Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 08, 2019 | Jun. 30, 2018 | |
Intangible and other assets | |||
Entity Registrant Name | 3PEA INTERNATIONAL, INC. | ||
Entity Central Index Key | 0001496443 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 60,314,637 | ||
Entity Common Stock, Shares Outstanding | 46,731,912 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Emerging Growth | true | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 5,615,073 | $ 2,748,313 |
Restricted Cash | 26,050,668 | 14,416,444 |
Accounts Receivable | 337,303 | 165,523 |
Prepaid Expenses and other assets | 1,175,241 | 578,340 |
Total current assets | 33,178,285 | 17,908,620 |
Fixed assets, net | 883,490 | 854,402 |
Intangible assets, net | 2,115,933 | 1,639,557 |
Total assets | 36,177,708 | 20,402,579 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,327,497 | 1,145,083 |
Customer card funding | 25,960,974 | 14,416,444 |
Total current liabilities | 27,288,471 | 15,561,527 |
Total liabilities | 27,288,471 | 15,561,527 |
Stockholders' equity | ||
Common stock; $0.001 par value; 150,000,000 shares authorized, 46,440,765 and 43,670,765 issued and outstanding at December 31, 2018 and December 31, 2017, respectively | 46,441 | 43,671 |
Additional paid-in capital | 8,620,144 | 7,155,970 |
Treasury stock at cost, 303,450 and 303,450 shares, December 31, 2018 and December 31, 2017, respectively | (150,000) | (150,000) |
Retained earnings (accumulated deficit) | 579,582 | (2,008,472) |
Total 3Pea International, Inc.'s stockholders' equity | 9,096,167 | 5,041,169 |
Non-controlling interest | (206,930) | (200,117) |
Total stockholders' equity | 8,889,237 | 4,841,052 |
Total liabilities and stockholders' equity | $ 36,177,708 | $ 20,402,579 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized | 150,000,000 | 150,000,000 |
Common stock shares issued | 46,440,765 | 43,670,765 |
Common stock shares outstanding | 46,440,765 | 43,670,765 |
Treasury stock shares | 303,450 | 303,450 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 23,423,675 | $ 15,234,091 |
Cost of revenues (excluding depreciation and amortization) | 12,026,452 | 8,534,272 |
Gross profit | 11,397,223 | 6,699,819 |
Operating expenses | ||
Depreciation and amortization | 1,089,521 | 876,191 |
Selling, general and administrative | 7,835,074 | 4,055,836 |
Total operating expenses | 8,924,595 | 4,932,027 |
Income from operations | 2,472,628 | 1,767,792 |
Other income (expense) | ||
Other | (31,125) | 16,315 |
Interest | 139,738 | 7,603 |
Total other income (expense) | 108,613 | 23,918 |
Income before noncontrolling interest | 2,581,241 | 1,791,710 |
Provision for income taxes | 0 | 6,000 |
Net income before noncontrolling interest | 2,581,241 | 1,785,710 |
Net loss attributable to the noncontrolling interest | 6,813 | 5,431 |
Net income attributable to 3Pea International, Inc. | $ 2,588,054 | $ 1,791,141 |
Net income per common share - basic | $ 0.06 | $ 0.04 |
Net income per common share - fully diluted | $ 0.05 | $ 0.04 |
Weighted average common shares outstanding - basic | 45,483,693 | 43,397,477 |
Weighted average common shares outstanding - fully diluted | 52,347,736 | 48,037,477 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Noncontrolling Interest | Total |
Beginning balance, shares at Dec. 31, 2016 | 43,185,765 | |||||
Beginning balance, value at Dec. 31, 2016 | $ 43,186 | $ 6,797,759 | $ (150,000) | $ (3,799,613) | $ (194,686) | $ 2,696,646 |
Issuance of stock for services, shares | 75,000 | |||||
Issuance of stock for services, value | $ 75 | 12,807 | 12,882 | |||
Exercise of stock warrant, shares | 200,000 | |||||
Exercise of stock warrant, value | $ 200 | 49,800 | 50,000 | |||
Issuance of stock for stock based compensation, shares | 210,000 | |||||
Issuance of stock for stock based compensation, value | $ 210 | 91,590 | 91,800 | |||
Stock based compensation | 204,014 | 204,014 | ||||
Net income (loss) | 1,791,141 | (5,431) | 1,785,710 | |||
Ending balance, shares at Dec. 31, 2017 | 43,670,765 | |||||
Ending balance, value at Dec. 31, 2017 | $ 43,671 | 7,155,970 | (150,000) | (2,008,472) | (200,117) | 4,841,052 |
Issuance of stock for services, shares | 130,000 | |||||
Issuance of stock for services, value | $ 130 | 144,010 | 144,140 | |||
Exercise of stock warrant, shares | 200,000 | |||||
Exercise of stock warrant, value | $ 200 | 99,800 | 100,000 | |||
Issuance of stock for stock based compensation, shares | 2,440,000 | |||||
Issuance of stock for stock based compensation, value | $ 2,440 | (2,440) | ||||
Stock based compensation | 1,222,804 | 1,222,804 | ||||
Net income (loss) | 2,588,054 | (6,813) | 2,581,241 | |||
Ending balance, shares at Dec. 31, 2018 | 46,440,765 | |||||
Ending balance, value at Dec. 31, 2018 | $ 46,441 | $ 8,620,144 | $ (150,000) | $ 579,582 | $ (206,930) | $ 8,889,237 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 2,588,054 | $ 1,791,141 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Change in noncontrolling interest | (6,813) | (5,431) |
Stock based compensation | 1,366,944 | 308,696 |
Depreciation and amortization | 1,089,521 | 876,191 |
Changes in operating assets and liabilities: | ||
Change in accounts receivable | (171,780) | (55,254) |
Change in prepaid expenses and other current assets | (596,901) | (302,155) |
Change in accounts payable and accrued liabilities | 182,414 | 379,487 |
Change in customer card funding | 11,544,530 | 4,413,939 |
Change in legal settlement payable | 0 | (254,900) |
Net cash provided by operating activities | 15,995,969 | 7,151,714 |
Cash flows from investing activities: | ||
Purchase of fixed assets | (257,062) | (707,224) |
Purchase of intangible assets | (1,337,923) | (812,121) |
Net cash used in investing activities | (1,594,985) | (1,519,345) |
Cash flows from financing activities: | ||
Proceeds from exercise of warrants | 100,000 | 50,000 |
Payments on notes payable | 0 | (152,060) |
Net cash provided by (used in) financing activities | 100,000 | (102,060) |
