Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Planet Payment Inc | |
Entity Central Index Key | 1362925 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 54,258,750 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $11,313,689 | $9,837,791 |
Restricted cash | 3,680,925 | 4,167,560 |
Accounts receivable, net of allowances of $0.1 million as of March 31, 2015 and December 31, 2014, respectively | 7,358,715 | 6,948,595 |
Prepaid expenses and other assets | 1,682,340 | 1,136,821 |
Total current assets | 24,035,669 | 22,090,767 |
Other assets: | ||
Restricted cash | 432,071 | 432,094 |
Property and equipment, net | 2,181,255 | 2,139,747 |
Software development costs, net | 4,525,805 | 4,612,457 |
Intangible assets, net | 1,771,070 | 2,046,700 |
Goodwill | 285,327 | 319,671 |
Security deposits and other assets | 2,337,088 | 2,289,858 |
Total other assets | 11,532,616 | 11,840,527 |
Total assets | 35,568,285 | 33,931,294 |
Current liabilities: | ||
Accounts payable | 474,721 | 512,057 |
Accrued expenses | 3,498,067 | 2,918,645 |
Due to merchants | 3,864,848 | 4,352,199 |
Current portion of capital leases | 429,979 | 458,812 |
Total current liabilities | 8,267,615 | 8,241,713 |
Long-term liabilities: | ||
Long-term portion of capital leases and deferred revenue | 1,476,159 | 1,560,310 |
Total long-term liabilities | 1,476,159 | 1,560,310 |
Total liabilities | 9,743,774 | 9,802,023 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Convertible preferred stock—10,000,000 shares authorized as of March 31, 2015 and December 31, 2014, $0.01 par value: Series A—2,243,750 issued and outstanding as of March 31, 2015 and December 31, 2014; $8,975,000 aggregate liquidation preference | 22,438 | 22,438 |
Common stock—250,000,000 shares authorized as of March 31, 2015 and December 31, 2014, $0.01 par value, and 55,519,291 and 55,016,191 shares issued and outstanding as of March 31, 2015, and 55,680,999 and 55,177,899 shares issued and outstanding as of December 31, 2014 | 555,193 | 556,810 |
Treasury stock, at cost, 503,100 shares as of March 31, 2015 and December 31, 2014 | -822,603 | -822,603 |
Additional paid-in capital | 103,519,915 | 103,277,253 |
Accumulated other comprehensive loss | -431,205 | -173,774 |
Accumulated deficit | -77,019,227 | -78,730,853 |
Total stockholders' equity | 25,824,511 | 24,129,271 |
Total liabilities and stockholders' equity | $35,568,285 | $33,931,294 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowances (in dollars) | $100,000 | $100,000 |
Series A Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Series A Convertible preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Series A Convertible preferred stock, shares issued | 2,243,750 | 2,243,750 |
Series A Convertible preferred stock, shares outstanding | 2,243,750 | 2,243,750 |
Series A Convertible preferred stock, aggregate liquidation preference (in dollars) | $8,975,000 | $8,975,000 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares issued | 55,519,291 | 55,680,999 |
Common stock, shares outstanding | 55,016,191 | 55,177,899 |
Treasury Stock, Shares | 503,100 | 503,100 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue: | ||
Net revenue | $12,132,770 | $11,175,117 |
Cost of revenue: | ||
Payment processing service fees | 2,588,204 | 2,518,821 |
Processing and service costs | 3,237,940 | 3,714,593 |
Total cost of revenue | 5,826,144 | 6,233,414 |
Selling, general and administrative expenses | 4,470,400 | 5,081,793 |
Restructuring charges | 629,215 | |
Total operating expenses | 10,296,544 | 11,944,422 |
Income (loss) from operations | 1,836,226 | -769,305 |
Other (expense) income: | ||
Interest expense | -14,613 | -16,170 |
Interest income | 426 | 175 |
Total other expense, net | -14,187 | -15,995 |
Income (loss) from operations before (provision) benefit for income taxes | 1,822,039 | -785,300 |
(Provision) benefit for income taxes | -110,413 | 6,010 |
Net income (loss) | $1,711,626 | ($779,290) |
Basic net income (loss) per share applicable to common stockholders ( in dollars per share) | $0.03 | ($0.01) |
Diluted net income (loss) per share applicable to common stockholders (in dollars per share) | $0.03 | ($0.01) |
Weighted average common stock outstanding (basic) (in shares) | 53,800,606 | 53,437,184 |
Weighted average common stock outstanding (diluted) (in shares) | 54,448,382 | 53,437,184 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||
Net income (loss) | $1,711,626 | ($779,290) |
Foreign currency translation adjustment | -257,431 | -12,913 |
Total comprehensive income (loss) | $1,454,195 | ($792,203) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $1,711,626 | ($779,290) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Stock-based compensation expense | 233,462 | 311,124 |
Depreciation and amortization expense | 725,173 | 746,313 |
(Recovery) provision for doubtful accounts | -1,007 | 3,268 |
Disposal of property and equipment | 3,157 | |
Gain on insurance settlement | -517,930 | |
Changes in operating assets and liabilities: | ||
Decrease in settlement assets | 486,539 | 1,496,906 |
(Increase) decrease in accounts receivables, prepaid expenses and other current assets | -436,702 | 346,274 |
Increase in security deposits and other assets | -47,230 | -107,049 |
Increase (decrease) in accounts payable and accrued expenses | 454,979 | -1,112,427 |
Decrease in due to merchants | -487,255 | -1,524,224 |
Other | -81,947 | -10,979 |
Net cash provided by (used in) operating activities | 2,039,708 | -626,927 |
Cash flows from investing activities: | ||
Decrease (increase) in restricted cash | 119 | -230,094 |
Decrease in merchant reserves | -96 | |
Purchase of property and equipment | -123,817 | -19,756 |
Capitalized software development | -287,223 | -397,401 |
Purchase of intangible assets | -5,888 | -53,695 |
Net cash used in investing activities | -416,905 | -700,946 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 602,572 | |
Principal payments on capital lease obligations | -146,905 | -137,922 |
Net cash (used in) provided by financing activities | -146,905 | 464,650 |
Net increase (decrease) in cash and cash equivalents | 1,475,898 | -863,223 |
Beginning of period | 9,837,791 | 6,572,468 |
End of period | 11,313,689 | 5,709,245 |
Cash paid for: | ||
Interest | 18,837 | 18,272 |
Income taxes | 199,364 | 180,835 |
Non-cash investing and financing activities: | ||
Assets acquired under capital leases | 79,291 | 163,861 |
Accrued capitalized hardware, software and fixed assets | 38,609 | 50,401 |
Capitalized stock-based compensation | $10,711 | $10,352 |
Business_description_and_basis
Business description and basis of presentation | 3 Months Ended |
Mar. 31, 2015 | |
Business description and basis of presentation | |
Business description and basis of presentation | 1. Business description and basis of presentation |
Business description | |
