares remained unchanged at 200,000,000 shares, par value $0.001 per share, after the reverse stock split. The number of the Company’s authorized preferred stock remains unchanged at 10,000,000 shares, par value $0.01 per share. As a result of the reverse split, the Company issued 1,117 shares due to rounding of fractional shares because the Company agreed to issue to each shareholder a full share for any fractional shares that resulted from the reverse split. All figures and calculations using a share count assuming the 1-for-15 reverse stock split even if the numbers were for a period prior to the reverse stock split. |
Note 10 - Legal Proceedings
Note 10 - Legal Proceedings | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Legal Matters and Contingencies [Text Block] | Note 10. Legal Proceedings The Company was involved in a lawsuit with a customer that alleged it did not warn or stop the processing of $181,709 in fraudulent credit transactions from occurring. The Company believes that the customer breached the Company’s processing agreement and that a security breach occurred because of the customer’s lack of controls over the login and password information utilized by the customer to process transactions resulting in the customer becoming a victim of a malware attack. The agreement between the customer and the Company has a limitation of liability provision that allows for the maximum liability of the Company to not exceed the amount of fees of a single month of service. On April 29, 2015, Brightmoore Church filed a notice of voluntary dismissal, which the Court accepted on April 30, 2015, and dismissed the lawsuit without prejudice. On November 3, 2015, the Company filed a lawsuit against Brightmoore Church in the District Court for the judicial district of Bexar County, Texas, alleging a breach of contract by Brightmoore Church resulting in the fraudulent credit transactions described before and demanding payment of damages. On March 24, 2016, the Company entered into a settlement agreement with Brightmoore Church and on March 28, 2016, the Company filed to dismiss the lawsuit for no consideration. The case was dismissed by Brightmoore Church on April 4, 2016. On March 1, 2016, the Company was granted a temporary restraining order against Shelby Systems, Inc. by the District Court for the judicial district of Bexar County, Texas to prevent Shelby Systems from, among others, publishing false information about the Company and interfering with the Company’s customers after the termination of the Company’s referral agreement with Shelby Systems. On July 5, 2016, the Company agreed to dismiss the lawsuit with no further fees due Shelby Systems which netted the Company $97,493 in income. On June 26, 2015, Michael McFarland, derivatively on behalf the Company, and individually on behalf of himself and all other similarly situated shareholders of the Company, filed a class-action lawsuit in United States District Court, District of Nevada. The suit alleges breach of fiduciary duties and unjust enrichment by the Company’s Board of Directors and certain executive officers and directors in connection with excessive and unfair compensation paid or awarded during fiscal years 2013 and 2014. The lawsuit seeks disgorgement of excessive compensation as well as damages in an unspecified amount. As of March 17, 2016 the Court signed an order dismissing the claims against Peter Kirby and Michael Long, but did not rule as to the other defendants. On March 22, 2016 the Company filed an unopposed motion for final judgment as to everyone else and confirmed again with the Plaintiff that they do not oppose dismissal of the whole case. On April 5, 2016, the case was dismissed without prejudice. On April 26, 2016, Michael McFarland, derivatively on behalf the Company, re- filed the same class-action lawsuit in United States District Court, District of Nevada. The Company believes the claims are without merit and it is unlikely that a loss will be incurred, therefore the Company has not accrued for a potential loss. However, the outcomes of the disputes are still uncertain and it is possible the Company may incur legal fees and losses in the future. Aside from the lawsuits 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 the Company’s business, financial condition or results of operations. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents |
Deposit Contracts, Policy [Policy Text Block] | Settlement Processing Assets and Obligations |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash |
Internal Use Software, Policy [Policy Text Block] | Internal Use Software: |
Use of Estimates, Policy [Policy Text Block] | Estimates: |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncement 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. The Company is currently evaluating the effect that adopting this standard will have on our financial statements and related disclosures. |
Reclassification, Policy [Policy Text Block] | Reclassifications |
Note 2 - Accrued Expenses (Tabl
Note 2 - Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | June 30, 2016 December 31, 2015 Indemnification liability $ 425,000 $ 450,000 Accrued commissions 264,501 440,232 Reserve for merchant losses 248,868 248,868 Other accrued expenses 152,730 112,414 Accrued taxes 24,862 54,077 Accrued salaries 111,003 23,147 Total accrued expenses $ 1,226,964 $ 1,328,738 |
Note 3 - Net Income Per Share (
Note 3 - Net Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Numerator: Numerator for basic and diluted earnings per share, net income available to common shareholders $ (355,301 ) $ 24,850 $ (387,303 ) $ 733,465 Denominator: Denominator for basic earnings per share, weighted average shares outstanding 7,738,759 7,369,329 7,729,003 7,369,329 Effect of dilutive securities - 4,712,425 - 4,733,590 Denominator for diluted earnings per share, adjust weighted average shares and assumed conversion 7,738,759 12,081,754 7,729,003 12,102,919 Basic earnings (loss) per common share $ (0.05 ) $ 0.00 $ (0.05 ) $ 0.10 Diluted earnings (loss) per common share and common share equivalent $ (0.05 ) $ 0.00 $ (0.05 ) $ 0.06 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Six Months Ended 2016 2015 Anti-dilutive awards and options 4,325,711 - |
Note 4 - Acquisition (Tables)
Note 4 - Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | Software $ 2,585,385 Equipment and other assets 2,252 Customer list and contracts 396,824 Goodwill 15,539 Trade accounts payable (300,000 ) Indemnification liability (450,000 ) Total $ 2,250,000 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation (Details Textual) - Software Development [Member] - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Property and Equipment [Member] | |||
Capitalized Computer Software, Net | $ 447,259 | ||
Capitalized Computer Software, Additions | $ 22,694 | $ 122,848 |
Note 2 - Accrued Expenses (Deta
Note 2 - Accrued Expenses (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Indemnification liability | $ 425,000 | $ 450,000 |
Accrued commissions | 264,501 | 440,232 |
Reserve for merchant losses | 248,868 | 248,868 |
Other accrued expenses | 152,730 | 112,414 |
Accrued taxes | 24,862 | 54,077 |
Accrued salaries | 111,003 | 23,147 |
Total accrued expenses | $ 1,226,964 | $ 1,328,738 |
Note 3 - Net Income Per Share22
Note 3 - Net Income Per Share (Details Textual) | Jul. 23, 2015 |
Reverse Stock Split [Member] | |
Stockholders' Equity Note, Stock Split, Conversion Ratio | 15 |
Note 3 - Earnings per Share Num
Note 3 - Earnings per Share Numerator and Denominator (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Numerator: | ||||
Numerator for basic and diluted earnings per share, net income available to common shareholders | $ (355,301) | $ 24,850 | $ (387,303) | $ 733,465 |
Denominator: | ||||
Denominator for basic earnings per share, weighted average shares outstanding (in shares) | 7,738,759 | 7,369,329 | 7,729,003 | 7,369,329 |
Effect of dilutive securities (in shares) | 4,712,425 | 4,733,590 | ||
Denominator for diluted earnings per share, adjust weighted average shares and assumed conversion (in shares) | 7,738,759 | 12,081,754 | 7,729,003 | 12,102,919 |
Basic earnings (loss) per common share (in dollars per share) | $ (0.05) | $ 0 | $ (0.05) | $ 0.10 |
Diluted earnings (loss) per common share and common share equivalent (in dollars per share) | $ (0.05) | $ 0 | $ (0.05) | $ 0.06 |
Note 3 - Antidilutive Securitie
Note 3 - Antidilutive Securities Excluded from Calculation of EPS (Details) - shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Anti-dilutive awards and options (in shares) | 4,325,711 |