Net change in cash and restricted cash | 14,500,984 | 5,530,309 |
Cash and restricted cash, beginning of period | 17,164,757 | 11,634,448 |
Cash and restricted cash, end of period | 31,665,741 | 17,164,757 |
Non-cash financing activities | ||
Interest paid | 0 | 46,663 |
Income taxes paid | $ 7,504 | $ 16,200 |
1. DESCRIPTION OF BUSINESS, HIS
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. Description of business, HISTORY and summary of significant policies Description of business About 3PEA International, Inc. 3PEA International, Inc. is a vertically integrated provider of innovative prepaid card products and processing services for corporate, consumer and government applications. Our payment solutions are utilized by our corporate customers as a means to increase customer loyalty, increase patient adherence rate, reduce administration costs and streamline operations. Public sector organizations can utilize our payment solutions to disburse public benefits or for internal payments. The Company markets prepaid card solutions under our PaySign ® The PaySign brand offers prepaid card based solutions or “card products” for corporate incentive rewards and corporate expense, per diem and travel payments, healthcare reimbursement payments, pharmaceutical co-pay assistance, donor compensation and clinical trials. We plan plans to expand our product offering to include payroll cards, general purpose re-loadable cards, and others. Our cards are offered to end users through our relationships with bank issuers. Our proprietary PaySign ® We manage all aspects of the debit card lifecycle, from managing the card design and approval processes with partners and networks, to production, packaging, distribution, and personalization. We oversee inventory and security controls, renewals, lost and stolen card management and replacement. We deploy a fully staffed, in-house customer service department which utilizes bi-lingual customer service agents, Interactive Voice Response (IVR), and two way short message service (SMS) messaging and text alerts. Principles of consolidation Year end Use of estimates Cash and cash equivalents Cash restricted Fixed assets The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. Intangible assets Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. Customer card funding Fair value of financial instruments We determine the fair values of our financial instruments based on the fair value hierarchy established under applicable accounting guidance which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following describes the three-level hierarchy: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities. Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. We currently do not have any assets or liabilities in this category. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the overall fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments for which the determination of fair value requires significant management judgment or estimation. The fair value for such assets and liabilities is generally determined using pricing models, market comparables, discounted cash flow methodologies or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability. We currently do not have any assets or liabilities in this category. Earnings per share Income taxes We recognize and measure income tax benefits based upon a two-step model: 1) a tax position must be more likely-than-not to be sustained based solely on its technical merits in order to be recognized, and 2) the benefit is measured as the largest dollar amount of that position that is more likely-than-not to be sustained upon settlement. The difference between the benefit recognized for a position and the tax benefit claimed on a tax return is referred to as an unrecognized tax benefit. We accrue income tax related interest and penalties, if applicable, within income tax expense. We have filed consolidated tax returns whereby past subsidiary losses are used to offset tax liabilities on current profits. This approach could be challenged by the Internal Revenue Service (“IRS”) and if not accepted, may affect net income and earnings per share. Management believes that the likelihood of the IRS not accepting such filings is minimal. Revenue and expense recognition Revenue from Contracts with Customers (ASC Topic 606), The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligations. The Company generates revenue through fees generated from cardholder transactions and interchange. Revenue from cardholder transactions and interchange is recorded when the performance obligation is fulfilled. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation for refunding any fees or has any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, it has no contract assets. Stock-Based Compensation , Shares granted to employees are expensed when vested. Stock based compensation for employees is accounted for using the Stock Based Compensation Topic of the FASB ASC. We use the fair value method for equity instruments granted to employees and will use the Black Scholes model for measuring the fair value of options, if issued. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. Advertising costs Research and development costs New accounting pronouncements Revenue from Contracts with Customers (ASC Topic 606), We recognize revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligations. In February 2016, the FASB issued “Leases (Topic 842)” which increases the transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing information. This new standard is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. We will adopt this new standard on January 1, 2019, and do not anticipate any material impacts to our financial statements. In November 2016, the FASB issued Accounting Standards Update 2016-18, “Statement of Cash Flows – Restricted Cash a consensus of the FASB Emerging Issues Task Force.” This standard requires restricted cash and cash equivalents to be included with cash and cash equivalents on the statement of cash flows under a retrospective transition approach. The guidance became effective for fiscal years beginning December 15, 2017 and interim periods within those fiscal years. The Company has retrospectively adopted ASU 2016-18. In June 2018, the FASB issued ASU 2018-17, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Under the guidance, equity-classified nonemployee awards are measured on the grant date, rather than on the earlier of (1) the performance commitment date or (2) the date at which the nonemployee’s performance is complete. The guidance is effective in annual periods beginning after 15 December 2018, and interim periods within those years. We are currently evaluating the impact of adopting the new standards on our consolidated financial statements. |