Planet Payment, Inc. together with its wholly owned subsidiaries (“Planet Payment,” the “Company,” “we,” or “our”) is a provider of international payment and transaction processing and multi-currency processing services. The Company provides its services to approximately 105,000 active merchant locations in 23 countries and territories across the Asia Pacific region, the Americas, the Middle East, Africa and Europe, primarily through its acquiring bank and processor customers, as well as through its own direct sales force. The Company provides banks and their merchants with innovative services to accept, process and reconcile electronic payments. The Company’s point-of-sale and e-commerce services are integrated within the payment card transaction process enabling its acquiring customers to process and reconcile payment transactions in multiple currencies, geographies and channels. The Company’s ATM services provide its domestic and international acquirers with additional processing capabilities to help them increase revenue and improve customer satisfaction. The Company also offers non-financial transaction processing services that allow merchants to offer a range of commercial services including pre-paid mobile phone top-up and bill payments using the same point-of-sale devices deployed to accept payment cards. The Company is a registered third party processor with the major card associations and operates in accordance with industry standards, including the Payment Card Industry, or PCI, Security Council’s Data Security Standards. | |
Basis of presentation | |
The unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). | |
The accompanying unaudited condensed consolidated interim financial statements include the accounts of Planet Payment, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. | |
Unaudited condensed consolidated interim financial information | |
The accompanying unaudited condensed consolidated interim financial statements as of March 31, 2015 and for the periods ended March 31, 2015 and 2014 have been prepared on the same basis as the annual consolidated financial statements. In the opinion of management, the unaudited financial information for the interim periods presented reflects all adjustments, which are normal and recurring, necessary for a fair presentation of the statement of operations, financial position and cash flows. The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Operating results for the interim period ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. The December 31, 2014 balance sheet information has been derived from the audited financial statements at that date. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulation of the Securities and Exchange Commission, or SEC. | |
Concentration_of_credit_risk
Concentration of credit risk | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Concentration of credit risk | |||||||
Concentration of credit risk | 2. Concentration of credit risk | ||||||
The Company’s assets that are exposed to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash and receivables from clients. The Company places some of its cash, cash equivalents, and restricted cash with financial banking institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company also maintains cash balances at foreign banking institutions, which are not insured by the FDIC. | |||||||
The Company maintains an allowance for uncollectible accounts receivable based on expected collectability and performs ongoing credit evaluations of customers’ financial condition. | |||||||
The Company’s accounts receivable concentrations of 10% and greater are as follows: | |||||||
As of | As of | ||||||
March 31, | December 31, | ||||||
2015 | 2014 | ||||||
Customer A | 31 | % | 28 | % | |||
Customer B | 11 | 13 | |||||
Customer C | 15 | 17 | |||||
The Company’s revenue concentrations of 10% and greater are as follows: | |||||||
Three Months Ended | |||||||
March 31, | March 31, | ||||||
2015 | 2014 | ||||||
Customer A | 20 | % | 22 | % | |||
Customer C | 11 | 13 | |||||
Net_income_loss_per_share
Net income (loss) per share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Net income (loss) per share | ||||||||
Net income (loss) per share | 3. Net income (loss) per share | |||||||
The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share (“ASC topic 260”). Under ASC topic 260, securities that contain rights to receive non-forfeitable dividends (whether paid or unpaid) are participating securities and should be included in the two-class method of computing earnings per share. The Company’s preferred stockholders are entitled to participate in dividends and earnings when, and if, dividends are declared on the common stock. As such, the Company calculates net income (loss) per share using the two-class method. The two-class method is an earnings formula that treats a participating security as having rights to dividends that otherwise would have been available to common and preferred stockholders based on their respective rights to receive dividends. Losses are not allocated to the preferred stockholders for computing net loss per share under the two-class method because the preferred stockholders do not have contractual obligations to share in the losses of the Company. | ||||||||
Basic earnings per share is calculated by dividing net income (loss), adjusted for amounts allocated to participating securities under the two-class method, if applicable, by the weighted average number of common stock outstanding during the period. | ||||||||
Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of shares of the Company’s common stock outstanding, assuming dilution, during the period. The diluted earnings per share calculation assumes (i) all stock options and warrants which are in the money are exercised at the beginning of the period and (ii) each issue or series of issues of potential common stock are considered in sequence from the most dilutive to the least dilutive. That is, dilutive potential common stock with the lowest “earnings add-back per incremental share” shall be included in dilutive earnings per share before those with higher earnings add back per incremental share. | ||||||||
The following table sets forth the computation of basic and diluted net income (loss) per share: | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator: | ||||||||
Net income (loss) | $ | 1,711,626 | $ | -779,290 | ||||
Amounts allocated to participating preferred stockholders under the two-class method | -193,285 | — | ||||||
Net income (loss) applicable to common stockholders (basic and dilutive) | $ | 1,518,341 | $ | -779,290 | ||||
Denominator: | ||||||||
Weighted average common stock outstanding (basic) | 53,800,606 | 53,437,184 | ||||||
Common equivalent shares from options and warrants to purchase common stock | 647,776 | — | ||||||
Weighted average common stock outstanding (diluted)(1) | 54,448,382 | 53,437,184 | ||||||
Basic net income (loss) per share applicable to common stockholders | $ | 0.03 | $ | -0.01 | ||||
Diluted net income (loss) per share applicable to common stockholders(1) | $ | 0.03 | $ | -0.01 | ||||