Note 4 - Acquisition (Details T
Note 4 - Acquisition (Details Textual) - Akimbo [Member] $ in Millions | Dec. 22, 2014USD ($) |
Stock Issued During Period, Value, Acquisitions | $ 3 |
Goodwill Amortization Period | 15 years |
Note 4 - Business Acquisition (
Note 4 - Business Acquisition (Details) - Akimbo [Member] | Dec. 22, 2014USD ($) |
Software | $ 2,585,385 |
Equipment and other assets | 2,252 |
Customer list and contracts | 396,824 |
Goodwill | 15,539 |
Trade accounts payable | (300,000) |
Indemnification liability | (450,000) |
Total | $ 2,250,000 |
Note 5 - Income Taxes (Details
Note 5 - Income Taxes (Details Textual) $ in Millions | Jun. 30, 2016USD ($) |
Deferred Tax Assets, Net of Valuation Allowance | $ 1.6 |
Deferred Tax Assets, Valuation Allowance | $ 12.2 |
Note 6 - Related Party Transa28
Note 6 - Related Party Transactions (Details Textual) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Herb Authier [Member] | ||
Related Party Transaction, Purchases from Related Party | $ 24,231 | $ 45,750 |
Angry Pug Sportswear [Member] | ||
Related Party Transaction, Purchases from Related Party | 2,250 | 857 |
Club Rio Maroc Bar, Lush Rooftop, and Nirvana Bar and Rock [Member] | ||
Revenue from Related Parties | $ 24,876 | $ 20,901 |
Note 7 - Employment Agreements
Note 7 - Employment Agreements (Details Textual) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Louis A. Hoch [Member] | |
Supplemental Unemployment Benefits, Estimated Total Financial Impact | $ 2 |
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost | 1.3 |
Michael R. Long and Louis A. Hoch [Member] | Minimum [Member] | |
Supplemental Unemployment Benefits, Estimated Total Financial Impact, In Case of Death | 1 |
Supplemental Unemployment Benefits, Estimated Total Financial Impact, In Case of Disability | 1.8 |
Michael R. Long and Louis A. Hoch [Member] | Maximum [Member] | |
Supplemental Unemployment Benefits, Estimated Total Financial Impact, In Case of Disability | $ 2.2 |
Michael R. Long and Louis A. Hoch [Member] | |
Supplemental Unemployment Benefits, Separation Payments, Ratio | 2.95 |
Supplemental Unemployment Benefits, Separation Payments for Non-competition, Ratio | 2 |
Supplemental Unemployment Benefits, Separation Payments, Ratio, In Case of Death | 2.95 |
Supplemental Unemployment Benefits, Separation Payments, Ratio, In Case of Disability | 2.95 |
Supplemental Unemployment Benefits, Separation Payments, In Case of Disability, Term | 3 years |
Michael R. Long [Member] | Minimum [Member] | |
Supplemental Unemployment Benefits, Estimated Total Financial Impact | $ 1.5 |
Michael R. Long [Member] | Maximum [Member] | |
Supplemental Unemployment Benefits, Estimated Total Financial Impact | 2 |
Michael R. Long [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost | $ 1.3 |
Note 8 - Purchase of Equity S30
Note 8 - Purchase of Equity Securities (Details Textual) - shares | Dec. 27, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Scenario, Forecast [Member] | Executive Officer [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 10 | ||
Scenario, Forecast [Member] | Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 2 | ||
Scenario, Forecast [Member] | Employees [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 400,000 | ||
Scenario, Forecast [Member] | Employees [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 500,000 | ||
Scenario, Forecast [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 589,488 | ||
Executives and Directors [Member] | |||
Treasury Stock, Shares, Acquired | 0 | 0 |
Note 9 - Reverse Stock Split (D
Note 9 - Reverse Stock Split (Details Textual) | Jul. 23, 2015$ / sharesshares | Jun. 30, 2016$ / sharesshares | Dec. 31, 2015$ / sharesshares |
Reverse Stock Split [Member] | |||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 15 | ||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Stock Issued During Period, Shares, Reverse Stock Splits | 1,117 |
Note 10 - Legal Proceedings (De
Note 10 - Legal Proceedings (Details Textual) - USD ($) | Jul. 05, 2016 | Jun. 30, 2016 |
Fraudulent Credit Transactions on a Customer Account [Member] | Maximum [Member] | ||
Loss Contingency, Estimate of Possible Loss, Dismissal Amount | $ 181,709 | |
Subsequent Event [Member] | Shelby Systems [Member] | Settled Litigation [Member] | ||
Litigation Settlement, Amount | $ 97,493 |