2. FIXED ASSETS
2. FIXED ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | 2. FIXED ASSETS Fixed assets consist of the following: December 31, 2018 December 31, 2017 Equipment $ 1,586,954 $ 1,387,589 Software 165,274 123,913 Furniture and fixtures 140,209 126,174 Website Costs 25,467 25,467 Leasehold improvements 52,894 50,999 1,970,798 1,714,142 Less: accumulated depreciation 1,087,308 859,740 Fixed assets, net $ 883,490 $ 854,402 |
3. INTANGIBLE ASSETS
3. INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 3. INTANGIBLE ASSETS Intangible assets consist of the following: December 31, 2018 December 31, 2017 Patents and trademarks $ 36,073 $ 34,771 Platform 4,105,780 2,808,886 Kiosk Development 64,802 64,802 Licenses 433,685 393,958 4,640,340 3,302,417 Less: accumulated amortization 2,524,407 1,662,860 Intangible assets, net $ 2,115,933 $ 1,639,557 Intangible assets are amortized over their useful lives ranging from periods of 3 to 5 years. |
4. COMMON STOCK
4. COMMON STOCK | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
COMMON STOCK | 4. COMMON STOCK At December 31, 2018, the Company’s authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had outstanding 46,440,765 shares of common stock, and no shares of preferred stock outstanding. 2018 Transactions: · 200,000 shares were issued as a result of the exercise of a warrant with an exercise price of $0.50 for a total of $100,000 in cash proceeds. · 130,000 shares of common stock were issued for stock-based compensation to a consultant for services earned and unearned (see within Note 4 related to July 2018 grant of 130,000 shares to consultant for further discussion). · 2,440,000 shares of common stock were issued for vested stock grants to various employees and consultants. At December 31, 2017, the Company's authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had outstanding 43,670,765 shares of common stock, and no shares of preferred stock outstanding. 2017 Transactions: · 210,000 shares of common stock issued to employees as signing bonuses with a fair value of $91,800. · 75,000 shares of common stock issued to the Company’s Board of Advisors with a fair value of $12,882. · 200,000 shares of common stock issued as a result of the exercise of a warrant with an exercise price of $0.25 for total of $50,000 in cash proceeds. Stock, Options and Warrant Grants: In October 2018, we granted to several employees of 3PEA a total of 1,050,000 shares of common stock. These shares were valued at $3,405,000 or average price per share of $3.24. The 1,050,000 shares have an annual vesting period of five years with the first vesting period occurring on October 2019. The amount expensed related to this grant for the year ended December 31, 2018 totaled $131,648. As of December 31, 2018, none of the shares have vested and/or issued. On August 7, 2018, we granted an employee of 3PEA options to purchase 500,000 shares of common stock exercisable for five years at $3.39 per share, which vest annually over a five-year period from the date of hire. The options were valued at $1,315,011 using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $3.39 per share; exercise price of $3.39; 5 year life; discount rate of 2.95%; and volatility rate of 263%. The amount expensed of this grant for the year ended December 31, 2018 totaled $100,547. As of December 31, 2018 none of the options have vested or been exercised. On July 18, 2018, we granted stock options for various employees of 3PEA to purchase 750,000 shares of common stock exercisable for five years with an exercise price of $2.40 per share, which vest annually over a five-year period, as long as they remain employed with 3PEA, beginning July 18, 2018. The options were valued at $1,397,777 using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $2.40 per share; exercise price of $2.40; 5 year life; discount rate of 2.88%; and volatility rate of 235%. The amount expensed related to this grant for the year ended December 31, 2018 totaled $123,561. As of December 31, 2018 none of the options have vested or been exercised. In July 2018, we granted 130,000 shares to a consultant. The shares were valued at $338,000 or $2.60 per share. The 130,000 shares will be expensed over the contract period of one year. The value earned and expensed for the year ended December 31, 2018 was $144,140. As of December 31, 2018, the full 130,000 shares have been issued (see Note 4 Common Stock – 2018 Transactions) and the unearned portion totaling $193,410 has been recorded as contra equity and included in additional paid-in capital. On May 3, 2018, we appointed Dan R. Henry to our board of directors as an independent director. In connection with his appointment, we issued Mr. Henry options to purchase 1,500,000 shares common stock exercisable over five years with an exercise price of $1.34 per share, which vest over a four-year period from the date of his appointment. The options were valued at $1,574,691 using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $1.34 per share; exercise price of $1.34; 5 year life; discount rate of 2.94%; and volatility rate of 238%. The