-1 | In accordance with ASC 260-10-45-48 for the three months ended March 31, 2015 and 2014, the Company has excluded 1,035,180 and 1,077,712, respectively, of contingently issued restricted shares from diluted weighted average common stock outstanding as the contingencies (a) were not satisfied at the reporting date nor (b) would have been satisfied if the reporting date was at the end of the contingency period. | |||||||
The following table sets forth the weighted average securities outstanding that have been excluded from the diluted net income (loss) per share calculation because the effect would have been anti-dilutive: | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Stock options | 5,908,970 | 8,106,302 | ||||||
Restricted stock awards | 225,442 | 506,812 | ||||||
Warrants | - | 183,983 | ||||||
Convertible preferred stock(1) | 6,851,144 | 6,851,144 | ||||||
Total antidilutive securities | 12,985,556 | 15,648,241 | ||||||
-1 | Diluted net income (loss) per share increases (decreases) when convertible preferred stock is included in the required sequence in the diluted earnings per share computation. As such, convertible preferred stock is excluded from the computation of diluted earnings per share for the three months ended March 31, 2015 and 2014. | |||||||
Stockbased_compensation_expens
Stock-based compensation expense and assumptions | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Stock-based compensation expense and assumptions | ||||||||
Stock-based compensation expense and assumptions | 4. Stock-based compensation expense and assumptions | |||||||
During the first quarter of 2015, 0.2 million stock options were granted to an employee of the Company with a grant fair value of $0.2 million. The actual number of shares that will be issued upon exercise of the options is subject to the achievement of service-based vesting conditions. Stock-based compensation expense is recorded on a straight line basis from the date of the grant over the requisite service period of 36 months. | ||||||||
During the first quarter of 2015, 0.1 million restricted stock awards with a grant fair value of $0.1 million were granted to an employee of the Company. The final number of vested shares is subject to service-based vesting conditions. Expense is recorded on a straight line basis from the date of the grant over the applicable service period of 36 months. | ||||||||
Stock-based compensation expense is measured at the grant date based on fair value and recognized as an expense over the requisite service period, net of an estimated forfeiture rate. | ||||||||
The following summarizes stock-based compensation expense recognized by income statement classification: | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Processing and service costs | $ | 50,497 | $ | 63,910 | ||||
Selling, general and administrative expenses | 182,965 | 212,081 | ||||||
Restructuring charges | - | 35,133 | ||||||
Total stock-based compensation expense | $ | 233,462 | $ | 311,124 | ||||
The following summarizes stock-based compensation expense recognized by type: | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Stock options | $ | 131,272 | $ | 217,583 | ||||
Restricted stock awards | 102,190 | 93,541 | ||||||
Total stock-based compensation expense | $ | 233,462 | $ | 311,124 | ||||
Property_and_equipment
Property and equipment | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Property and equipment | ||||||||||||
Property and equipment | 5. Property and equipment | |||||||||||
Property and equipment, net consist of the following: | ||||||||||||
Estimated | As of | As of | ||||||||||
useful life | March 31, | December 31, | ||||||||||
(in years) | 2015 | 2014 | ||||||||||
Equipment | 2 | - | 7 | $ | 945,067 | $ | 945,116 | |||||
Computer hardware | 3 | - | 5 | 3,166,708 | 2,963,629 | |||||||
Furniture and fixtures | 5 | - | 7 | 193,442 | 194,399 | |||||||
Leasehold improvements | 3 | - | 10 | 755,907 | 749,275 | |||||||
Total property and equipment, gross | 5,061,124 | 4,852,419 | ||||||||||
Less: Accumulated depreciation and amortization | -2,879,869 | -2,712,672 | ||||||||||
Property and equipment, net | $ | 2,181,255 | $ | 2,139,747 | ||||||||
Property and equipment depreciation and amortization expense is as follows: | ||||||||||||
Three months ended | ||||||||||||
March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Depreciation and amortization expense | $ | 171,229 | $ | 156,423 | ||||||||
Goodwill_and_intangible_assets
Goodwill and intangible assets | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Goodwill and intangible assets | |||||||||||||||||||||||
Goodwill and intangible assets | 6. Goodwill and intangible assets | ||||||||||||||||||||||
The change in carrying amount of goodwill for the three months ended March 31, 2015 is as follows: | |||||||||||||||||||||||
Goodwill, gross, as of December 31, 2014 | $ | 319,671 | |||||||||||||||||||||
Impact of change in Euro exchange rate | -34,344 | ||||||||||||||||||||||
Accumulated impairment losses as of March 31, 2015 | — | ||||||||||||||||||||||
Goodwill, net, as of March 31, 2015 | $ | 285,327 | |||||||||||||||||||||
The entire goodwill balance is assigned to the payment processing services segment as this is the reporting unit expected to benefit from the synergies of the combination. | |||||||||||||||||||||||
Intangible assets are recorded at estimated fair value and are amortized ratably over their estimated useful lives to processing and service costs, which are included in cost of revenue. | |||||||||||||||||||||||
The gross book value, accumulated amortization and amortization periods of intangible assets were as follows: | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | Amortization | |||||||||||||||||||||
Gross book | Accumulated | Net book | Gross book | Accumulated | Net book | period | |||||||||||||||||
value | amortization | value | value | amortization | value | (in years) | |||||||||||||||||
Trademarks and patents | $ | 1,159,323 | $ | -407,697 | $ | 751,626 | $ | 1,158,572 | $ | -387,134 | $ | 771,438 | 15 | - | 21 | ||||||||
Technology | 2,376,150 | -1,356,706 | 1,019,444 | 2,662,164 | -1,386,902 | 1,275,262 | 5 | ||||||||||||||||
Intangible assets, net | $ | 3,535,473 | $ | -1,764,403 | $ | 1,771,070 | $ | 3,820,736 | $ | -1,774,036 | $ | 2,046,700 | |||||||||||
Amortization expense related to intangible assets is as follows: | |||||||||||||||||||||||
Three months ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Amortization expense | $ | 145,000 | $ | 171,291 | |||||||||||||||||||
Commitments_and_contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and contingencies | |
Commitments and contingencies | 7. Commitments and contingencies |
Employment agreements | |
Pursuant to employment agreements with certain employees, the Company had a commitment to pay severance of approximately $0.8 million as of March 31, 2015 and December 31, 2014, in the event of termination without cause, as defined in the employment agreements. Additionally, in the event of termination upon a change of control, as defined in the agreements, the Company had a commitment to pay severance of approximately $1.0 million as of March 31, 2015 and December 31, 2014. | |