amount expensed related to this grant for the year ended December 31, 2018 totaled $262,250. As of December 31, 2018 none of the options have vested or been exercised. On May 3, 2018, we appointed Dennis Triplett to our board of directors as an independent director. In connection with his appointment, we granted Mr. Triplett 200,000 shares of restricted common stock which vest over a four-year period from the date of his appointment. The shares have a fair market value of $268,000 or $1.34 per share. The amount vested and expensed of this grant for the year ended December 31, 2018 totaled $48,415. As of December 31, 2018 none of the shares have been issued. On April 13, 2018, we appointed Quinn Williams to our board of directors as an independent director. In connection with his appointment, we granted Mr. Williams 200,000 shares of restricted common stock which vest over a four-year period from the date of his appointment. The shares have a fair market value of $320,000 or $1.60 per share. The amount vested and expensed of this grant for the year ended December 31, 2018 totaled $57,338. As of December 31, 2018 none of the shares have been issued. On March 29, 2018, we appointed Bruce A. Mina to our board of directors as an independent director. In connection with his appointment, we granted Mr. Mina 200,000 shares of restricted common stock which vest over a four-year period from the date of his appointment. The shares have a fair market value of $234,000 or $1.17 per share. The amount vested and expensed of this grant for the year ended December 31, 2018 totaled $43,875. As of December 31, 2018 none of the shares have been issued. In January 2018, the Company granted 990,000 shares of restricted common stock to certain employees of 3PEA with a fair market value of $698,000 with a range of $0.67 to $0.74 per share. The 990,000 shares have an annual vesting period of five years with the first vesting period occurring on December 31, 2018. The amount vested and expensed of this grant for the year ended December 31, 2018 totaled $133,597. As of December 31, 2018, none of the shares have been issued. In January 2018, we granted 300,000 shares of restricted common stock to a consultant of 3PEA with a fair market value of $213,000, or $0.71 per share. The 300,000 shares have an annual vesting period of three years with the first vesting period occurring on December 31, 2018. The amount vested and expensed of this grant for the year ended December 31, 2018 totaled $71,000. As of December 31, 2018, none of the shares have been issued. In July 2017, we granted 200,000 shares of restricted common stock to an officer of 3PEA with a fair market value of $84,400 or $0.42 per share. These shares have been issued. Concurrently, the Company also granted the employee four equal tranches of 200,000 restricted common shares, each valued at $84,400 which will vest in equal amounts over a four year period on the last day of each quarter, commencing December 31, 2017. The amount vested and expensed of this grant for the years ended December 31, 2018 and 2017 totaled $84,400 and $42,200, respectively. 200,000 shares subject to vesting restrictions have been issued as of December 31, 2018. In November 2016, we granted a total of 5,000,000 shares to certain officers and directors of 3PEA with a total value of $787,950 or $0.15759 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The 5,000,000 shares have a quarterly vesting period of five years with the first vesting period occurring on December 31, 2016. The value vested and expensed for the years ended December 31, 2018 and 2017 was $153,650 and $157,590 respectively. As of December 31, 2018, 2,000,000 shares have been issued. In November 2016, we granted 210,000 shares to a consultant. The shares were valued at $33,094 or $0.15759 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The 210,000 shares have a quarterly vesting period of three years with the first vesting period occurring on December 31, 2016. The value vested for the years ended December 31, 2018 and 2017 was $11,031 and $11,031, respectively. As of December 31, 2018, 140,000 shares have been issued. Stock Options A summary of stock options activity for the year ended December 31, 2018 is presented as follows: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Years) Value Outstanding at December 31, 2017 – Granted 2,750,000 $ 2.00 – $ – Exercised – – – – Forfeited/expired (42,673 ) 2.40 – – Outstanding at December 31, 2018 2,707,327 $ 2.00 4.56 $ 5,402,585 Exercisable at December 31, 2018 – $ – – $ – A summary of unvested options activity for the year ended December 31, 2018 was as follows: Weighted- Average Grant Date Shares Fair Value Unvested at December 31, 2017 – $ – Granted 2,750,000 2.00 Forfeited/expired (42,673 ) 2.40 Vested – – Unvested at December 31, 2018 2,707,327 $ 2.00 The weighted average grant date fair value of options granted and the total intrinsic value of options exercised for the year ended December 31, 2018 is as follows: 2018 Weighted average grant date fair value of options granted $ 1.56 Intrinsic value of options exercised $ – Restricted Stock A summary of restricted stock activity for the year ended December 31, 2018 and 2017 was as follows: Weighted- Average Grant Shares Date Fair Value Outstanding at December 31, 2016 4,960,000 $ 0.16 Granted 1,000,000 0.42 Vested (1,320,000 ) 0.17 Outstanding at December 31, 2017 4,640,000 0.20 Granted 3,070,000 1.78 Forfeited (275,000 ) 0.16 Vested (1,400,000 ) 0.18 Outstanding at December 31, 2018 6,035,000 $ 0.94 |
5. BASIC AND FULLY DILUTED NET
5. BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
5. BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE | 5. BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE The following table sets forth the computation of basic and fully diluted net income per common share for the years ended December 31, 2018 and 2017: 2018 2017 Numerator: Net income attributable to 3PEA International, Inc. $ 2,588,054 $ 1,791,141 Denominator: Weighted average common shares: Denominator for basic calculation 45,483,693 43,397,477 Weighted average effects of potentially diluted common stock: Stock options (calculated under treasury method) 829,043 – Unvested restricted stock grants 6,035,000 4,640,000 Denominator for fully diluted calculation 52,347,736 48,037,477 Net income per common share: Basic $ 0.06 $ 0.04 Fully diluted $ 0.05 $ 0.04 |
6. COMMITMENTS AND CONTINGENCIE
6. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Office lease Data Center Lease Pending of threatened litigation |
7. INCOME TAXES
7. INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 7. INCOME TAXES The income tax provision on the statements of income consists of $0 and $6,000 for the years ended December 31, 2018 and 2017, respectively. Income tax provision comprised of the following at December 31: 2018 2017 Current income taxes $ – $ 6,000 Deferred income tax benefit – – Income tax provision $ – $ 6,000 Deferred tax assets are comprised of the following at December 31: 2018 2017 Net operating loss carryforward $ 177,000 $ 1,928,000 Tax credits 121,000 132,000 Temporary differences (298,000 ) 52,000 Less valuation allowance – (2,112,000 ) Deferred tax asset, net $ – $ – Deferred taxes arise from temporary differences in the recognition of certain expenses for tax and financial reporting purposes. At December 31, 2018, management determined that realization of these benefits are realizable and does not believe a valuation allowance is needed. At December 31, 2018 and 2017, net operating loss carryforwards were approximately $843,000 and $4,341,000, respectively. During the year ended December 31, 2018, the Company had utilized $3,498,000 net operating loss carryforward. For December 31, 2018 and 2017, the provision for income taxes differs from the amount computed by applying the U.S. federal statutory tax rate (21% in 2018 and 34% in 2017) to income taxes as follows: 2018 2017 Tax provision computed at 21% and 34%, respectively $ 542,000 $ 609,000 Change in valuation allowance (794,000 ) 308,000 Change in carryovers and tax attributes 252,000 (911,000 ) Income tax provision $ – $ 6,000 |
8. SUBSEQUENT EVENTS
8. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 8. SUBSEQUENT EVENTS In January 2019, the Company granted a stock option for 150,000 shares of common stock to an employee exercisable for five years with an exercise price of $3.57 per share, which vest annually over a five-year period, as long as they remain employed with 3PEA, beginning January 2019. The options were valued at $408,685 using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $3.57 per share; exercise price of $3.57; 5 year life; discount rate of 2.70%; and volatility rate of 102%. In February 2019, the Company issued a total of 291,147 shares of common stock to three individuals for shares previously earned and vested. |
1. SUMMARY OF SIGNIFICANT POLIC
1. SUMMARY OF SIGNIFICANT POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Description of business | Description of business About 3PEA International, Inc. 3PEA International, Inc. is a vertically integrated provider of innovative prepaid card products and processing services for corporate, consumer and government applications. Our payment solutions are utilized by our corporate customers as a means to increase customer loyalty, increase patient adherence rate, reduce administration costs and streamline operations. Public sector organizations can utilize our payment solutions to disburse public benefits or for internal payments. The Company markets prepaid card solutions under our PaySign ® The PaySign brand offers prepaid card based solutions or “card products” for corporate incentive rewards and corporate expense, per diem and travel payments, healthcare reimbursement payments, pharmaceutical co-pay assistance, donor compensation and clinical trials. We plan plans to expand our product offering to include payroll cards, general purpose re-loadable cards, and others. Our cards are offered to end users through our relationships with bank issuers. Our proprietary PaySign ® We manage all aspects of the debit card lifecycle, from managing the card design and approval processes with partners and networks, to production, packaging, distribution, and personalization. We oversee inventory and security controls, renewals, lost and stolen card management and replacement. We deploy a fully staffed, in-house customer service department which utilizes bi-lingual customer service agents, Interactive Voice Response (IVR), and two way short message service (SMS) messaging and text alerts. |
Principles of consolidation | Principles of consolidation |
Year end | Year end |
Use of estimates | Use of estimates |
Cash and cash equivalents | Cash and cash equivalents |
Cash restricted | Cash restricted |
Fixed assets | Fixed assets The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. |
Intangible assets | Intangible assets Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. |
Customer card funding | Customer card funding |
Fair value of financial instruments | Fair value of financial instruments We determine the fair values of our financial instruments based on the fair value hierarchy established under applicable accounting guidance which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following describes the three-level hierarchy: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities. Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. We currently do not have any assets or liabilities in this category. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the overall fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments for which the determination of fair value requires significant management judgment or estimation. The fair value for such assets and liabilities is generally determined using pricing models, market comparables, discounted cash flow methodologies or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability. We currently do not have any assets or liabilities in this category. |
Earnings per share | Earnings per share |
Income taxes | Income taxes We recognize and measure income tax benefits based upon a two-step model: 1) a tax position must be more likely-than-not to be sustained based solely on its technical merits in order to be recognized, and 2) the benefit is measured as the largest dollar amount of that position that is more likely-than-not to be sustained upon settlement. The difference between the benefit recognized for a position and the tax benefit claimed on a tax return is referred to as an unrecognized tax benefit. We accrue income tax related interest and penalties, if applicable, within income tax expense. We have filed consolidated tax returns whereby past subsidiary losses are used to offset tax liabilities on current profits. This approach could be challenged by the Internal Revenue Service (“IRS”) and if not accepted, may affect net income and earnings per share. Management believes that the likelihood of the IRS not accepting such filings is minimal. |
Revenue and expense recognition | Revenue and expense recognition Revenue from Contracts with Customers (ASC Topic 606), The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligations. The Company generates revenue through fees generated from cardholder transactions and interchange. Revenue from cardholder transactions and interchange is recorded when the performance obligation is fulfilled. The Company records all revenue on a gross basis since it is the primary obligor and establishes the price in the contract arrangement with its customers. The Company is currently under no obligation for refunding any fees or has any obligations for disputed claim settlements. Given the nature of the Company’s services and contracts, it has no contract assets. |
Stock-Based Compensation | Stock-Based Compensation , Shares granted to employees are expensed when vested. Stock based compensation for employees is accounted for using the Stock Based Compensation Topic of the FASB ASC. We use the fair value method for equity instruments granted to employees and will use the Black Scholes model for measuring the fair value of options, if issued. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. |
Advertising costs | Advertising costs |
Research and development costs | Research and development costs |
New accounting pronouncements | New accounting pronouncements Revenue from Contracts with Customers (ASC Topic 606), We recognize revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customers; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligations. In February 2016, the FASB issued “Leases (Topic 842)” which increases the transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing information. This new standard is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. We will adopt this new standard on January 1, 2019, and do not anticipate any material impacts to our financial statements. In November 2016, the FASB issued Accounting Standards Update 2016-18, “Statement of Cash Flows – Restricted Cash a consensus of the FASB Emerging Issues Task Force.” This standard requires restricted cash and cash equivalents to be included with cash and cash equivalents on the statement of cash flows under a retrospective transition approach. The guidance became effective for fiscal years beginning December 15, 2017 and interim periods within those fiscal years. The Company has retrospectively adopted ASU 2016-18. In June 2018, the FASB issued ASU 2018-17, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Under the guidance, equity-classified nonemployee awards are measured on the grant date, rather than on the earlier of (1) the performance commitment date or (2) the date at which the nonemployee’s performance is complete. The guidance is effective in annual periods beginning after 15 December 2018, and interim periods within those years. We are currently evaluating the impact of adopting the new standards on our consolidated financial statements. |
2. FIXED ASSETS (Tables)
2. FIXED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Fixed assets | December 31, 2018 December 31, 2017 Equipment $ 1,586,954 $ 1,387,589 Software 165,274 123,913 Furniture and fixtures 140,209 126,174 Website Costs 25,467 25,467 Leasehold improvements 52,894 50,999 1,970,798 1,714,142 Less: accumulated depreciation 1,087,308 859,740 Fixed assets, net $ 883,490 $ 854,402 |
3. INTANGIBLE ASSETS (Tables)
3. INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | December 31, 2018 December 31, 2017 Patents and trademarks $ 36,073 $ 34,771 Platform 4,105,780 2,808,886 Kiosk Development 64,802 64,802 Licenses 433,685 393,958 4,640,340 3,302,417 Less: accumulated amortization 2,524,407 1,662,860 Intangible assets, net $ 2,115,933 $ 1,639,557 |
4. COMMON STOCK (Tables)
4. COMMON STOCK (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stock option activity | Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (Years) Value Outstanding at December 31, 2017 – Granted 2,750,000 $ 2.00 – $ – Exercised – – – – Forfeited/expired (42,673 ) 2.40 – – Outstanding at December 31, 2018 2,707,327 $ 2.00 4.56 $ 5,402,585 Exercisable at December 31, 2018 – $ – – $ – |
Summary of unvested option activity | Weighted- Average Grant Date Shares Fair Value Unvested at December 31, 2017 – $ – Granted 2,750,000 2.00 Forfeited/expired (42,673 ) 2.40 Vested – – Unvested at December 31, 2018 2,707,327 $ 2.00 |
Summary of restricted stock activity | Weighted- Average Grant Shares Date Fair Value Outstanding at December 31, 2016 4,960,000 $ 0.16 Granted 1,000,000 0.42 Vested (1,320,000 ) 0.17 Outstanding at December 31, 2017 4,640,000 0.20 Granted 3,070,000 1.78 Forfeited (275,000 ) 0.16 Vested (1,400,000 ) 0.18 Outstanding at December 31, 2018 6,035,000 $ 0.94 |
5. BASIC AND FULLY DILUTED NE_2
5. BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of basic and fully diluted net income per common share | 2018 2017 Numerator: Net income attributable to 3PEA International, Inc. $ 2,588,054 $ 1,791,141 Denominator: Weighted average common shares: Denominator for basic calculation 45,483,693 43,397,477 Weighted average effects of potentially diluted common stock: Stock options (calculated under treasury method) 829,043 – Unvested restricted stock grants 6,035,000 4,640,000 Denominator for fully diluted calculation 52,347,736 48,037,477 Net income per common share: Basic $ 0.06 $ 0.04 Fully diluted $ 0.05 $ 0.04 |
7. INCOME TAXES (Tables)
7. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | 2018 2017 Current income taxes $ – $ 6,000 Deferred income tax benefit – – Income tax provision $ – $ 6,000 |
Schedule of deferred tax assets | 2018 2017 Net operating loss carryforward $ 177,000 $ 1,928,000 Tax credits 121,000 132,000 Temporary differences (298,000 ) 52,000 Less valuation allowance – (2,112,000 ) Deferred tax asset, net $ – $ – |
Reconcilation of income taxes | 2018 2017 Tax provision computed at 21% and 34%, respectively $ 542,000 $ 609,000 Change in valuation allowance (794,000 ) 308,000 Change in carryovers and tax attributes 252,000 (911,000 ) Income tax provision $ – $ 6,000 |
1. DESCRIPTION OF BUSINESS, H_2
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
Estimated useful life of assets | 3 to 10 years |
2. FIXED ASSETS (Details)
2. FIXED ASSETS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Fixed Assets Gross | $ 1,970,798 | $ 1,714,142 |
Less: accumulated depreciation | 1,087,308 | 859,740 |
Fixed assets, net | 883,490 | 854,402 |
Equipment [Member] | ||
Fixed Assets Gross | 1,586,954 | 1,387,589 |
Software [Member] | ||
Fixed Assets Gross | 165,274 | 123,913 |
Furniture and Fixtures [Member] | ||
Fixed Assets Gross | 140,209 | 126,174 |
Website Costs [Member] | ||
Fixed Assets Gross | 25,467 | 25,467 |
Leasehold Improvements [Member] | ||
Fixed Assets Gross | $ 52,894 | $ 50,999 |
3. INTANGIBLE ASSETS (Details)
3. INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Intangible assets gross | $ 4,640,340 | $ 3,302,417 |
Less: accumulated amortization | 2,524,407 | 1,662,860 |
Intangible assets, net | 2,115,933 | 1,639,557 |
Patents and Trademarks | ||
Intangible assets gross | 36,073 | 34,771 |
Platform | ||
Intangible assets gross | 4,105,780 | 2,808,886 |
Kiosk Development | ||
Intangible assets gross | 64,802 | 64,802 |
Licenses | ||
Intangible assets gross | $ 433,685 | $ 393,958 |
3. INTANGIBLE ASSETS (Details N
3. INTANGIBLE ASSETS (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | |
Intangible assets useful lives | 3 years |
Maximum | |
Intangible assets useful lives | 5 years |
4. COMMON STOCK (Details - Opti
4. COMMON STOCK (Details - Option activity) - Options [Member] | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Number of Options | |
Total Number of Shares, Beginning Balance | 0 |
Total Number of Shares, Granted | 2,750,000 |
Total Number of Shares, Exercised | 0 |
Total Number of Shares, Forfeited/expired | (42,673) |
Total Number of Shares, Ending Balance | 2,707,327 |
Total Number of Shares, Exercisable | 0 |
Weighted-Average Exercise Price | |
Weighted-Average Exercise Price Per Share, Beginning Balance | $ / shares | |
Weighted-Average Exercise Price Per Share, Granted | $ / shares | 2 |
Weighted-Average Exercise Price Per Share, Forfeited/expired | $ / shares | 2.40 |
Weighted-Average Exercise Price Per Share, Ending Balance | $ / shares | 2 |
Weighted-Average Exercise Price Per Share, Exercisable | $ / shares | |
Weighted-Average Remaining Contractual Term | |
Weighted-Average Remaining Contractual Term, outstanding | 4 years 6 months 21 days |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value, Ending Balance | $ | $ 5,402,585 |
4. COMMON STOCK (Details - Unve
4. COMMON STOCK (Details - Unvested activity) - Options [Member] | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Number of Shares | |
Options unvested, beginning balance | shares | 0 |
Options granted | shares | 2,750,000 |
Options forfeited/expired | shares | (42,673) |
Options unvested, ending balance | shares | 2,707,327 |
Weighted-Average GrantDate Fair Value | |
Options unvested, beginning balance | $ / shares | |
Options granted | $ / shares | 2 |
Options forfeited/expired | $ / shares | 2.40 |
Options unvested, ending balance | $ / shares | $ 2 |
4. COMMON STOCK (Details - Rest
4. COMMON STOCK (Details - Restricted Stock Activity) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | ||
Restricted stock, beginning balance | 4,640,000 | 4,960,000 |
Restricted stock granted | 3,070,000 | 1,000,000 |
Restricted stock forfeited | (275,000) | |
Restricted stock vested | (1,400,000) | (1,320,000) |
Restricted stock, ending balance | 6,035,000 | 4,640,000 |
Weighted-Average Grant Date Fair Value | ||
Restricted stock beginning grant date price per share | $ 0.20 | $ 0.16 |
Restricted stock granted, price per share | 1.78 | 0.42 |
Restricted stock vested, price per share | 0.16 | 0.17 |
Restricted stock forfeited, price per share | 0.18 | |
Restricted stock ending price per share | $ 0.94 | $ 0.20 |
4. COMMON STOCK (Details Narrat
4. COMMON STOCK (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock issued for compensation, value | $ 91,800 | |
Stock issued for services, value | $ 144,140 | 12,882 |
Exercise of stock warrant, value | 100,000 | 50,000 |
Proceeds from warrant exercises | 100,000 | 50,000 |
Share based compensation | $ 1,366,944 | $ 308,696 |
Options [Member] | ||
Options granted in period | 2,750,000 | |
Option exercise price | $ 2 | |
Options exercised | 0 | |
Weighted average grant date fair value of options granted | $ 1.56 | |
Intrinisc value of options exercised | $ 0 | |
Restricted Stock [Member] | ||
Shares vested | 1,400,000 | 1,320,000 |
Stock granted for services, shares | 3,070,000 | 1,000,000 |
Consultant [Member] | July 2018 [Member] | Common Stock [Member] | ||