Contingent liabilities | |
In instances where the Company is acting as the merchant acquirer, the Company bears a risk that a merchant may engage in fraud by submitting for payment certain credit card transactions that may have been manipulated, are fictitious, or are otherwise not bona fide. Similarly, the Company bears the risk that a merchant becomes insolvent, owing money to cardholders. To the extent that such fraud or insolvency occurs in circumstances where the Company is liable to make good any resultant losses, this could affect the Company’s operating results and cash flows. The Company has required certain merchants to post cash reserves of approximately $0.7 million with the sponsoring bank against such liabilities and has itself paid the acquirer a security deposit of $0.2 million in connection therewith, which is included in long-term “Restricted cash” on the condensed consolidated balance sheets. In addition, the Company holds merchant reserves of approximately $2.2 million. This reserve amount is included in “Restricted cash” with an offset in “Due to merchants”. Under FASB ASC 460, Guarantees, the Company evaluates its ultimate risk and records an estimate of potential loss for chargeback’s related to merchant fraud and processing errors based upon an assessment of actual historical fraud rates and errors in processing compared to recent bank card processing volume levels. No contingent liability has been recorded as of March 31, 2015 and December 31, 2014, as the risk of material loss is considered remote. The Company monitors these contingent liabilities on a quarterly basis and will provide for a reserve if deemed necessary. | |
Outstanding litigation | |
From time to time, the Company’s operating entities are involved in legal proceeding in the ordinary course of business. While any litigation contains an element of uncertainty, the Company has no reason to believe that the outcome of such proceedings or claims will have a material adverse effect on the financial condition or results of operations of the Company. | |
Acquiring bank sponsorship agreement | |
In order to offer merchant acquiring services for Visa and MasterCard transactions, the Company must be sponsored by a financial institution that is a principal member of the Visa and MasterCard networks. | |
The Company entered into a five year agreement with a sponsoring bank effective September 1, 2013. The Company is required to pay minimum annual sponsorship transaction fees of $0.3 million in year one, escalating each year with minimum fees of $0.5 million in year five for total minimum fees of $1.8 million to be paid over the term of the agreement. Sponsorship fees are recorded to cost of sales with the total agreement minimum of $1.8 million recognized on a straight line basis over the term of the agreement. | |
Pursuant to the agreement, the Company is liable for all losses incurred by the sponsoring bank with respect to the activities of our merchants sponsored under the agreement. No contingent liability has been recorded as of March 31, 2015 as the risk of material loss is considered remote based on historical information. The Company monitors this contingent liability on a quarterly basis and will provide for a reserve if deemed necessary. | |
Insurance reimbursement | |
Based on the loss recovery model the Company recorded an insurance reimbursement gain of $0.5 million in selling, general and administrative expenses during the first quarter of 2015. The insurance reimbursement was related to a previous property and casualty loss recognized by the Company. The insurance proceeds were collected in April 2015. | |
Related_party_transactions
Related party transactions | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Related party transactions | ||||||||
Related party transactions | 8. Related party transactions | |||||||
The Company incurred the following amounts to companies that are principally owned by executives, directors or stockholders of the Company: | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Rent | $ | 90,887 | $ | 125,094 | ||||
Consulting and professional fees | 1,929 | 611 | ||||||
Rent was paid to BDP Realty Associates LLC, a company in which our former chief executive officer and Chairman of the Board of Directors, Philip Beck has a one-third (1/3rd) interest. In February 2015, Philip Beck ceased to serve as the Company’s Director and Chairman of the Board. The Company’s related party expense for 2015 is for the two months Philip Beck was Chairman of the Board of Directors. | ||||||||
Consulting and professional fees were paid to a professional services company where a family member of Philip Beck has a substantial interest but Mr. Beck does not have any financial interest in such company. | ||||||||
Accrued_expenses
Accrued expenses | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accrued expenses | ||||||||
Accrued expenses | 9. Accrued expenses | |||||||
The following are the components of accrued expenses: | ||||||||
As of | As of | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Deferred revenue(*) | $ | 834,483 | $ | 800,650 | ||||
Other(**) | 2,663,584 | 2,117,995 | ||||||
Total accrued expenses | $ | 3,498,067 | $ | 2,918,645 | ||||
(*)Current deferred revenue will be recognized as revenue ratably over the next 12 months. As of March 31, 2015, included in the balance sheet classification “Long-term portion of capital leases and deferred revenue” is the non-current portion of deferred revenue in the amount of $1.0 million as of March 31, 2015 and December 31, 2014. | ||||||||
(**)No amounts included in “Other” exceed 10% of total current liabilities. | ||||||||
Segment_information
Segment information | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment information | ||||||||
Segment information | 10. Segment information | |||||||
General information | ||||||||
The segment and geographic information provided in the table below is being reported consistent with the Company’s method of internal reporting. Operating segments are defined as components of an enterprise for which separate financial information is available and which is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker, or CODM, reviews net revenue and gross profit by service by geographical region. The Company operates in two reportable segments; multi-currency processing services and payment processing services. | ||||||||
Information about revenue, profit and assets | ||||||||
The CODM evaluates performance and allocates resources based on net revenue and gross profit of each segment. For purposes of analyzing segments, gross profit of the multi-currency processing services segment is equal to net revenue less multi-currency cost of sales of $0.6 million, which is included in “processing and services costs” for the three months ended March 31, 2015 and 2014, respectively. The gross profit for the payment processing services segment includes net revenue of the segment less the cost of revenue component “payment processing services fees”, which includes interchange and card network fees and assessments. Net revenue and gross profit by geographical region is based upon where the transaction originated. Lastly, the Company does not evaluate performance or allocate resources using segment asset data. Long-lived assets are primarily located in the Americas and Europe and as of March 31, 2015 and December 31, 2014, long-lived asset amounts are $8.8 million and $9.1 million, respectively. | ||||||||