Share based compensation | $ 144,140 | |
Shares issued | 130,000 | |
Additional paid in capital, shares granted | $ 193,410 | |
Stock granted for services, shares | 130,000 | |
Stock granted for services, value | $ 338,000 | |
Several Employees [Member] | October 2018 [Member] | Common Stock [Member] | ||
Vesting period | 5 years | |
Share based compensation | $ 131,648 | |
Shares vested | 0 | |
Shares issued | 0 | |
Stock granted for services, shares | 1,050,000 | |
Stock granted for services, value | $ 3,405,000 | |
An Employee [Member] | August 7, 2018 [Member] | Options [Member] | ||
Vesting period | 5 years | |
Share based compensation | $ 100,547 | |
Options granted in period | 500,000 | |
Option exercise price | $ 3.39 | |
Fair value of options granted | $ 1,315,011 | |
Options vested | 0 | |
Options exercised | 0 | |
Various Employees [Member] | July 18, 2018 [Member] | Options [Member] | ||
Vesting period | 5 years | |
Share based compensation | $ 123,561 | |
Options granted in period | 750,000 | |
Option exercise price | $ 2.40 | |
Fair value of options granted | $ 1,397,777 | |
Options vested | 0 | |
Options exercised | 0 | |
Dan Henry [Member] | May 3, 2018 [Member] | Options [Member] | ||
Vesting period | 4 years | |
Share based compensation | $ 262,250 | |
Options granted in period | 1,500,000 | |
Option exercise price | $ 1.34 | |
Fair value of options granted | $ 1,574,691 | |
Options vested | 0 | |
Options exercised | 0 | |
Dennis Triplett [Member] | May 3, 2018 [Member] | Restricted Stock [Member] | ||
Vesting period | 4 years | |
Share based compensation | $ 48,415 | |
Shares issued | 0 | |
Stock granted for services, shares | 200,000 | |
Stock granted for services, value | $ 268,000 | |
Quinn Williams [Member] | April 13, 2018 [Member] | Restricted Stock [Member] | ||
Vesting period | 4 years | |
Share based compensation | $ 57,338 | |
Shares issued | 0 | |
Stock granted for services, shares | 200,000 | |
Stock granted for services, value | $ 320,000 | |
Bruce Mina [Member] | March 29, 2018 [Member] | Restricted Stock [Member] | ||
Vesting period | 4 years | |
Share based compensation | $ 43,875 | |
Shares issued | 0 | |
Stock granted for services, shares | 200,000 | |
Stock granted for services, value | $ 234,000 | |
Certain Employees [Member] | January 2018 [Member] | Restricted Stock [Member] | ||
Vesting period | 5 years | |
Share based compensation | $ 133,597 | |
Shares issued | 0 | |
Stock granted for services, shares | 990,000 | |
Stock granted for services, value | $ 698,000 | |
A Consultant [Member] | January 2018 [Member] | Restricted Stock [Member] | ||
Vesting period | 3 years | |
Share based compensation | $ 71,000 | |
Shares issued | 0 | |
Stock granted for services, shares | 300,000 | |
Stock granted for services, value | $ 213,000 | |
An Officer [Member] | July 2017 [Member] | Restricted Stock [Member] | ||
Share based compensation | $ 84,400 | $ 42,200 |
Shares issued | 200,000 | 200,000 |
Stock granted for services, shares | 200,000 | |
Stock granted for services, value | $ 84,400 | |
An Officer [Member] | July 2017 [Member] | Restricted Stock [Member] | Additional Grant [Member] | ||
Shares issued | 200,000 | |
Stock granted for services, shares | 800,000 | |
Stock granted for services, value | $ 337,600 | |
Common Stock [Member] | Consultant [Member] | ||
Stock issued for services, shares | 130,000 | |
Common Stock [Member] | Employees and Consultants [Member] | ||
Stock issued for compensation, shares | 2,440,000 | |
Common Stock [Member] | Employees [Member] | ||
Stock issued for compensation, shares | 210,000 | |
Stock issued for compensation, value | $ 91,800 | |
Common Stock [Member] | Board of Advisors [Member] | ||
Stock issued for services, shares | 75,000 | |
Stock issued for services, value | $ 12,882 | |
Common Stock [Member] | Warrants Exercised [Member] | ||
Exercise of stock warrant, shares | 200,000 | 200,000 |
Proceeds from warrant exercises | $ 100,000 | $ 50,000 |
5. BASIC AND FULLY DILUTED NE_3
5. BASIC AND FULLY DILUTED NET INCOME PER COMMON SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | ||
Net income attributable to 3PEA International, Inc. | $ 2,588,054 | $ 1,791,141 |
Denominator: Weighted average common shares: | ||
Denominator for basic calculation | 45,483,693 | 43,397,477 |
Weighted average effects of potentially diluted common stock: | ||
Stock options (calculated under treasury method) | 829,043 | 0 |
Unvested restricted stock grants | 6,035,000 | 4,640,000 |
Denominator for fully diluted calculation | 52,347,736 | 48,037,477 |
Net income per common share: Basic | $ 0.06 | $ 0.04 |
Net income per common share: Fully diluted | $ 0.05 | $ 0.04 |
6. COMMITMENTS AND CONTINGENC_2
6. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Lease payments | $ 215,874 | $ 208,975 |
Office Lease [Member] | ||
Monthly lease payments | 18,200 | |
Data Center Lease [Member] | ||
Monthly lease payments | $ 5,533 |
7. INCOME TAXES (Details - Curr
7. INCOME TAXES (Details - Current and Deferred) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Current income taxes | $ 0 | $ 6,000 |
Deferred income tax benefit | 0 | 0 |
Income tax provision | $ 0 | $ 6,000 |
7. INCOME TAXES (Details - Defe
7. INCOME TAXES (Details - Deferred taxes) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 177,000 | $ 1,928,000 |
Tax credits | 121,000 | 132,000 |
Temporary differences | (298,000) | 52,000 |
Less valuation allowance | 0 | (2,112,000) |
Deferred tax asset, net | $ 0 | $ 0 |
7. INCOME TAXES (Details - Tax
7. INCOME TAXES (Details - Tax provision) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit computed at 21% and 34%, respectively | $ 542,000 | $ 609,000 |
Change in valuation allowance | (794,000) | 308,000 |
Change in carryovers and tax attributes | 252,000 | (911,000) |
Income tax provision | $ 0 | $ 6,000 |
7. INCOME TAXES (Details Narrat
7. INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 843,000 | $ 4,341,000 |
NOL utilized | $ 3,498,000 |