The Company conducts its business primarily in three geographical regions: Asia Pacific (“APAC”), the Americas, and Central Europe, Middle East and Africa (“CEMEA”). The following table provides revenue concentration by geographic region. Analysis of revenue by segment and geographical region and reconciliations to consolidated revenue and gross profit are as follows: | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Net Revenue: | ||||||||
APAC | $ | 4,036,276 | $ | 3,886,007 | ||||
Americas | 1,493,130 | 1,210,806 | ||||||
CEMEA | 2,152,359 | 2,341,622 | ||||||
Total multi-currency processing services revenue | 7,681,765 | 7,438,435 | ||||||
Payment processing services revenue | 4,451,005 | 3,736,682 | ||||||
Net revenue | $ | 12,132,770 | $ | 11,175,117 | ||||
Gross Profit: | ||||||||
APAC | $ | 4,006,712 | $ | 3,858,140 | ||||
Americas | 1,396,279 | 1,178,702 | ||||||
CEMEA | 1,666,004 | 1,803,744 | ||||||
Total multi-currency processing services gross profit | 7,068,995 | 6,840,586 | ||||||
Payment processing services gross profit | 1,862,800 | 1,217,861 | ||||||
Total gross profit | $ | 8,931,795 | $ | 8,058,447 | ||||
Payment processing service revenue and gross profit is the result of transactions that primarily originated in the Americas. For the three months ended March 31, 2015 Customer B and Customer I had revenue concentration of 15% and 19% respectively. No individual customer of the payment processing segment was greater than 10% of segment revenue for the three months ended March 31, 2014. | ||||||||
Concentration of revenue by customer by geographical region: | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Multi-currency processing services revenue: | ||||||||
APAC: | ||||||||
Customer A | 60 | % | 64 | % | ||||
Americas: | ||||||||
Customer D | 15 | |||||||
Customer E | 14 | 23 | ||||||
Customer F | 18 | 26 | ||||||
Customer G | * | 11 | ||||||
CEMEA: | ||||||||
Customer C | 62 | 61 | ||||||
Customer H | 37 | 39 | ||||||
(*)Less than 10% revenue concentration. | ||||||||
Restructuring_charges
Restructuring charges | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Restructuring charges | ||||||||||||||
Restructuring charges | 11. Restructuring charges | |||||||||||||
In 2014, the Company initiated a realignment of its workforce aimed at achieving greater operational efficiencies. As a result of the realignment, the Company incurred total restructuring charges during the three months ended March 31, 2014 of approximately $0.6 million. | ||||||||||||||
The table below sets forth the cash components and activity associated with the realignment of workforce and business for the three months ended March 31, 2015: | ||||||||||||||
Balance as of | Balance as of | |||||||||||||
January 1, 2015 | Charges | Cash Payment | 31-Mar-15 | |||||||||||
Severance and benefits | $ | 195,773 | $ | — | $ | 116,645 | $ | 79,128 | ||||||
Legal expenses and other | — | — | — | — | ||||||||||
Total restructuring charges | $ | 195,773 | $ | — | $ | 116,645 | $ | 79,128 | ||||||
Stock_Repurchase_Program
Stock Repurchase Program | 3 Months Ended |
Mar. 31, 2015 | |
Stock Repurchase Program | |
Stock repurchase program | 12. Stock Repurchase Program |
In October 2014, the Company announced that its Board of Directors authorized the repurchase of up to $6.0 million of the Company’s outstanding shares of common stock. The shares may be purchased from time to time for a period ending December 31, 2015. The timing, price and quantity of purchases will be at the discretion of the Company and the program may be discontinued or suspended at any time. As of March 31, 2015, the Company repurchased approximately 0.5 million shares of common stock for an aggregate price of $0.8 million. From April 1, 2015 to April 30, 2015, the Company repurchased approximately 0.8 million shares of common stock for an aggregate price of $1.4 million. Total amount of common stock repurchased under the program through April 30, 2015 was 1.3 million shares for an aggregate price of $2.2 million. | |
Concentration_of_credit_risk_T
Concentration of credit risk (Tables) (Accounts Receivable) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accounts Receivable | |||||||
Concentration of credit risk | |||||||
Schedule of concentrations of 10% and greater | |||||||
As of | As of | ||||||
March 31, | December 31, | ||||||
2015 | 2014 | ||||||
Customer A | 31 | % | 28 | % | |||
Customer B | 11 | 13 | |||||
Customer C | 15 | 17 | |||||
Net_income_loss_per_share_Tabl
Net income (loss) per share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Net income (loss) per share | ||||||||
Schedule of computation of basic and diluted net income (loss) per share | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator: | ||||||||
Net income (loss) | $ | 1,711,626 | $ | -779,290 | ||||
Amounts allocated to participating preferred stockholders under the two-class method | -193,285 | — | ||||||
Net income (loss) applicable to common stockholders (basic and dilutive) | $ | 1,518,341 | $ | -779,290 | ||||
Denominator: | ||||||||
Weighted average common stock outstanding (basic) | 53,800,606 | 53,437,184 | ||||||
Common equivalent shares from options and warrants to purchase common stock | 647,776 | — | ||||||
Weighted average common stock outstanding (diluted)(1) | 54,448,382 | 53,437,184 | ||||||
Basic net income (loss) per share applicable to common stockholders | $ | 0.03 | $ | -0.01 | ||||
Diluted net income (loss) per share applicable to common stockholders(1) | $ | 0.03 | $ | -0.01 | ||||
In accordance with ASC 260-10-45-48 for the three months ended March 31, 2015 and 2014, the Company has excluded 1,035,180 and 1,077,712, respectively, of contingently issued restricted shares from diluted weighted average common stock outstanding as the contingencies (a) were not satisfied at the reporting date nor (b) would have been satisfied if the reporting date was at the end of the contingency period. | ||||||||
Schedule of weighted average securities outstanding that have been excluded from the diluted net income (loss) per share calculation because the effect would have been anti-dilutive | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Stock options | 5,908,970 | 8,106,302 | ||||||
Restricted stock awards | 225,442 | 506,812 | ||||||
Warrants | - | 183,983 | ||||||
Convertible preferred stock(1) | 6,851,144 | 6,851,144 | ||||||
Total antidilutive securities | 12,985,556 | 15,648,241 | ||||||
Diluted net income (loss) per share increases (decreases) when convertible preferred stock is included in the required sequence in the diluted earnings per share computation. As such, convertible preferred stock is excluded from the computation of diluted earnings per share for the three months ended March 31, 2015 and 2014. | ||||||||
Stockbased_compensation_expens1
Stock-based compensation expense and assumptions (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Stock-based compensation expense and assumptions | ||||||||
Summary of stock-based compensation expense recognized by income statement classification | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Processing and service costs | $ | 50,497 | $ | 63,910 | ||||
Selling, general and administrative expenses | 182,965 | 212,081 | ||||||
Restructuring charges | - | 35,133 | ||||||
Total stock-based compensation expense | $ | 233,462 | $ | 311,124 | ||||
Summary of stock-based compensation expense recognized by type | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Stock options | $ | 131,272 | $ | 217,583 | ||||
Restricted stock awards | 102,190 | 93,541 | ||||||
Total stock-based compensation expense | $ | 233,462 | $ | 311,124 | ||||
Property_and_equipment_Tables
Property and equipment (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Property and equipment | ||||||||||||
Schedule of property and equipment, net | ||||||||||||
Estimated | As of | As of | ||||||||||
useful life | March 31, | December 31, | ||||||||||
(in years) | 2015 | 2014 | ||||||||||
Equipment | 2 | - | 7 | $ | 945,067 | $ | 945,116 | |||||
Computer hardware | 3 | - | 5 | 3,166,708 | 2,963,629 | |||||||
Furniture and fixtures | 5 | - | 7 | 193,442 | 194,399 | |||||||
Leasehold improvements | 3 | - | 10 | 755,907 | 749,275 | |||||||
Total property and equipment, gross | 5,061,124 | 4,852,419 | ||||||||||
Less: Accumulated depreciation and amortization | -2,879,869 | -2,712,672 | ||||||||||
Property and equipment, net | $ | 2,181,255 | $ | 2,139,747 | ||||||||
Schedule of property and equipment depreciation and amortization expense | ||||||||||||
Three months ended | ||||||||||||
March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Depreciation and amortization expense | $ | 171,229 | $ | 156,423 | ||||||||
Goodwill_and_intangible_assets1
Goodwill and intangible assets (Tables) | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Goodwill and intangible assets | |||||||||||||||||||||||
Schedule of changes in carrying amount of goodwill | |||||||||||||||||||||||
Goodwill, gross, as of December 31, 2014 | $ | 319,671 | |||||||||||||||||||||
Impact of change in Euro exchange rate | -34,344 | ||||||||||||||||||||||
Accumulated impairment losses as of March 31, 2015 | — | ||||||||||||||||||||||
Goodwill, net, as of March 31, 2015 | $ | 285,327 | |||||||||||||||||||||
Schedule of the gross book value, accumulated amortization and amortization periods of intangible assets | |||||||||||||||||||||||
As of March 31, 2015 | As of December 31, 2014 | Amortization | |||||||||||||||||||||
Gross book | Accumulated | Net book | Gross book | Accumulated | Net book | period | |||||||||||||||||
value | amortization | value | value | amortization | value | (in years) | |||||||||||||||||
Trademarks and patents | $ | 1,159,323 | $ | -407,697 | $ | 751,626 | $ | 1,158,572 | $ | -387,134 | $ | 771,438 | 15 | - | 21 | ||||||||
Technology | 2,376,150 | -1,356,706 | 1,019,444 | 2,662,164 | -1,386,902 | 1,275,262 | 5 | ||||||||||||||||
Intangible assets, net | $ | 3,535,473 | $ | -1,764,403 | $ | 1,771,070 | $ | 3,820,736 | $ | -1,774,036 | $ | 2,046,700 | |||||||||||
Schedule of amortization expense related to intangible assets | |||||||||||||||||||||||
Three months ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Amortization expense | $ | 145,000 | $ | 171,291 | |||||||||||||||||||
Related_party_transactions_Tab
Related party transactions (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Related party transactions | ||||||||
Schedule of amounts incurred to companies that are principally owned by executives, directors or stockholders of the Company or their families | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Rent | $ | 90,887 | $ | 125,094 | ||||
Consulting and professional fees | 1,929 | 611 | ||||||
Accrued_expenses_Tables
Accrued expenses (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accrued expenses | ||||||||
Schedule of the components of accrued expenses | ||||||||
As of | As of | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Deferred revenue(*) | $ | 834,483 | $ | 800,650 | ||||
Other(**) | 2,663,584 | 2,117,995 | ||||||
Total accrued expenses | $ | 3,498,067 | $ | 2,918,645 | ||||
(*)Current deferred revenue will be recognized as revenue ratably over the next 12 months. As of March 31, 2015, included in the balance sheet classification “Long-term portion of capital leases and deferred revenue” is the non-current portion of deferred revenue in the amount of $1.0 million as of March 31, 2015 and December 31, 2014. | ||||||||
(**)No amounts included in “Other” exceed 10% of total current liabilities. | ||||||||
Segment_information_Tables
Segment information (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment information | ||||||||
Schedule of revenue by segment and geographical region and reconciliations to consolidated revenue and gross profit | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Net Revenue: | ||||||||
APAC | $ | 4,036,276 | $ | 3,886,007 | ||||
Americas | 1,493,130 | 1,210,806 | ||||||
CEMEA | 2,152,359 | 2,341,622 | ||||||
Total multi-currency processing services revenue | 7,681,765 | 7,438,435 | ||||||
Payment processing services revenue | 4,451,005 | 3,736,682 | ||||||
Net revenue | $ | 12,132,770 | $ | 11,175,117 | ||||
Gross Profit: | ||||||||
APAC | $ | 4,006,712 | $ | 3,858,140 | ||||
Americas | 1,396,279 | 1,178,702 | ||||||
CEMEA | 1,666,004 | 1,803,744 | ||||||
Total multi-currency processing services gross profit | 7,068,995 | 6,840,586 | ||||||
Payment processing services gross profit | 1,862,800 | 1,217,861 | ||||||
Total gross profit | $ | 8,931,795 | $ | 8,058,447 | ||||
Schedule of concentration of revenue by customer by geographical region | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Multi-currency processing services revenue: | ||||||||
APAC: | ||||||||
Customer A | 60 | % | 64 | % | ||||
Americas: | ||||||||
Customer D | 15 | |||||||
Customer E | 14 | 23 | ||||||
Customer F | 18 | 26 | ||||||
Customer G | * | 11 | ||||||
CEMEA: | ||||||||
Customer C | 62 | 61 | ||||||
Customer H | 37 | 39 | ||||||
(*)Less than 10% revenue concentration. | ||||||||
Restructuring_charges_Tables
Restructuring charges (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Restructuring charges | ||||||||||||||
Schedule of cash components and activity associated with the realignment of workforce and business | ||||||||||||||
Balance as of | Balance as of | |||||||||||||
January 1, 2015 | Charges | Cash Payment | 31-Mar-15 | |||||||||||
Severance and benefits | $ | 195,773 | $ | — | $ | 116,645 | $ | 79,128 | ||||||
Legal expenses and other | — | — | — | — | ||||||||||
Total restructuring charges | $ | 195,773 | $ | — | $ | 116,645 | $ | 79,128 | ||||||
Business_description_and_basis1
Business description and basis of presentation (Details) | Mar. 31, 2015 |
item | |
Business description and basis of presentation | |
Number of active merchant locations to which the Company provides services | 105,000 |
Number of countries in which the entity provides services | 23 |
Concentration_of_credit_risk_D
Concentration of credit risk (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Concentration of credit risk | |||
Cash, cash equivalents, and restricted cash with financial banking institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") | 250,000 | ||
Customer concentration risk | Customer C | |||
Concentration of credit risk | |||
Concentration risk (as a percent) | 11.00% | 13.00% | |
Accounts Receivable | Credit concentration risk | Customer A | |||
Concentration of credit risk | |||
Concentration risk (as a percent) | 31.00% | 28.00% | |
Accounts Receivable | Credit concentration risk | Customer B | |||
Concentration of credit risk | |||
Concentration risk (as a percent) | 11.00% | 13.00% | |
Accounts Receivable | Credit concentration risk | Customer C | |||
Concentration of credit risk | |||
Concentration risk (as a percent) | 15.00% | 17.00% | |
Revenue | Customer concentration risk | Customer A | |||
Concentration of credit risk | |||
Concentration risk (as a percent) | 20.00% | 22.00% |
Net_income_loss_per_share_Deta
Net income (loss) per share (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Numerator: | ||
Net income (loss) | $1,711,626 | ($779,290) |
Amounts allocated to participating preferred stockholders under the two-class method | -193,285 | |
Net income (loss) applicable to common stockholders - basic | $1,518,341 | ($779,290) |
Denominator: | ||
Weighted average common stock outstanding (basic) (in shares) | 53,800,606 | 53,437,184 |
Common equivalent shares from options and warrants to purchase common stock (in shares) | 647,776 | |
Weighted average common stock outstanding (diluted) (in shares) | 54,448,382 | 53,437,184 |
Basic net income (loss) per share applicable to common stockholders ( in dollars per share) | $0.03 | ($0.01) |
Diluted net income (loss) per share applicable to common stockholders (in dollars per share) | $0.03 | ($0.01) |
Net_income_loss_per_share_Deta1
Net income (loss) per share (Details 2) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Anti-dilutive securities excluded from computation of diluted earnings per share | ||
Total anti-dilutive securities (in shares) | 12,985,556 | 15,648,241 |
Contingently issued restricted shares | ||
Anti-dilutive securities excluded from computation of diluted earnings per share | ||
Total anti-dilutive securities (in shares) | 1,035,180 | 1,077,712 |
Stock options | ||
Anti-dilutive securities excluded from computation of diluted earnings per share | ||
Total anti-dilutive securities (in shares) | 5,908,970 | 8,106,302 |
Restricted stock awards | ||
Anti-dilutive securities excluded from computation of diluted earnings per share | ||
Total anti-dilutive securities (in shares) | 225,442 | 506,812 |
Warrants | ||
Anti-dilutive securities excluded from computation of diluted earnings per share | ||
Total anti-dilutive securities (in shares) | 183,983 | |
Convertible preferred stock | ||
Anti-dilutive securities excluded from computation of diluted earnings per share | ||
Total anti-dilutive securities (in shares) | 6,851,144 | 6,851,144 |
Stockbased_compensation_expens2
Stock-based compensation expense and assumptions (Details) (USD $) | 3 Months Ended | |
Share data in Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Stock-based expense | ||
Total stock-based compensation expense | $233,462 | $311,124 |
Processing and service costs | ||
Stock-based expense | ||
Total stock-based compensation expense | 50,497 | 63,910 |
Selling, general and administrative expenses | ||
Stock-based expense | ||
Total stock-based compensation expense | 182,965 | 212,081 |
Restructuring charge | ||
Stock-based expense | ||
Total stock-based compensation expense | 35,133 | |
Stock options | ||
Stock-based expense | ||
Options granted (in shares) | 0.2 | |
Fair value of options granted | 200,000 | |
Requisite service period | 36 months | |
Total stock-based compensation expense | 131,272 | 217,583 |
Restricted stock awards | ||
Stock-based expense | ||
Awards granted (in shares) | 0.1 | |
Fair value of awards granted | 100,000 | |
Requisite service period | 36 months | |
Total stock-based compensation expense | $102,190 | $93,541 |
Property_and_equipment_Details
Property and equipment (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Property and equipment | |||
Total property and equipment, gross | $5,061,124 | $4,852,419 | |
Less: Accumulated depreciation and amortization | -2,879,869 | -2,712,672 | |
Total property and equipment, net | 2,181,255 | 2,139,747 | |
Depreciation and amortization expense | 171,229 | 156,423 | |
Equipment | |||
Property and equipment | |||
Total property and equipment, gross | 945,067 | 945,116 | |
Equipment | Minimum | |||
Property and equipment | |||
Estimated useful life | 2 years | ||
Equipment | Maximum | |||
Property and equipment | |||
Estimated useful life | 7 years | ||
Computer hardware | |||
Property and equipment | |||
Total property and equipment, gross | 3,166,708 | 2,963,629 | |
Computer hardware | Minimum | |||
Property and equipment | |||
Estimated useful life | 3 years | ||
Computer hardware | Maximum | |||
Property and equipment | |||
Estimated useful life | 5 years | ||
Furniture and fixtures | |||
Property and equipment | |||
Total property and equipment, gross | 193,442 | 194,399 | |
Furniture and fixtures | Minimum | |||
Property and equipment | |||
Estimated useful life | 5 years | ||
Furniture and fixtures | Maximum | |||
Property and equipment | |||
Estimated useful life | 7 years | ||
Leasehold improvements | |||
Property and equipment | |||
Total property and equipment, gross | $755,907 | $749,275 | |
Leasehold improvements | Minimum | |||
Property and equipment | |||
Estimated useful life | 3 years | ||
Leasehold improvements | Maximum | |||
Property and equipment | |||
Estimated useful life | 10 years |
Goodwill_and_intangible_assets2
Goodwill and intangible assets (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Goodwill | |
Goodwill, gross, at the Beginning of the period | $319,671 |
Impact of change in Euro exchange rate | -34,344 |
Goodwill, net, at the end of the period | $285,327 |
Goodwill_and_intangible_assets3
Goodwill and intangible assets (Details 2) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Intangible assets | |||
Gross book value | $3,535,473 | $3,820,736 | |
Accumulated amortization | -1,764,403 | -1,774,036 | |
Net book value | 1,771,070 | 2,046,700 | |
Amortization expense | 145,000 | 171,291 | |
Trademarks And Patents | |||
Intangible assets | |||
Gross book value | 1,159,323 | 1,158,572 | |
Accumulated amortization | -407,697 | -387,134 | |
Net book value | 751,626 | 771,438 | |
Trademarks And Patents | Minimum | |||
Intangible assets | |||
Amortization period | 15 years | ||
Trademarks And Patents | Maximum | |||
Intangible assets | |||
Amortization period | 21 years | ||
Technology | |||
Intangible assets | |||
Gross book value | 2,376,150 | 2,662,164 | |
Accumulated amortization | -1,356,706 | -1,386,902 | |
Net book value | $1,019,444 | $1,275,262 | |
Amortization period | 5 years |
Commitments_and_contingencies_
Commitments and contingencies (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Sep. 01, 2013 | Dec. 31, 2014 |
Employment agreements | |||
Commitment to pay severance in event of employment termination without cause | $0.80 | $0.80 | |
Commitment to pay severance in event of employment termination upon change of control | 1 | 1 | |
Contingent liability | 0 | 0 | |
Insurance reimbursement | |||
Employment agreements | |||
Gain on insurance reimbursemnt | 0.5 | ||
Fraud related to certain credit card transactions | |||
Employment agreements | |||
Post cash reserves | 0.7 | ||
Security Deposit | 0.2 | ||
Loss Contingency Cash Reserves Required to be Posted by Merchant, Entity | 2.2 | ||
Bank Sponsorship Agreement | |||
Employment agreements | |||
Contingent liability | 0 | ||
Term of Bank Sponsorship Agreement | 5 years | ||
Bank Sponsorship Agreement | Financial Guarantee | Minimum | |||
Employment agreements | |||
Bank sponsorship agreement annual fees in year one | 0.3 | ||
Bank sponsorship agreement fees final year | 0.5 | ||
Bank sponsorship agreement fees due | 1.8 |
Related_party_transactions_Det
Related party transactions (Details) (USD $) | 3 Months Ended | 1 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 28, 2015 | |
Related party transactions | |||
Rent | $90,887 | $125,094 | |
Consulting and professional fees | $1,929 | $611 | |
BDP Realty Corporation | |||
Related party transactions | |||
Ownership interest owned by related party (as a percent) | 33.33% | ||
Rent expenses period | 2 months |
Accrued_expenses_Details
Accrued expenses (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Accrued expenses | ||
Deferred revenue | $834,483 | $800,650 |
Other | 2,663,584 | 2,117,995 |
Total accrued expenses | 3,498,067 | 2,918,645 |
Recognition period of deferred revenue | 12 months | |
Non-current portion of deferred revenue | $1,000,000 | $1,000,000 |
Maximum percentage of total current liabilities | 10.00% |
Segment_information_Details
Segment information (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
item | |||
Segment information | |||
Number of reportable segments | 2 | ||
Cost of sales included in processing and services costs | $3,237,940 | $3,714,593 | |
Long-lived assets | 8,800,000 | 9,100,000 | |
Number of geographical regions in which the entity conducts its business | 3 | ||
Net Revenue: | |||
Net revenue | 12,132,770 | 11,175,117 | |
Gross Profit: | |||
Total gross profit | 8,931,795 | 8,058,447 | |
Multi-currency processing services | |||
Segment information | |||
Cost of sales included in processing and services costs | 600,000 | 600,000 | |
Net Revenue: | |||
Net revenue | 7,681,765 | 7,438,435 | |
Gross Profit: | |||
Total gross profit | 7,068,995 | 6,840,586 | |
Payment processing services | |||
Net Revenue: | |||
Net revenue | 4,451,005 | 3,736,682 | |
Number of individual customers with revenue greater than 10% of segment revenue | 0 | ||
Gross Profit: | |||
Total gross profit | 1,862,800 | 1,217,861 | |
APAC | |||
Net Revenue: | |||
Net revenue | 4,036,276 | 3,886,007 | |
Gross Profit: | |||
Total gross profit | 4,006,712 | 3,858,140 | |
Americas | |||
Net Revenue: | |||
Net revenue | 1,493,130 | 1,210,806 | |
Gross Profit: | |||
Total gross profit | 1,396,279 | 1,178,702 | |
CEMEA | |||
Net Revenue: | |||
Net revenue | 2,152,359 | 2,341,622 | |
Gross Profit: | |||
Total gross profit | $1,666,004 | $1,803,744 |
Segment_information_Details_2
Segment information (Details 2) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Customer concentration risk | Customer C | ||
Revenue concentration | ||
Concentration risk (as a percent) | 11.00% | 13.00% |
Revenue | Geographical concentration risk | Multi-currency processing services | APAC | Customer A | ||
Revenue concentration | ||
Concentration risk (as a percent) | 60.00% | 64.00% |
Revenue | Geographical concentration risk | Multi-currency processing services | Americas | Customer D | ||
Revenue concentration | ||
Concentration risk (as a percent) | 15.00% | |
Revenue | Geographical concentration risk | Multi-currency processing services | Americas | Customer E | ||
Revenue concentration | ||
Concentration risk (as a percent) | 14.00% | 23.00% |
Revenue | Geographical concentration risk | Multi-currency processing services | Americas | Customer F | ||
Revenue concentration | ||
Concentration risk (as a percent) | 18.00% | 26.00% |
Revenue | Geographical concentration risk | Multi-currency processing services | Americas | Customer G | ||
Revenue concentration | ||
Concentration risk (as a percent) | 10.00% | 11.00% |
Revenue | Geographical concentration risk | Multi-currency processing services | Americas | Customer G | Maximum | ||
Revenue concentration | ||
Concentration risk (as a percent) | 10.00% | |
Revenue | Geographical concentration risk | Multi-currency processing services | CEMEA | Customer C | ||
Revenue concentration | ||
Concentration risk (as a percent) | 62.00% | 61.00% |
Revenue | Geographical concentration risk | Multi-currency processing services | CEMEA | Customer H | ||
Revenue concentration | ||
Concentration risk (as a percent) | 37.00% | 39.00% |
Revenue | Customer concentration risk | Customer A | ||
Revenue concentration | ||
Concentration risk (as a percent) | 20.00% | 22.00% |
Revenue | Customer concentration risk | Multi-currency processing services | Customer B | ||
Revenue concentration | ||
Concentration risk (as a percent) | 15.00% | |
Revenue | Customer concentration risk | Multi-currency processing services | Customer I | ||
Revenue concentration | ||
Concentration risk (as a percent) | 19.00% |
Restructuring_charges_Details
Restructuring charges (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash components and activity associated with the realignment of workforce and business under the restructuring program | ||
Balance at beginning of period | $195,773 | |
Charges | 600,000 | |
Cash Payments | 116,645 | |
Balance at end of period | 79,128 | |
Severance and benefits | ||
Cash components and activity associated with the realignment of workforce and business under the restructuring program | ||
Balance at beginning of period | 195,773 | |
Cash Payments | 116,645 | |
Balance at end of period | $79,128 |
Stock_Repurchase_Program_Detai
Stock Repurchase Program (Details) (USD $) | 1 Months Ended | 6 Months Ended | 0 Months Ended | 7 Months Ended |
In Millions, unless otherwise specified | Oct. 31, 2014 | Mar. 31, 2015 | Apr. 30, 2015 | Apr. 30, 2015 |
Share repurchased, authorized amount | $6 | |||
Stock Repurchased During Period, Shares | 0.5 | |||
Stock Repurchased During Period, Value | 0.8 | |||
Subsequent event | ||||
Stock Repurchased During Period, Shares | 0.8 | 1.3 | ||
Stock Repurchased During Period, Value | $1.40 | $2.20 |